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Ferrum Crescent Limited (Previously Washington Resources Limited)

(Incorporated and registered in Australia and registered as an external company in the Republic of South Africa)

(Registration number A.C.N. 097 532 137)(External company registration number 2011/116305/10)

Share code on the ASX: FCR Share code on AIM: FCRShare code on the JSE: FCR ISIN: AU000000WRL8

(“Ferrum Crescent” or “the company”)

PRE-LISTING STATEMENTThe defi nitions commencing on page 13 of this pre-listing statement apply mutatis mutandis to the information presented below.

Ferrum Crescent currently has a primary listing of its ordinary shares on the ASX and a secondary listing on AIM. At the last practicable date Ferrum Crescent had a market capitalisation of A$29.2 million, based on the ASX closing price of A$0.10 per Ferrum Crescent share. This translates to a market capitalisation of R238.9 million using the closing exchange rate as at the last practicable date.

This pre-listing statement is not an invitation to the general public to subscribe for shares in Ferrum Crescent but is issued in compliance with the Listings Requirements for the purposes of providing information to the public with regard to Ferrum Crescent.

Ferrum Crescent shares will only be traded on the JSE as dematerialised shares and, accordingly, all shareholders who elect to receive certifi cated shares will have to dematerialise their certifi cated shares should they wish to trade on the JSE.

The JSE has granted the company a listing of 298 691 705 shares, which shares rank pari passu with all shares issued on the ASX and AIM, representing the entire issued ordinary share capital of Ferrum Crescent, in the “Basic Materials – Basic Metals – Industrial Metals & Iron – Iron & Steel” sector under the abbreviated name “Ferrum”, share code “FCR” and ISIN: AU000000WRL8, with effect from the commencement of trading on the JSE on Friday, 11 November 2011.

At the date of listing, the authorised share capital of Ferrum Crescent will comprise of an unlimited number of ordinary shares with no par value, of which 298 691 705 shares have been issued, resulting in Ferrum Crescent having contributed equity capital of A$27 392 728. Ferrum Crescent does not have any shares held in treasury.

The directors of Ferrum Crescent, whose names are given in paragraph 10 of this pre-listing statement, collectively and individually, accept full responsibility for the accuracy of the information contained in this pre-listing statement 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 pre-listing statement contains all information required by law and the Listings Requirements, as are pertinent to a company seeking a secondary listing of its shares on the JSE.

The reporting accountants and qualifi ed persons, whose reports are contained in this pre-listing statement, have given and have not, prior to publication, withdrawn their written consents to the inclusion of their reports in the form and context in which they appear. Each of the corporate adviser and sponsor, attorneys, reporting accountants and qualifi ed persons named in this pre-listing statement has consented in writing to act in those capacities as stated in this pre-listing statement and has not withdrawn its consent prior to the publication of this pre-listing statement.

An abridged version of this pre-listing statement will be released on SENS on Friday, 4 November 2011 and published in the press on Monday, 7 November 2011.

This pre-listing statement is only available in English and copies thereof may be obtained during normal business hours from Friday, 4 November 2011 until Friday, 18 November 2011 from the registered offi ce of Ferrum Crescent in South Africa and the offi ces of Sasfi n, the addresses of which are set out in the “Corporate Information” section on pages 3 and 4 of this pre-listing statement.

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Date of issue: Friday, 4 November 2011

Corporate adviser and sponsor Attorneys Australian auditors

Competent persons Competent persons

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IN AUSTRALIA:

Australian registered offi ceCorporate secretary and registered offi ceAndrew NealonFerrum Crescent Limited(Registration number A.C.N. 097 532 137)Unit 2, Level 1Churchill Court331 – 335 Hay StreetSubiaco, WA 6008(PO Box 524, Wembley, WA, 6913)

Auditors

Ernst & Young IncorporatedErnst & Young Building11 Mounts Bay RoadPerth WA 6000Australia

Attorneys to the company as to Australian law

Clifford ChanceLevel 12London House216 St Georges TerracePerth WA 6000Australia

Bankers

National Austrialia Bank100 St Georges TerracePerth WA 6000

Registrar in Australia

Computershare Investor Services Proprietary LimitedLevel 245 St Georges TerracePerth WA 6000Australia

CORPORATE INFORMATION

IN SOUTH AFRICA:

South African registered offi ceFerrum Crescent Limited(Registration number 2011/116305/10)Palazzo Towers WestMontecasino BlvdFourways, 2055(PO Box 877, Lonehill, 2062)

Corporate adviser and sponsor

Sasfi n CapitalA division of Sasfi n Bank Limited(Registration number 1951/002280/06)29 Scott Street,Waverley, 2090(PO Box 9510, Grant Park, 2051)

Attorneys to the company as to South African law

Falcon & Hume Attorneys Inc.Block B, 7 Eton RoadSandhurst, 2196(PO Box 650711, Benmore, 2010)

Bankers

The Standard Bank of South Africa Limited(Registration number 1969/017128/06)Fourways Crossing Shopping Centre1 Twilight AvenueLonehill Ext 56, 2191(Private Bag X103, Bryanston

Auditors

Ernst & Young IncorporatedWanderers Offi ce Park52 Corlett DriveIllovoNorthlands, 2116(Private Bag x14, Northlands, 2116)

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Transfer secretaries in South Africa

Computershare Investor Services Proprietary Limited(Registration number 2004/003647/07)Ground Floor70 Marshall StreetJohannesburg, 2001(PO Box 61051, Marshalltown, 2107)

Date of incorporation

18 July 2001

Date of registration as an external company in South Africa

15 September 2011

Competent persons

ProMet Engineers Pty Limited267 St Georges TerracePerth WA 6000AustraliaContinental Resource Management Pty Limited10 Hehir StreetBelmont WA 6104Australia

Place of incorporation

Australia

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TABLE OF CONTENTS

Page

Corporate information 3

Currency presentation and exchange rate information 7

Salient features 8

Defi nitions 1 3

Pre-listing statement

Part A: The business of Ferrum Crescent 1 8

Introduction 1 8

Purpose of the listing 1 8

History and group structure 1 9

Nature of business 20

Overview and prospects of the iron ore market 2 5

Prospects 2 7

BEE participation 2 7

South African operating environment 2 9

Part B: Risk factors 31

Risk factors 31

Part C: Directors and senior management 3 7

Directors and management 3 7

Directors’ declarations 40

Directors’ service contracts, remuneration and restraints of trade 41

Incentive schemes and options 41

Qualifi cation, remuneration, borrowing powers and appointments of directors 41

Interests of directors 4 4

Management of the business of the Ferrum Crescent group 4 4

Corporate Governance 4 4

Part D: Financial information 4 6

Extracts of consolidated historical fi nancial information of Ferrum Crescent 4 6

Material capital commitments, lease payments and contingent liabilities 4 6

Loan capital and material loans 4 6

Dividends and dividend policy 4 7

Material changes 4 7

Adequacy of working capital 4 7

Part E: Share capital 4 8

Authorised and issued share capital 4 8

Options 4 8

Share options 4 8

Alterations to share capital 4 9

Previous offers 4 9

Rights attaching to shares 4 9

Listing on other stock exchanges 50

Major shareholders 50

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Page

Part F: Particulars of the listing 51

Exchange Control Regulations 51

Strate 51

Listing on the JSE 5 2

Part G: General information 5 3

Subsidiary companies 5 3

Principal property owned or leased 5 3

Acquisitions and disposals of companies, businesses and properties 5 3

Interests of advisers and promoters 5 3

Government protection 5 3

Royalties 5 3

Material contracts 5 3

Litigation statement 5 3

Expenses 5 4

Experts’ consents 5 4

Commissions paid or payable in respect of underwriting 5 4

Directors’ responsibility statement 5 4

Documents available for inspection 5 4

Annexure 1 Competent persons’ report 5 6

Annexure 2 Prospecting right 1 40

Annexure 3 Extracts from the constitution and Memoranda of Incorporation of Ferrum Crescent and its subsidiaries 1 41

Annexure 4 Corporate Governance 1 51

Annexure 5 Extracts of consolidated historical fi nancial information of Ferrum Crescent and additional information required by the JSE 15 3

Annexure 6 Alterations to share capital 19 4

Annexure 7 Subsidiary companies 19 5

Annexure 8 Acquisitions of companies, businesses and properties 19 6

Annexure 9 Material contracts 19 8

Annexure 10 Guarantees granted by Ferrum Crescent and its subsidiaries 19 9

Annexure 11 Directorships in other companies in the past fi ve years 200

Annexure 12 Directors’ service contracts 202

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CURRENCY PRESENTATION AND EXCHANGE RATE INFORMATION

Ferrum Crescent reports in Australian dollars. Accordingly, unless otherwise indicated, all references to “A$” in this pre-listing statement refer to Australian dollars and “R” or “ZAR” refers to South African Rand.

The high, low and closing exchange rates for South African Rands in terms of Australian dollars for the last  practicable date and the 12 months ended 30 June 2011 were as follows:

South African Rand per Australian dollar High Low Closing

Last practicable date 8.24 8.10 8.1812 months ended 30 June 2011 7.42 6.34 7.25

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SALIENT FEATURES

The information set out in this section contains only the important features of this pre-listing statement, which  should be read in its entirety for a full appreciation hereof. The defi nitions commencing on page 1 3 of  this pre-listing statement apply mutatis mutandis to the salient features presented below:

1. INTRODUCTION TO THE FERRUM CRESCENT GROUP

The company was incorporated in Australia in 2001 as Witkop Mining Limited. It subsequently changed its name to Washington Resources Limited and in November 2005 became an ASX listed minerals exploration and development company. In December 2009 the company acquired Ferrum Metals (formerly Ferrum Crescent Limited) by way of a reverse takeover and changed its name to Ferrum Crescent Limited. On  15 December 2010 the ordinary shares of Ferrum Crescent were admitted to trading on AIM.

Through Ferrum Metals, the group has a controlling interest in TMT, a South African company, which holds the prospecting rights over two separate areas of iron ore mineralisation in South Africa; being the Moonlight deposit (the Moonlight Iron Ore Project) and the De Loskop prospect in the Limpopo Province of South Africa. Since April 2008, the group has been developing and defi ning the resource potential of  the Moonlight Iron Ore Project.

The group owns an effective 81.4 % of the Moonlight Iron Ore Project, through its direct 74% interest in TMT and its 28.46% interest in Mkhombi. Mkhombi, which is the group’s BEE partner, acquired 26% of TMT with effect from 23 December 2011. Mr Kofi Morna, who is a director of Mkhombi is also a director of Ferrum Crescent. Mkhombi is owned 60% by AmaMato, 2 8.46% by Nelesco and 11.54% by a trust representing local Limpopo communities impacted by the Moonlight Iron Ore Project.

As part of the BEE acquisition it is envisaged that the BEE participation in the group will be restructured. This BEE restructuring involves putting in place a BEE share exchange or “fl ip” mechanism whereby AmaMato will be able, in the future, to exchange its participation at the project level for new ordinary shares in the company. The BEE share exchange is more fully described in paragraph 7 of the pre-listing statement.

Prior to the acquisition of Ferrum Metals in December 2009, the company’s focus was on its interests in several mineral exploration tenements in Western Australia and the Northern Territory of Australia. The company entered into an agreement on 15 November 2010 pursuant to which it disposed of its Australian interests and the group’s focus is now on developing its iron ore interests in southern Africa.

At the last practicable date Ferrum Crescent had a market capitalisation of A$29.2 million. This translates to a market capitalisation of about R238.9 million based on the prevailing exchange rate on such date.

Ferrum Crescent is registered as an external company in South Africa. The JSE has approved the application for a listing of all the issued ordinary shares of the company in the “Basic Materials – Basic Metals – Industrial Metals & Iron – Iron & Steel” sector of the JSE under the abbreviated name “Ferrum”, with effect from the commencement of trade on the JSE on Friday, 11 November 2011.

The purpose of this pre-listing statement is to provide information relating to Ferrum Crescent, its projects, directors and management.

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2. OVERVIEW OF THE FERRUM CRESCENT GROUP

The company is a minerals exploration and development company and is constituted as set out below:

Through Ferrum Metals, the group has a controlling interest in TMT, which holds the prospecting rights over two separate areas of iron ore mineralisation in South Africa, namely the Moonlight deposit (the Moonlight Iron Ore Project) and the De Loskop prospect, in the Limpopo Province of South Africa. Since April 2008, the group has been developing and defi ning the resource potential of the Moonlight Iron Ore Project.

The company’s focus is on the Moonlight Iron Ore Project which is based upon the development of the Moonlight deposit. The Moonlight deposit is located 360km north of Johannesburg, 150km northwest of Polokwane. The area covered by the Moonlight mining right application is approximately 53km2 across the following three farms:

• Moonlight;

• Gouda Fontein 76LR, portions 2 and 3; and

• Julietta 112LR.

The De Loskop prospect is located approximately 50km north of Polokwane and the relevant prospecting right has a combined area of approximately 120km2 across the following farms:

• The farms Lekkerlach 206LS, Zandput 202LS, Van Wyks Put 201LS, Westheim 191LS and Trieste 192 LS;

• remaining extent and portion 1 of the farm Soho 204LS;

• remaining extent of the farm and remaining extent of portions 1, 2 and 3, portions 4 to 8 of Meanderthal 188LS; and

• remaining extent and portions 1 and 2 of Persie 200LS.

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An application for a mining right pertaining to iron and manganese ore, nickel, marble and limestone, over the Moonlight Iron Ore Project, has been submitted, and the application formally accepted by the DMR on 25 June 2010. The DMR has indicated that it expects to process the mining right application by the end of December 2011 for an initial period of 30 years.

Further information on the project, region and location is set out in section 2 of the CPR contained in  Annexure I to this document.

Since April 2008, the group has been developing and defi ning the resource potential of the Moonlight Iron Ore Project. The Moonlight deposit currently has a JORC compliant resource of 74Mt @ 33% Fe in the Indicated Resource category and 225Mt @ 29% Fe in the Inferred Resource category at a grade of 30% Fe, and the De Loskop prospect has a target* magnetite mineralisation of 200Mt to 1 000Mt which is non-JORC compliant at a grade of 30% to 40% Fe (Source: sections 4 and 5 of the CPR contained in  Annexure I to this document).

* The term “target” should not be misunderstood or misconstrued as an estimate of Mineral Resources and Reserves as defi ned by the JORC Code (2004), and therefore the terms have not been used in  this  context. It is uncertain if further exploration or feasibility study will result in the determination of  a  Mineral Resource or Ore Reserve.

3. KEY STRENGTHS

The company believes that its key strengths detailed below form a strong basis for the company to  achieve  its targets as well as enhance its market position:

3.1 Magnetite resource with large upside potential

More detailed drilling at the Moonlight deposit and exploration work at the De Loskop prospect is expected to increase the group’s iron ore resource. As referred to in section 5.3 of the CPR in Annexure I to this document, CRM believes that the De Loskop prospect represents an exploration target* for potential iron mineralisation, with potential mineralisation within the target area of 200 Mt to 1,000 Mt at a grade of between 30% Fe and 40% Fe.

* The term “target” should not be misunderstood or misconstrued as an estimate of Mineral Resources and Reserves as defi ned by the JORC Code (2004), and therefore the terms have not been used in this context. It is uncertain if further exploration or feasibility study will result in the determination of a Mineral Resource or Mining Reserve.

3.2 Oxidised Zone at surface with a low strip ratio

The oxide mineralisation, which is close to the surface, represents a potentially low stripping ratio target with consequential mining cost benefi ts. A mine pit optimisation based on utilising the Oxidised Zone indicated an average strip ratio of 1:1 and a mining rate of 4.3 Mt/pa for 24 years of  mine production and also uses the entire Oxidised Zone’s Inferred and Indicated Resource.

3.3 Favourable metallurgical characteristics

Based upon the analyses of magnetic concentrates of mineralisation recovered from the Moonlight Iron Ore Project by ISCOR and summarised in Table 3.2 of the CPR in Annexure I to this document, the directors believe the Moonlight Iron Ore Project to be capable of producing magnetite with a  high Fe content, low phosphorous content and low residuals.

3.4 Ability to yield a premium quality concentrate

As indicated in the CPR in Annexure 1 to this document, further test work will need to be undertaken to optimise the benefi ciation process and to enable the company to understand the variability of the ore within the deposit.

3.5 Support of stakeholders

The company enjoys good working relationships with the South African Government, landholders on the farms the subject of the Moonlight mining right application, BEE partners and neighbouring communities. These relationships have been developed as a result of the company’s fi rm commitment to excellence in its social and environmental performance. This support lays solid foundations for the group to grow in South Africa. The community that is impacted most by proposed mining activities at Moonlight has an ownership stake in the project through its shareholding in Mkhombi.

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3.6 Strong management

The board and the company’s management team have, in aggregate, more than 280 years of mining and/or iron-making experience, having managed and operated development stage and production stage mining and processing operations, with in-depth knowledge of South Africa and the iron ore market.

4. BUSINESS STRATEGY AND PROSPECTS

The company believes the best possible route for the commercialisation and development of the Moonlight Iron Ore Project and the Moonlight deposit is the production of direct reduction grade iron pellets for possible export and domestic use.

The company intends to develop its evaluation of the Moonlight Iron Ore Project, in order to advance towards commercial production and has raised funding for a defi nitive feasibility study advised by AMEC Minproc SA.

The programme to date and as planned for the future, which is to be fi nanced and implemented in  discrete  stages extending into 2012, includes the following:

• work aimed at increasing the confi dence and size of the current JORC compliant resource estimate;

• carrying out studies to determine the fi nal product form and/or secondary benefi ciation process;

• conducting more metallurgical test work;

• carrying out a social and labour plan;

• carrying out environmental studies in respect of the Moonlight Iron Ore Project and its activities;

• endeavouring to establish alliances to secure technology supply agreements;

• fi nalising processing plant design and location, including plans for a slurry pipeline;

• identifying and preparing for all necessary permitting for the Moonlight Iron Ore Project; and

• identifying sources of fi nance for the Moonlight Iron Ore Project.

In June 2011, the company announced that it has entered into an off-take agreement with Swiss-based Duferco, a leading private company in the trading, mining, and end use of iron and steel products and raw materials for the steel industry. Following due diligence on the mineral assets of Ferrum Crescent, Duferco concluded that the company should be able to produce direct reduction and/or blast furnace pellets equal to or better than current world best product. The off-take agreement with Duferco covers up to 6 Mt of anticipated iron ore pellet production from the Moonlight Iron Ore Project. Under the agreement, Ferrrum Crescent will sell to Duferco all of its production available for export (in total 4.5 Mt) and will give Duferco a fi rst right of refusal over an additional 1.5 Mt per year to the extent that the product is not sold domestically.

5. FINANCIAL INFORMATION

Extracts of the consolidated historical fi nancial information of Ferrum Crescent for the 2 years ended 30 June 2010 and 2011 are attached as Annexure 5 to this pre-listing statement.

6. PURPOSES OF THE LISTING

Ferrum Crescent is seeking to obtain a secondary listing of its shares on the JSE.

The purpose of the listing is to, inter alia:

• facilitate the BEE share exchange and the investment by the company’s BEE shareholders at a listed company level;

• provide Ferrum Crescent with an additional source from which permanent capital can be obtained, if  required, to fund the group’s expansion programme and working capital requirements and to facilitate future growth;

• enhance South African investor and general public awareness of the Ferrum Crescent group and its activities, thereby enlarging Ferrum Crescent’s investor base and increasing trade in its shares;

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• have the fl exibility of JSE-listed shares in order to allow Ferrum Crescent to take advantage of potential South African and African acquisition opportunities; and

• facilitate direct investment by South African residents in Ferrum Crescent.

7. ADDITIONAL COPIES OF THIS PRE-LISTING STATEMENT

Additional copies of this pre-listing statement may be obtained during normal business hours from Friday,   4 November 2011 until Friday, 1 8 November 2011 from:

• Ferrum Crescent’s registered offi ce in South Africa, Palazzo Towers West, Montecasino Boulevard, Fourways; and

• Sasfi n’s offi ce, 29 Scott Street, Waverley.

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DEFINITIONS

In this pre-listing statement and in the annexures hereto, unless otherwise stated or the context clearly indicates otherwise, the words in the fi rst column have the meanings stated opposite them in the second column, words in the singular include the plural and vice versa, words importing one gender include the other genders and references to a person include references to an entity and vice versa, and technical and mining terms shall have the meanings assigned to them in the CPR incorporated herein by reference:

“AmaMato” Mkhombi Amamato Proprietary Limited (registration number 2010/016114/07), a private company registered and duly incorporated in accordance with the laws of South Africa. Amamato is owned by the Janelle Trust (49%), the Amalungelo Trust (35%) and Matomela Mining Services Proprietary Limited (16%);

“AIM” the market known as AIM and operated by the London Stock Exchange plc;

“ArcelorMittal” ArcelorMittal South Africa Limited (registration number 1989/002164/06), a public company registered and duly incorporated in accordance with the laws of South Africa;

“ASX” Australian Stock Exchange Limited, the Australian Securities Exchange, a member of the World Federation of Exchanges;

“AUD” or “A$” Australian dollars, the lawful currency of Australia;

“Batavia” Batavia Limited (registration number 079179 CI/GBL), a public company registered and duly incorporated in accordance with the laws of the Republic of Mauritius, and a wholly-owned subsidiary of  Ferrum Metals;

“BBBEE Act” Broad-based Black Economic Empowerment Act, 53 of 2003, as  amended;

“BEE” broad-based black economic empowerment, as defi ned in the BBBEE Act;

“BEE acquisition” the acquisition by Mkhombi of a 26% interest in TMT from the company’s former BEE partner, Matodzi Nesongozwi, in December 2010 as set out in further detail in paragraph 7 of the pre-listing statement;

“BEE share exchange” the exchange by AmaMato of its 60% interest in Mkhombi for a   15.6% interest in Ferrum Crescent, as set out in further detail in   paragraph  7   of the pre-listing statement, subject to approval of  the  BEE share exchange by Ferrum Crescent shareholders;

“board” or “directors” the board of directors of Ferrum Crescent;

“business day” any day other than a Saturday, Sunday or offi cial public holiday in  South  Africa;

“CAGR” compound annual growth rate;

“the common monetary area” collectively, South Africa, the Republic of Namibia and the Kingdoms of Swaziland and Lesotho;

“the Companies Act” the South African Companies Act, 71 of 2008;

“competent persons” Promet and CRM;

“Computershare” Computershare Investor Services Proprietary Limited (registration number 2004/003647/07), a private company registered and duly incorporated in accordance with the laws of South Africa;

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“the Corporations Act” the Corporations Act 2001 (Commonwealth of Australia), including any amendment or re-enactment of it or any legislation passed in  substitution for it;

“CPR” or the competent persons’ report prepared by the competent persons“competent persons’ report” entitled “Ferrum Crescent Limited – Turquoise Moon Iron Project”,

dated November 2010, which is set out as Annexure 1 to this pre-listing statement;

“CRM” Continental Resource Management Pty Ltd, (registration number A.C.N. 009 366 929), a proprietary company registered and duly incorporated in accordance with the laws of Australia and a co-author of the CPR;

“CSDP” Central Securities Depository Participant;

“De Loskop prospect” or an area of iron ore mineralisation in the Limpopo Province of South“De Loskop” Africa over which Ferrum Crescent holds a new order prospecting

right, which expires in March 2012, and which has a target* for magnetite mineralisation of 200Mt to 1 000Mt (non-JORC compliant).

* The term “target” should not be misunderstood or misconstrued as an estimate of Mineral Resources and Reserves as defi ned by the JORC Code (2004), and therefore the terms have not been used in this context. It is uncertain if further exploration or feasibility study will result in the determination of a Mineral Resource or Ore Reserve;

“dematerialise” the process by which physical share certifi cates are replaced with electronic records of ownership under Strate;

“dematerialised shares” Ferrum Crescent shares in respect of which physical share certifi cates have been dematerialised;

“DFS” defi nitive feasibility study, the equivalent of a bankable feasibility study;

“the DMR” the Department of Mineral Resources, a department of the South African Government;

“DRI” direct reduction iron;

“Duferco” Duferco SA (Serial No. CH-514.3.002.576-4), a private company registered and duly incorporated in accordance with the laws of Switzerland;

“EBIT” earnings before interest and taxation;

“EMP” environmental management programme;

“Exchange Control” the Exchange Control Department of the SARB;

“Exchange Control Regulations” Exchange Control Regulations, 1961, as amended, promulgated in  terms of section 9 of the Currency and Exchanges Act, 9 of 1933, as amended;

“Fe” Iron;

“Ferrum Crescent” or “the company” Ferrum Crescent Limited (incorporated as Witkop Mining Limited and previously known as Washington Resources Limited) (registration number A.C.N. 097 532 137), a public company registered and duly incorporated in accordance with the laws of Australia, primary listed on the ASX, secondary listed on AIM and to be secondary listed on the JSE;

“Ferrum Crescent group” or Ferrum Crescent and its subsidiaries, being Ferrum Metals, Batavia, “group” Nelesco and TMT;

“Ferrum Crescent shares”, ordinary issued shares in the share capital of Ferrum Crescent;“ordinary shares” or “shares”

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“Ferrum Crescent shareholders” or registered holders of Ferrum Crescent shares;“shareholders”

“Ferrum Metals” Ferrum Metals Pty Ltd (registration number A.C.N. 128 777 444), a  proprietary company registered and duly incorporated in accordance with the laws of Australia, and a wholly-owned subsidiary of Ferrum Crescent;

“Ferrum subscription agreement” the agreement, dated 4 November 2010, in terms of which AmaMato may subscribe for shares in Ferrum Crescent such that it holds 15.6% of the share capital of the company;

“GBP” pound Sterling, the lawful currency of the United Kingdom;

“HDSA” historically disadvantaged South Africans, specifi cally any person, category of persons or community, disadvantaged by unfair discrimination before the Constitution of the Republic of South Africa, Act 200 of 1993, as amended, came into operation;

“HDSA company” a company that is owned or controlled by HDSAs;

“IFRS” International Financial Reporting Standards;

“Indicated Resource” that part of a mineral resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confi dence;

“Inferred Resource” that part of a mineral resource for which tonnage, grade and mineral content can be estimated with a low level of confi dence;

“ISCOR” South African Iron and Steel Industrial Corporation, the formerly South African government owned integrated iron and steel company, now owned by ArcelorMittal;

“JORC Code” or “JORC” the Australasian Code which sets out minimum standards, recommendations and guidelines for public reporting of exploration results, mineral resources and ore reserves, prepared by the Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia, effective 2004;

“JSE” JSE Limited (registration number 2005/022939/06), a public company registered and duly incorporated in accordance with the laws of South Africa, licensed as an exchange under the Securities Services Act, and listed on the JSE;

“km” kilometres;

“Kumba Iron Ore” Kumba Iron Ore Limited (registration number 2005/015852/06), a  public company registered and duly incorporated in accordance with the laws of South Africa;

“kV” kiloVolt;

“last practicable date” the last practicable date before fi nalisation of this pre-listing statement, being Tuesday, 18 October 2011;

“LOM” life of mine;

“listing” the secondary listing of the Ferrum Crescent shares on the JSE on  the  listing date;

“listing date” the date on which the listing takes place, which is expected to be on Friday, 11 November 2011;

“Listings Requirements” the Listings Requirements of the JSE;

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“Measured Resource” that part of a mineral resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confi dence;

“m” metres;

“Minerals Act” the Minerals Act, 50 of 1991, repealed by section 110 of the MPRDA;

“Mineral Resource” or “resource” a concentration or occurrence of material of intrinsic economic interest in or on the earth’s crust in such form, quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, continuity of a mineral resource are known, estimated or interpreted from specifi c geological evidence and knowledge. Mineral resources are subdivided, in order of increasing geological confi dence, into Inferred, Indicated and Measured categories;

“Mining Charter” the Broad-based Socio-Economic Empowerment Charter for the South African Mining Industry;

“Mkhombi” Mkhombi Investments Proprietary Limited (registration number 2010/011489/07), a private company registered and duly incorporated in accordance with the laws of South Africa, and a 26% shareholder in TMT and the BEE partner to Ferrum Crescent. Mkhombi is owned by AmaMato (60%), local community (11.54%) and Nelesco (28.46%);

“Moonlight deposit” or “Moonlight” an area of iron ore mineralisation in the Limpopo Province of South Africa over which Ferrum Crescent holds a new order prospecting right, which right is subject to application but does not expire, and has submitted an application for a new order mining right, and which has a JORC compliant resource of 74Mt @ 33% Fe in the Indicated Resource category and 225Mt @ 29% Fe in the Inferred Resource category;

“Moonlight farm” the remaining extent of the farm Moonlight 111LR;

“Moonlight Iron Ore Project” the planned project for the economic development of the Moonlight deposit;

“MPRDA” the Mineral and Petroleum Resources Development Act, 28 of 2002, as amended;

“Mt” million tonnes;

“MW” megawatt;

“Nelesco” Nelesco 684 Proprietary Limited (registration number 2006/032424/07), a private company registered and duly incorporated in accordance with the laws of South Africa, and a wholly-owned subsidiary of Batavia;

“new order mining right” right to mine granted in terms of section 23(1) of the MPRDA;

“new order prospecting right” right to prospect granted in terms of section 17 of the MPRDA;

“old order mining right” any mining lease, consent to mine, permission to mine, claim licence, mining authorisation or right listed in Table 2 to Schedule II of the MPRDA, in force immediately before the date on which the MPRDA took effect and in respect of which mining operations are being conducted;

“old order prospecting right” any prospecting lease, permission, consent, permit or licence and the rights attached thereto listed in Table 1 to Schedule II of the MPRDA, in force immediately before the date on which the MPRDA took effect and in respect of which prospecting is being conducted;

“options” options to purchase ordinary shares granted under the share option plan;

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“ore reserve” the economically mineable part of a Measured or Indicated Mineral Resource. It includes diluting materials and allowances for losses which may occur when the material is mined. Appropriate assessments and studies have been carried out, and include consideration of and modifi cation by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justifi ed. Ore reserves are sub-divided in order of increasing confi dence into Probable Ore Reserves and Proved Ore Reserves;

“ProMet” ProMet Engineers Pty Ltd (registration number ABN 50 115 687 057), a proprietary company registered and duly incorporated in accordance with the laws of Australia and a co-author of the CPR;

“this pre-listing statement” or this pre-listing statement and the annexures hereto, which have been“this document” prepared in compliance with the Listings Requirements;

“QCA” Quoted Companies Alliance;

“QCA guidelines” the corporate governance guidelines for smaller quoted companies published by the QCA;

“Rand” or “R” or “ZAR” South African Rand, the lawful currency of South Africa;

“Royalty Act” the Mineral and Petroleum Resources Royalty Act, 28 of 2008;

“SARB” the South African Reserve Bank;

“Sasfi n” Sasfi n Capital, a division of Sasfi n Bank Limited (registration number 1951/002280/06), a public company registered and duly incorporated in accordance with the laws of South Africa and the corporate adviser and sponsor to the company;

“Securities Services Act” the Securities Services Act, 36 of 2004, as amended;

“SENS” the Securities Exchange News Service of the JSE;

“share plan” the Ferrum Crescent share plan in terms of which eligible employees of Ferrum Crescent may be issued shares in the company;

“share option plan” the Ferrum Crescent share option plan in terms of which eligible employees of Ferrum Crescent may be granted options;

“South Africa” the Republic of South Africa;

“Strate” Strate Limited (registration number 1998/022242/06), a registered CSDP in terms of the Custody and Administration of Securities Act, 85 of 1992, as amended;

“subsidiary” a subsidiary as defi ned in the Companies Act;

“TMT” Turquoise Moon Trading 157 Proprietary Limited (registration number 2004/031708/07), a private company registered and duly incorporated in accordance with the laws of South Africa, and a 74% owned subsidiary of Nelesco;

“transfer secretaries” Computershare; and

“US$” United States dollar, the lawful currency of the United States of America.

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Ferrum Crescent Limited (Previously Washington Resources Limited)

(Incorporated and registered in Australia and registered as an external company in the Republic of South Africa)

(Registration number A.C.N. 097 532 137)(External company registration number 2011/116305/10)

Share code on the ASX: FCR Share code on AIM: FCRShare code on the JSE: FCR ISIN: AU000000WRL8

(“Ferrum Crescent” or “the company”)

PRE-LISTING STATEMENT

PART A: THE BUSINESS OF FERRUM CRESCENT

1. INTRODUCTION

The company was incorporated in 2001 as Witkop Mining Limited. It subsequently changed its name to Washington Resources Limited and in November 2005 became an ASX listed minerals exploration and development company. In December 2009, the company acquired Ferrum Metals by way of a reverse takeover and changed its name to Ferrum Crescent Limited. On 15 December 2010 the ordinary shares of Ferrum Crescent were admitted to trading on AIM.

Through Ferrum Metals, the group has a controlling interest in TMT, a South African company, which holds the prospecting rights over two separate areas of iron ore mineralisation in South Africa; in particular the Moonlight deposit and the De Loskop prospect in the Limpopo Province of South Africa.

At the last practicable date Ferrum Crescent had a market capitalisation of A$29.2 million. This translates to a market capitalisation of about R238.9 million based on the prevailing exchange rate on such date.

Ferrum Crescent is registered as an external company in South Africa. The JSE has approved the application for a listing of all the issued ordinary shares of the company in the “Basic Materials – Basic Metals – Industrial Metals & Iron – Iron & Steel” sector of the JSE under the abbreviated name “Ferrum”, with effect from the commencement of trade on the JSE on Friday, 11 November 2011.

The purpose of this pre-listing statement is to provide information relating to Ferrum Crescent, its projects, directors and management.

2. PURPOSE OF THE LISTING

The main purposes of the listing are to:

• facilitate the BEE share exchange and the investment by BEE shareholders at a listed company level;

• provide Ferrum Crescent with an additional source from which permanent capital can be obtained, if required, to fund the group’s expansion programme and working capital requirements and to facilitate future growth;

• enhance South African investor and general public awareness of the Ferrum Crescent group and its activities, thereby enlarging Ferrum Crescent’s investor base and increasing trade in its shares;

• have the fl exibility of JSE listed shares in order to allow Ferrum Crescent to take advantage of potential South African and African acquisition opportunities;

• facilitate direct investment by South African residents in Ferrum Crescent.

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3. HISTORY AND GROUP STRUCTURE

3.1 History

Ferrum Crescent was admitted to the offi cial list of the ASX in November 2005 under the name Washington Resources Limited. In December 2009 the Company acquired Ferrum Metals by way of reverse takeover and changed its name to Ferrum Crescent Limited.

Ferrum Metals was incorporated on 5 December 2007, with the name Ferrum Crescent Limited. In April 2008, Ferrum Metals established Batavia. Batavia acquired Nelesco from Richmond Resources Proprietary Limited and Nelesco in turn acquired a 74% interest in TMT, which owns the Moonlight Iron Ore Project, from Messrs. JM Nesongozwi and HW Bonsma.

In terms of the BEE acquisition the group’s current BEE partners, Mkhombi, acquired 26% of TMT in November 2010. As part of the BEE acquisition it is envisaged that the BEE participation in the group will be restructured. The BEE restructuring involves putting in place a “fl ip” mechanism whereby AmaMato will be able, in the future, to exchange its participation at the project level for new ordinary shares in the company. The BEE acquisition and the BEE share exchange are more fully described in paragraph 7 below.

Prior to the acquisition of Ferrum Metals in December 2009, the company’s focus was on its interests in several mineral exploration tenements in Western Australia and the Northern Territory of Australia. The company entered into an agreement on 15 November 2010 pursuant to which it disposed of its Australian interests and the group’s focus is now on developing its iron ore interests in southern Africa.

3.2 Group structure

The diagram below illustrates the Ferrum Crescent group’s corporate and operating structure immediately prior to the listing:

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4. NATURE OF BUSINESS

4.1 Overview

Through Ferrum Metals, the group has a controlling interest in TMT, which holds the prospecting rights over two separate areas of iron ore mineralisation in South Africa, namely the Moonlight deposit (the Moonlight Iron Ore Project) and the De Loskop prospect in the Limpopo Province of South Africa. Since April 2008, the group has been developing and defi ning the resource potential of the Moonlight Iron Ore Project.

4.2 Moonlight Iron Ore Project

4.2.1 Tenements

The company has the prospecting rights to two separate areas of iron ore mineralisation, namely the Moonlight deposit and the De Loskop prospect. The company’s focus is on the Moonlight Iron Ore Project which is based upon the development of the Moonlight deposit. The Moonlight deposit is located 360km north of Johannesburg, 150km northwest of Polokwane and the Moonlight mining right application covers a combined area of approximately 53km2 across the following three farms:

• Moonlight;

• Gouda Fontein 76LR, portions 2 and 3; and

• Julietta 112LR.

The De Loskop prospect is located approximately 50km north of Polokwane, and the relevant prospecting right covers a combined area of approximately 120km2 across the following farms:

– the farms Lekkerlach 206LS, Zandput 202LS, Van Wyks Put 201LS, Westheim 191LS and Trieste 192 LS;

– remaining extent and portion 1 of the farm Soho 204LS;

– remaining extent of the farm and remaining extent of portions 1, 2 and 3, portions 4 to 8 of Meanderthal 188LS; and

– remaining extent and portions 1 and 2 of Persie 200LS.

An application for a mining right pertaining to iron and manganese ore, nickel, marble and limestone, over the Moonlight deposit, has been submitted, and the application formally accepted by the DMR on 25 June 2010. The DMR has indicated that it expects to process the mining right application by the end of December 2011 for an initial period of 30 years.

Further information on the project, region and location is set out in section 2 of the CPR contained in Annexure I to this document.

4.2.2 Geological background

4.2.2.1 Moonlight deposit

The Moonlight deposit is situated within the Archaean Limpopo Mobile Belt (“LMB”), which lies between the greenstone and granite terrains of the Kaapvaal and Zimbabwe Cratons (refer Figure 3.1 of the CPR in Annexure I to this document).

The LMB is subdivided into three domains, termed the Central Zone, the Southern Marginal Zone, and the Northern Marginal Zone. The Moonlight deposit is located in the Central Zone of the LMB, within which the major rock types are gneiss, granulite, quartzite, marble, and metamorphosed banded iron formation (“BIF”) of the Beit Bridge Complex. The iron mineralisation is within multiple BIF units of the Mount Dowe Group (refer Figure 3.2 of the CPR in Annexure I to this document).

Within the Moonlight farm the BIFs are present over an east-west distance of 3km and a north-south distance of 2km (refer Figure 3.3 of the CPR in Annexure I to this document). The BIF units vary from a few metres to 40m in thickness.

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Outcrop in the area is poor, with the basement rocks largely obscured by Tertiary colluviums that have an average thickness of approximately 3m. Small, scattered areas of BIF outcrop on subdued rounded ridges that rise only a few metres above the plain (refer Figure 3.7 of the CPR in Annexure I to this document). The depth of oxidation is between 50m and 65m below surface. Within the oxidised zone the  BIF  is weathered to a haematite-quartz-magnetite rock and it retains coherence and strength.

4.2.2.2 De Loskop prospect

As at Moonlight, mineralisation at De Loskop is present within BIF horizons. The BIFs are within the Zandrivierspoort Formation, which is fl anked by granitic gneisses and which contains BIFs, schists, amphibolites, quartzites, and calc-silicate rocks (refer Figure 5.1 of the CPR in Annexure I to this document).

Further information on the geological backgrounds of the Moonlight deposit and the De Loskop prospect is set out in sections 3 and 5, respectively, of the CPR in  Annexure I to this document.

4.2.3 Summary of exploration work done by ISCOR

Exploration at Moonlight commenced in 1981, when the integrated steel manufacturer, ISCOR, evaluated the economic potential of a number of relatively low-grade, but favourably located, iron ore deposits.

Between 1983 and 1986, ISCOR drilled 244 holes on the Moonlight farm in the vicinity of the mineralisation, for a total of 12 154m of diamond core drilling and 9 951m of percussion drilling. Analyses of magnetic concentrates of mineralisation and intersections from this drilling, of   over 30m at a grade of 20% Fe or higher, are set out in tables 3.2 and 3.3, respectively, of  the CPR in Annexure I to this document.

The diamond drilling was accompanied by:

• down hole surveys;

• a geotechnical study of the drill core;

• mineralogical studies;

• metallurgical testwork.

Benefi ciation testwork carried out by ISCOR indicated that a simple process of low intensity magnetic separation is suitable for optimum concentration.

ISCOR undertook several estimates of the tonnes and grade of the in situ mineralisation. As  these estimates were not reported in accordance with the JORC Code they have not been included in the CPR in Annexure I to this document.

In 1993, ISCOR’s exploration focus shifted to evaluate mineralisation on the farms Julietta and Gouda Fontein adjacent to the Moonlight section of the project. From 1993 to 1997, some 80 diamond core holes for 14 500m were completed and additional BIF mineralisation as intersected and added to ISCOR’s resource inventory.

4.2.4 Summary of exploration work done by the group

The group has to date incurred in excess of A$3.0 million in exploration costs which has enabled it to advance signifi cantly its technical knowledge of the Moonlight Iron Ore Project.

During 2008, the group drilled 20 vertical Reverse Circulation holes on the Moonlight farm for a total of 2 087m. The holes were sited to twin a range of ISCOR drill-holes. The group’s drilling program verifi ed the tenor, position, and width of signifi cant intersections of both partially oxidised and fresh BIF mineralisation reported by ISCOR. A comparison of all of the twinned intersections, using a minimum intersection width of 5m, a minimum grade of 20% Fe, and a maximum internal waste intersection of 5m, gave a total of 657m at a grade of 33.2% Fe in the 20 holes drilled by the Group compared to 704m at a grade of 32.7% Fe reported for the historical twinned ISCOR holes.

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A typical section that includes pairs of twinned holes across the shallower oxidised portion of the deposit is shown as Figure 3.10 of the CPR in Annexure I to this document; and a section across the deeper fresh portion of the mineralisation is shown as Figure 3.11 of the CPR in  Annexure 1 to this document.

During December 2009 and January 2010, the group carried out a second reverse circulation (“RC”) drill programme of 66 vertical holes for a total of 3 748m. The program was designed to infi ll-drill areas of near surface mineralisation at suffi cient density to enable the estimation of an indicated resource that would form the basis for the initial 20 to 25 years of mining at  the project.

The holes were sited to complete 100m x 100m grid patterns in three areas: southwest, southeast, and northeast (and shown in Figure 3.3 of the CPR in Annexure 1 to this document). The drilling confi rmed both the continuity and the tenor of the mineralisation. The group’s drill holes were surveyed and the locations of many ISCOR drill holes were recovered, further verifying the ISCOR database.

In the opinion of CRM, one of the competent persons responsible for the CPR in Annexure 1 to this document, the sampling, sample preparation, and analytical procedures employed by   the group during both of its drill programmes were planned and performed to high industry  standards.

In addition to the work to date in relation to the Moonlight deposit, ISCOR drilled outcrops in the Zandrivierspoort Formation on Mt De Loskop which lies to the east of the De Loskop prospect in the 1990s and reported an in situ grade of 37.8% Fe for the mineralisation in the vicinity of Mt De Loskop. This formation also hosts Kumba Resources’ Zandrivierspoort iron ore deposit about 35km to the southeast, which contains an Indicated Resource of 447Mt at a grade of 34.9 % Fe (see Figure 3.1 of the CPR in Annexure 1 to this document). As a result, CRM estimates an exploration target at the De Loskop prospect with potential mineralisation in a range of 200Mt to 1 000Mt at a grade of between 30% Fe and 40% Fe as further described in section 5.3 of the CPR in Annexure 1 to this document.

4.2.5 JORC resources

CRM completed a resource estimate for the Moonlight deposit in April 2010 (which it reconfi rmed on 26 October 2010). It is reported in accordance with the 2004 edition of the JORC Code.

The magnetite grains within the BIF are partly altered to haematite within the oxidised zone and CRM has therefore reported the resource in two classifi cations, an upper Oxidised Zone and a lower Fresh Zone.

Resource Zone and Classifi cation Tonnes Grade (kt) (Fe%)

IndicatedOxidised 34,000 30Fresh 40,000 35

Total Indicated 74,000 33

InferredOxidised 45,000 30Fresh 180,000 29

Total Inferred 225,000 29

Total Oxidised 79,000 30Total Fresh 220,000 30

Total Resources 300,000 30

Note: Totals may differ from sum of individual items due to rounding.

Source: The table is extracted from table 4.1 of the CPR in Annexure 1 to this document. The group’s net attributable resources status is set out in Appendix 1 of the CPR in Annexure 1 to this document.

23

For the upgrading of the resource classifi cations from Inferred to Indicated Resource and from Indicated to Measured Resource further infi ll drilling will be required. CRM is of the opinion that, for the Indicated Resource to be converted to a probable ore reserve, systematic metallurgical test work will need to be carried out on a full range of samples of mineralisation, in order that recoveries of Fe to concentrate can be quantifi ed for the relevant portions of  the deposit.

4.2.6 Development and overland transport

Several options have been identifi ed for the potential development of the Moonlight deposit. These development options (which are described in more detail in paragraph 4.2.7 below) take into account the markets – both domestic as well as international – for a range of downstream products; the geographic location of the Moonlight deposit, existing mines and industrial nodes in the vicinity, railheads on existing and future proposed networks, ports for shipment, and domestic iron and steel works; and availability of power, water and other utilities.

Due to the logistical constraints of moving bulk type products overland from the mine site to the market, the concentrate will be pumped as a slurry, with a return water pipeline, to an adjacent railhead or mine for dewatering and stockpiling prior to being exported or processed further. Overland slurry pumping is a proven technology and has been previously used with magnetite concentrate. The return water pipeline will allow plant make-up water and additional raw water to be conveyed from existing available sources along its length for use on the mine site or by other consumers in the mine vicinity.

4.2.7 Secondary value-adding processing

The company has considered several secondary value-adding processing options to enhance the value of products produced from the Moonlight deposit. These secondary value-adding processing options take into account several critical factors:

• the potential buyers, whether domestic or international;

• the markets for a range of downstream benefi ciated products;

• the geographic location of the Moonlight deposit, existing mines and industrial nodes in   the vicinity, railheads on existing and future proposed networks, ports for shipment, and  domestic iron and steel works; and

• availability of power, water and other utilities.

The alternatives, in no particular order of preference, that have been considered, include:

• pellets;

• using the Moonlight Iron Ore Project’s concentrate;

• using a blended mix of concentrate and South African sourced haematite fi nes;

• merchant pig iron or granulated iron; and

• semi-fi nished steel products.

These alternatives have not been evaluated technically or economically and are applicable to both domestic and international markets though some are more suited to the South African domestic market.

The Company has engaged AMEC Minproc SA to undertake a defi nitive feasibility study on its currently preferred option, the construction of a pellet plant at Lephalale for the manufacture of DRI pellets for the international and potentially the domestic South African market, with concentrate from the Moonlight deposit transported to the plant by slurry pipe.

Lephalale is situated close to power supply and railheads. In addition, locating the pelletising and other benefi ciation plant at Lephalale should enable the company to take advantage of  planned water supply upgrades.

4.3 Strategy

The company intends to develop its evaluation of the Moonlight Iron Ore Project, in order to advance towards commercial production. This will involve raising enough funds to complete the fi rst phase of the defi nitive feasibility study advised by AMEC Minproc SA.

24

The planned programme, which is to be fi nanced and implemented in discrete stages extending into 2012, will include the following:

• work aimed at increasing the confi dence and size of the current JORC compliant resource estimate;

• carrying out studies to determine the fi nal product form and/or secondary benefi ciation process;

• conducting more metallurgical testwork;

• fi nalising a social and labour plan;

• fi nalising environmental studies in respect of the project and its activities;

• endeavouring to establish alliances to secure technology supply agreements;

• fi nalising processing plant design and location, including plans for a slurry pipeline;

• identifying and preparing for all necessary permitting for the project; and

• identifying sources of fi nance for the project.

4.4 Key strengths

The company believes that its key strengths detailed below form a strong basis for the company to  achieve its targets as well as enhance its market position:

4.4.1 Magnetite resource with large upside potential

More detailed drilling at the Moonlight deposit and exploration work at the De Loskop prospect is expected to increase the group’s iron ore resource. As referred to in section 5.3 of the CPR in Annexure I to this document, CRM believes that the De Loskop prospect represents an exploration target for potential iron mineralisation, with potential mineralisation within the target area of 200Mt to 1 000Mt at a grade of between 30% and 40% Fe.

4.4.2 Oxidised Zone at surface with a low strip ratio

The oxide mineralisation, which is close to the surface, represents a potentially low stripping ratio target with consequential mining cost benefi ts. A mine pit optimisation based on utilising the Oxidised Zone indicated an average strip ratio of 1:1 and a mining rate of 4.3Mt/pa for 24 years of mine production and also uses the entire Oxidised Zone’s inferred and indicated resource.

4.4.3 Favourable metallurgical characteristics

Based upon the analyses of magnetic concentrates of mineralisation recovered from Moonlight by ISCOR and summarised in Table 3.2 of the CPR in Annexure I to this document, the directors believe the Moonlight Iron Ore Project to be capable of producing magnetite with a high Fe content, low phosphorous content and low residuals.

4.4.4 Ability to yield a premium quality concentrate

As indicated in the CPR, further test work will need to be undertaken to optimise the benefi ciation process and to enable the company to understand the variability of the ore within the deposit.

4.4.5 Support of stakeholders

The company enjoys good working relationships with the South African Government, landholders, BEE partners and neighbouring communities. These relationships have been developed as a result of the company’s fi rm commitment to excellence in its social and environmental performance. This support lays solid foundations for the group to grow in South Africa. The community that is impacted most by proposed mining activities at Moonlight has an ownership stake in the project through its shareholding in Mkhombi.

4.4.6 Strong management

The board and the company’s management team have, in aggregate, more than 280 years of mining and/or iron-making experience, having managed and operated development stage and production stage mining and processing operations, with in-depth knowledge of South Africa and the iron ore market.

25

5. OVERVIEW AND PROSPECTS OF THE IRON ORE MARKET

Overview of iron ore

Approximately 98% of all iron ore mined is used in the production of steel. The mining of iron ore globally is highly capital intensive, and requires signifi cant investment in infrastructure such as rail in order to transport ore from the mines to industry. The main constraints are the position of the iron ore mines relative to market, the cost of rail infrastructure to get the product to market and the energy cost required to do so, rather than the grade or size of the deposits. For these reasons, iron ore production is  concentrated in the hands of a few major players.

World production averages approximately two billion metric tons of raw ore annually. The world’s largest producer of iron ore is the Brazilian mining corporation Vale S.A., followed by Anglo-Australian companies BHP Billiton plc and Rio Tinto Group. A further Australian supplier, Fortescue Metals Group Ltd has helped bring Australia’s production to second in the world, behind Brazil.

Iron ore qualities

Pure iron is denominated as Fe on the periodic table and metal compounds containing iron are known as ferrous metals. These metals are magnetic in nature, which differentiates them from non-ferrous metals, they have a high tensile strength and they are prone to oxidation, which can be seen as a reddish brown deposit on the surface.

Iron ore refers to rocks and minerals from which metallic iron can be economically extracted. The ores are usually rich in iron oxides and vary in color from dark grey, bright yellow, deep purple, to rusty red. The iron itself is usually found in the form of magnetite, hematite, goethite, limonite or siderite. Currently most of the iron ore mined in the world comes from large deposits of hematite rock which are most commonly found in banded iron formation (“BIF”).

There are three basic types of commercial iron ore: 70% – 80% of iron ore produced globally is fi ne powdered iron ore (“fi nes”), and the remainder is comprised of lump or pellets. Lump and pellets are known as “direct charge” materials, which means that they can be poured directly into a blast furnace with no further processing and they therefore trade at a premium to fi nes. Pellets are more costly to produce, however, the availability and quality of lump ore is declining worldwide and the market for pellets is therefore likely to become stronger to compensate. World pellet production rose by 32% in 2010 to 388.1Mt from the 295.7Mt produced in 2009, a new record level. There are emerging markets for new varieties of smelter feedstock including sintered iron carbide and direct-reduced iron ore, which is high-grade natural ore with Fe >69% and low levels of specifi c trace elements suitable as feed to direct reduction smelters.

High-grade ore refers to ore which contains more than 60% Fe. Low-grade ore is a term applied to iron-rich rocks with cut-off grades in the range of 25% to 30% Fe. The dominant iron mineral in low-grade economically mineable ore is magnetite.

Iron ore in South Africa

South Africa is the seventh largest producer of iron ore in the world. The six largest producers ahead of  South Africa, in order, are Brazil, Australia, China, India, Russia and the Ukraine.

The South African mining company, Kumba Iron Ore, previously Kumba Resources, is the largest producer of iron ore in Africa. It was spun off from previously state owned ISCOR (now part of ArcelorMittal), the largest South African steel producer, in November 2001. Kumba Iron Ore owns two iron ore mines, Sishen and Thabazimbi; together these two mines account for 76.3% of the country’s total production. Sishen, having produced 41.3Mt of iron ore in 2010 is by far the largest iron ore mine in Africa.

Iron ore supply

Global supply

In 2010 the world iron ore market recovered from the recession of 2009 and a new production record of 1827.1Mt was reached, approximately 8.6% higher than the 2008 volume of 1681.8Mt and a 17.6% increase on 2009 levels. This represented a faster recovery than most analysts and experts had anticipated. Developing countries accounted for 58.6% of world iron ore production in 2010 (up from 57.8% in 2009), the Commonwealth of Independent States countries accounted for just over 11.1% and

26

the industrialised economies for almost 30.3%. The increase in developing countries’ share of global production was primarily due to the growth in Brazil’s production by 70Mt and Chinese production by 96Mt. Chinese production, on a comparable grade basis, produced 315.4Mt, or 17.3% of total world production in 2010, up from 14.3% in 2009 but below its peak of 20% in 2007. Chinese crude steel production during the fi rst four months of 2011 was 290.3Mt, compared to 267.5Mt for the same period in 2010, an increase of 8.5%.

South African supply

South Africa holds an estimated one billion tons of crude iron ore reserves and 650 billion tons of iron ore content reserves. South Africa’s iron ore production increased by 2.7%, from 55.4Mt in 2009 to an estimated 56.9Mt in 2010. The country accounts for more than 80% of Africa’s total production and exports. The relatively low increase in production in 2010 came after South Africa had a sharp production increase in 2009 when most exporting countries experienced an economic slowdown and associated decreases in their iron ore production. South African exports of iron ore increased by 7.6% to 48.0Mt in 2010, up from 44.6Mt in 2009. South Africa’s primary iron ore export destinations are China (2010: 30.2Mt/p.a), Japan (2010:6.0Mt/p.a) and Germany (2010: 5.5Mt/p.a).

Iron ore demand

Global demand

In 2010, international iron ore trade reached a new record level as exports increased for the ninth year in a row and reached 1053Mt, an increase of 12% over 2009. The increase was the result of higher demand from most countries in the world as they recovered from the recession. However, most countries have still not reached their import levels of 2008.

In 2003, China passed Japan to become the world’s largest iron ore importer. In 2010, its imports were 619Mt, a slight decrease by 1.8% compared to 2009. In 2009, China accounted for almost 67% of total world imports. In 2010, this fi gure had decreased to 59%. Imports rose in 2010 in most other countries. Japan rose by 27% to 134Mt, the Republic of Korea by 34% to 56Mt, European imports (excluding the CIS countries) increased by 40% to 134Mt. In Europe, Germany, France, Italy and the United Kingdom are the largest importers, however, all were affected by the economic crisis in 2009 and imports fell accordingly. Global imports of iron ore in the fi rst fi ve months of 2011 were up by 8.0% to reach 283.3Mt, compared to 262.2Mt in the fi rst fi ve months of 2010.

The World Steel Association expects global steel demand to continue growing at historically high rates with a forecast CAGR of 4% year on year for the foreseeable future, although China’s growth is expected to slow down considerably from previous highs. The successful reorientation of Chinese growth is essential both to the health of the world economy and to continued steel demand growth. The United Nations project annual growth in China’s crude steel production to be 4.4% over the period 2010 to 2015, while steel production in the rest of the world would grow at a rate of 3% per year.

Global iron ore use is expected to increase from 1818Mt in 2010 to about 1910Mt in 2011 and 1990Mt in 2012. Iron ore mines outside China are ramping up production to respond to the surge in expected demand and new mining projects are being developed. The United Nations believe that while the market is moving towards a balanced supply and demand situation, equilibrium will only be reached in 2013 at the  earliest, by a gradual adaptation of supply, by way of addition of new capacity, to a continuously growing demand. Prices will remain at levels that must be considered high from a historical perspective, with a fl oor at around 110 – 120 US$/ton for ore delivered in China.

South African demand

The majority of South Africa’s demand for iron ore is in the production of steel. More than 85% of South Africa’s steel is consumed in industry sectors for which steel’s share of the fi nal product value is usually very low (less than 5%). These industries include building and construction (40% of total demand), the motor vehicle industry (11%), machinery (9%), mining (7%), electrical appliances (4%) and white goods (2%). Less than 15% of steel is consumed in industry sectors for which steel’s share of the fi nal product value is high (greater than 50%). These industries include specialised machinery and packaging, accounting for 9% and 7% respectively of South Africa’s steel demand.

ArcelorMittal only sells 10% of its output in the so-called “deep-sea” export markets. Construction and the automotive industry combined account for just over half of South Africa’s local steel demand.

27

Current and forecast iron ore prices

During 2010, the termination of the annual benchmark pricing system was confi rmed. The emergence of a broad spot market made it impossible to retain a system of fi xed prices. When spot prices were very low, buyers of iron ore had an incentive to default on contractual commitments and when spot prices were very high, sellers had good reason to do the same. At present, annual prices are negotiated between a small number of mining companies. The introduction of three competing price indices (Metal Bulletin, Platts and The Steel Index) has made it easier for market participants to judge which way prices are moving. Hedging opportunities have multiplied rapidly and there are now several market places for the clearing of OTC (over the counter) iron ore swaps.

Source: The United Nations Trust Fund on Iron Ore Information 2010; Creamer Media Real Economy Insight: Iron Ore July 2011; Reuters; various analyst and market commentator reports

6. PROSPECTS

6.1 Prospects for the South African iron ore market

South Africa holds an estimated one-billion tons of crude iron ore reserves and 650 billion tons of iron ore content reserves. The country accounts for more than 80% of Africa’s total production and exports.

Kumba Iron Ore is the largest producer of iron ore in Africa. It has an aggressive long -term growth strategy and at the end of 2007, the Kumba Projects Department was formalised to coordinate Kumba Iron Ore’s overall project development work, with the intention to achieve production of 70Mt of ore a year by 2019. Kolomela (Sishen South), the next step towards realising this strategy, is on schedule to start production by the end of 2012 and to ramp up to production of 9Mt/pa in 2013. The project has a total capital expenditure of R8.5 billion. This expansion is however dependent upon market conditions and rail and port expansions. Transnet, the operator of the 861km railway line from the mines to the Saldanha Bay harbour north of Cape Town, is committed to expand the Sishen-Saldanha iron ore export channel from today’s 47Mt/pa to 60Mt/pa. During 2010, a joint task team was established between the iron ore producers and Transnet to explore the potential expansion of the railway line capacity to more than 60Mt/pa.

Assmang Limited is the second largest iron ore mining company in South Africa and its Beeshoek iron ore mine produced 0.5Mt in 2010. The mine is however reaching the end of its economic life and will not be able to sustain its current output. For this reason the Khumani iron ore mine was opened in 2008 and reached production output of 8.8Mt in 2010. At the present production rate the Khumani life of mine is greater than 40 years, however, there is a strategy in place to increase the current levels of production.

Source: The United Nations Trust Fund on Iron Ore Information 2010.

6.2 Current trading and prospects for Ferrum Crescent

On listing on the JSE, the company will have cash resources of approximately A$ 6.5 million. The company does not currently generate operating revenue. The directors believe that the company will be well-placed to enhance its value by determining the best development route for the Moonlight Iron Ore Project, and preparation for fi nancing and development of the project through the commissioning of a DFS.

7. BEE PARTICIPATION

General requirements

Mining companies operating in South Africa are required to comply with various regulatory requirements including, inter alia, the MPRDA and the Mining Charter.

The objective of the MPRDA is to facilitate meaningful participation of HDSAs in the mining and minerals industry in South Africa.

The Mining Charter and its associated scorecard, which were gazetted on 13 August 2004, were developed in terms of section 100(2)(a) of the MPRDA, to set the framework, targets and timetable for

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effecting the entry of HDSAs into the mining industry. The Mining Charter and scorecard were amended by the Minister of Mineral Resources on 13 September 2010.

In terms of the Mining Charter and the scorecard, mining companies are required to meet targets in respect of different aspects of their business including human resource development, employment equity, mine community development, housing and living conditions, procurement and enterprise development, ownership, benefi ciation, sustainable development and growth, and reporting.

In terms of the ownership requirement set out in the Mining Charter and the related scorecard, mining companies are required to have a minimum HDSA shareholding of 15% increasing to 26% by 2014.

BEE acquisition

As announced by the company to the ASX on 5 November 2010 and to AIM on 23 December 2010, the company has restructured the group’s BEE participation by means of the BEE acquisition in terms of which the 26% BEE interest in TMT was acquired by the BEE controlled company, Mkhombi, for a consideration of ZAR30 million. Mr Kofi Morna, who is a director of Mkhombi, is also a director of the company.

Mkhombi is owned by three shareholders, namely AmaMato, a company representing broad-based BEE groups (60%), Nelesco (28.46%) and a trust representing the local community affected by the Moonlight Iron Ore Project (11.54%). Nelesco’s shareholding in Mkhombi has resulted in it holding an additional effective 7.4% in the Moonlight Iron Ore Project in addition to its direct 74% holding in TMT.

Proposed BEE share exchange

The BEE acquisition agreements establishing the structure of the BEE holding also provide for the BEE share exchange or what is known within South Africa as the “fl ip”. This is a mechanism whereby BEE entities convert their equity at the project level into shares at the listed holding company level, allowing them both to enjoy the benefi ts of corporate growth (which may involve different projects) and the potential to realise the growth in value of their investment because of the greater liquidity in the holding company shares.

Nelesco and the company respectively have thus agreed with AmaMato, the major shareholder of Mkhombi, that Nelesco will purchase AmaMato’s 60% interest in Mkhombi for ZAR7.5 million in terms of the sale agreement, and AmaMato will subscribe for new ordinary shares in the company for ZAR7.5 million, equal to 7.8% of the ordinary shares in issue at that time in terms of the subscription agreement. The sale agreement and the subscription agreement are subject to the fulfi l ment of certain conditions precedent by 1 November 2012 (or such date as may be agreed by the parties), which conditions include the grant of a mining right in respect of the Moonlight Iron Ore Project, exchange control approval from the SARB and necessary approvals under the Corporations Act and ASX Listing Rules, including the requirement for  Ferrum Crescent shareholder approval.

AmaMato will also, on or before the earlier of: (i) the date falling 120 days after the closing date (as defi ned in the subscription agreement referred to above) and (ii) 1 November 2011, subscribe for a further 7.8% of the issued shares of the company (calculated by reference to the issued share capital of the company at the time of the fi rst subscription adjusted for any subsequent share splits, consolidations or  bonus capitalisations) for a further ZAR 7.5 million.

Should the conditions precedent to the sale and subscription agreements not be fulfi lled by 1 November 2012 (or such date as may be agreed by the parties), AmaMato has the right to require the group to buy AmaMato’s shares in Mkhombi for ZAR 12.5 million.

The granting of the mining right by the DMR in respect of the project is not expected to occur before December 2011 at the earliest. As a result, the directors do not currently expect the BEE share exchange to take place before January 2012.

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The following fi gure shows how the group will be structured upon completion of the BEE share exchange:

Upon completion of the BEE share exchange, the company will legally own, directly and indirectly, through Mkhombi, 97% of TMT, with the remaining 3% held by the locally impacted community. AmaMato will own 15.6% of the company.

8. SOUTH AFRICAN OPERATING ENVIRONMENT

8.1 The MPRDA

The MPRDA came into effect on 1 May 2004 and repealed the Minerals Act.

The objectives of the MPRDA include, inter alia, the promotion of equitable access to the nation’s mineral and petroleum resources to all the people of South Africa, the promotion of economic growth and mineral and petroleum resources development in South Africa and the promotion of employment and the advancement of social and economic welfare of all South Africans.

Mineral resources are considered to be the common heritage of all the people of South Africa and the MPRDA therefore vests custodianship of mineral resources in the State, for the benefi t of all South Africans.

Transitional provisions were included in the MPRDA which allowed mining companies or other holders of prospecting and/or mining rights and permits to convert the rights to prospect and mine that they held prior to the MPRDA coming into force, to the new order rights introduced by the MPRDA.

Holders of unused old order rights needed to apply, before 1 May 2005, for prospecting or mining rights under the MPRDA to replace the rights they held before 1 May 2005.

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With regard to old order prospecting rights and old order mining rights, any rights to prospect or mine, and prospecting permits or mining authorisations granted under the Minerals Act, continued to be valid for the period granted under the old legislation, subject to maximum periods of two and fi ve years, respectively. In order to continue with mining or prospecting operations, the holders of old order prospecting and mining rights had to apply for the conversion of the rights that they had previously held under the Minerals Act to the new form of prospecting or mining rights provided for under the MPRDA within the aforementioned transitional periods.

Under the MPRDA, new order prospecting rights will initially be granted for a maximum period of   fi ve years, and can be renewed once, upon application, for a further period not exceeding three  years. New order mining rights will be valid for a maximum period of 30 years and can be renewed upon application for further periods, each of which may not exceed 30 years. Provision is made for the granting of retention permits in circumstances where prospecting has been completed but mining is not commercially viable, which will have a maximum term of three years and are not renewable. A wide range of factors and principles, including proposals relating to BEE, labour and social responsibility and evidence of an applicant’s ability to conduct mining optimally, are   pre -requisites  for these applications.

8.2 Mining Charter

The MPRDA required of the Minister of Minerals and Energy to develop a charter for the mining industry within six months of MPRDA taking effect. Consequently, the South African Government appointed a task team to develop the Mining Charter, which was signed on 11 October 2002 by the Minister of Minerals and Energy, representatives of the mining industry and the National Union of Mineworkers. The Mining Charter and scorecard were amended by the Minister of Mineral Resources on 13 September 2010.

The objectives of the Mining Charter, which is designed to effect sustainable growth and meaningful transformation of the mining industry include, inter alia, the promotion of equitable access to the nation’s mineral resources to all the people of South Africa, to expand opportunities for HDSAs to enter the mining and minerals industry and benefi t from the exploitation of the nation’s resources and to promote sustainable development and growth of the mining industry.

The Mining Charter embraces a range of criteria against which prospecting and mining right applications are considered. These criteria include issues such as human resources development, employment equity, procurement, community and rural development and the ownership of mining assets by HDSAs.

On the issue of ownership, which is one of the key requirements to effect meaningful integration of HDSAs into the mainstream economy, the Mining Charter required that mining companies achieved 15% HDSA ownership of mining assets by 2009 and requires that mining companies achieve a minimum target of 26% HDSA ownership of mining assets by 2014.

Ferrum Crescent is committed to the principles of empowerment underlying the Mining Charter, as is set out in further detail in paragraph 7 above.

8.3 Royalty Act

The Royalty Act came into operation on 1 May 2009 and applies in respect of a mineral resource transferred on or after that date.

A person that wins or recovers a mineral resource from within South Africa (“the extractor”) must pay a royalty for the benefi t of the National Revenue Fund in respect of the transfer of that mineral resource.

The royalty on the transfer of iron ore is determined by multiplying the gross sales of the extractor for the year under assessment by the percentage calculated using the following formula:

• 0.5 + [earnings before interest and taxes / (gross sales in respect of unrefi ned mineral resources x 12.5)] x 100

The percentage calculated by the above formula must not exceed 5%.

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PART B: RISK FACTORS

9. RISK FACTORS

You should carefully consider the risks described below and the other information in this pre-listing statement before making a decision to invest in Ferrum Crescent shares. Although information has been provided herein in relation to Ferrum Crescent shares, a prospective investor, having made enquiries, should use his or her own judgment and seek advice from an independent fi nancial adviser as to the appropriate value of such shares. In considering whether to hold or invest in Ferrum Crescent shares, each investor should have regard to various issues that include, but are not limited to, the risks set out hereunder:

Specifi c risk factors

Risks relating to the group’s operations and industry

Early stage of operations

The group’s operations are at an early stage of development and success will depend on the directors’ ability to manage the current projects and to take advantage of further opportunities which may arise. There can be no guarantee that the company or any member of the group can or will be able to, or that it will be commercially advantageous for it to, develop all or any part of the project. Further, the group currently has no assets producing positive cash fl ow and its ultimate success will depend on its ability to generate cash fl ow from active mining operations in the future and its ability to access equity markets for its development requirements.

An investment in the company is speculative and involves a high degree of risk. Future results, including recovery factors and work program plans and schedules, may be affected by changes in market conditions, commodity price levels, political and regulatory developments, timely completion of exploration program commitments or projects, the outcome of commercial negotiations and technical or operating factors.

Ore reserve and resource estimates are uncertain and subject to change

The estimation of mineral reserves and mineral resources is a subjective process and the accuracy of reserve and resource estimates is a function of the quantity and quality of available data and the assumptions used and judgements made in interpreting engineering and geological information. There is signifi cant uncertainty in any reserve or resource estimate and the economic viability of mining a deposit may differ materially from the group’s estimates. The exploration of mineral rights is speculative in nature and is frequently unsuccessful. The group may therefore be unable to discover and/or exploit reserves successfully.

Estimated mineral reserves or mineral resources may also have to be recalculated based on changes in iron ore or other commodity prices, further exploration or development activity and/or actual production experience. As further information becomes available through additional fi eldwork and analysis the estimates may change, which could result in:

(i) alterations to development and mining plans which may, in turn, adversely affect the group’s operations;

(ii) a material adverse effect on estimates of the volume or grade of mineralisation, estimated recovery rates or other important factors that infl uence reserve or resource estimates.

Any signifi cant difference between the group’s actual reserves and resources and its current estimates, could have a material adverse effect on the group’s business, results of operations, fi nancial condition and/or growth prospects.

Exploration, development and operating risks

Mining operations generally involve a high degree of risk. The group’s operations are subject to all the hazards and risks normally encountered in the exploration, development and production of iron ore, including unusual and unexpected geologic formations, seismic activity, rock bursts, cave-ins, fl ooding, pit wall failure and other conditions involved in the drilling and removal of material, any of which could result in damage to, or destruction of, mines and other producing facilities, damage to life or property,

32

environmental damage and possible legal liability. Although adequate precautions to minimise risk will be taken, mining operations are subject to hazards such as fi re, equipment failure or failure of retaining dams around tailings disposal areas which may result in environmental pollution and consequent liability.

The exploration for and development of mineral deposits is speculative and involves signifi cant risks which even a combination of careful evaluation, experience and knowledge may not eliminate. Few properties that are explored are ultimately developed into producing mines. Once iron ore is discovered it can take several years to determine whether reserves exist. During this time the economic viability of production may change. Substantial expenditure may be required to locate and establish mineral resources or reserves through drilling, metallurgical and other testing techniques, to develop metallurgical processes to extract iron from the iron ore and to construct mining and processing facilities at a particular site. It is impossible to ensure that the exploration or development programmes planned by the group will result in a profi table commercial mining operation. Whether a mineral deposit will be commercially viable depends on a number of factors, some of which are:

(i) the particular attributes of the deposit, such as size, grade and proximity to infrastructure;

(ii) metal prices that are highly cyclical; and

(iii) Government regulations, including regulations relating to prices, taxes, royalties, land use, importing and exporting of minerals and environmental protection.

The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in the company not receiving an adequate return on invested capital.

There is no certainty that the expenditures made by the group towards the exploration and evaluation of  mineral deposits will result in discoveries or development of commercial quantities of ore.

The group may consider from time to time the acquisition of iron ore reserves, development properties and operating mines, either as stand-alone assets or as part of companies. Its decisions to acquire these properties will be based on a variety of factors including historical operating results, estimates of and assumptions about future reserves, cash and other operating costs, the iron ore price and projected economic returns, and evaluations of existing or potential liabilities associated with each property and its operations. Other than historical operating results, all of these parameters may differ signifi cantly from the group’s estimates and assumptions. The exact effect of these factors cannot be accurately predicted, but a combination of any of these factors may result in the company not receiving an adequate return on  invested capital.

Exploitation risks

There can be no assurance that any resources recovered can be brought into profi table production. Market price fl uctuations, increased production costs or reduced recovery rates, or other factors may render the present estimated or inferred resources of the group uneconomical or unprofi table to develop at a particular site or sites.

Further the group may not be able to exploit commercially viable discoveries which it owns or in which it acquires an interest. Exploitation may require external approvals or consents from relevant authorities and the granting of these approvals and consents is beyond the group’s control. The granting of such approvals and consents may be withheld for lengthy periods, not given at all, or granted subject to the satisfaction of certain conditions which the group may not be able to meet. As a result of such delays, the group may incur additional costs, losses or lose revenue or part or all of its equity in a licence. If at any stage the group is precluded from pursuing its exploration programme or the exploration programme is not continued, the group’s business, result of operations, fi nancial condition and/or growth prospects may be materially adversely affected. Additionally, should the regulatory regime in an applicable jurisdiction in which the group operates or wishes to exploit mining rights be modifi ed in a manner which adversely affects natural resources facilities or projects, including taxes and permit fees, the returns to the group may be adversely affected.

Operational targets and delays

The group’s operational targets will be subject to the completion of planned operational goals on time and according to budget, and are dependent on the effective support of the group’s personnel, systems, procedures and controls. Any failure of these may result in delays in the achievement of operational targets with a consequent material adverse impact on the business, operations and fi nancial performance of the group. The group will not generate any material income until mining has successfully commenced. In the meantime the group will continue to expend its cash reserves.

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Prospecting and exploration licences and mining concessions

The group has secured a prospecting right for the Moonlight Iron Ore Project. Prior to the commencement of mining and processing activities, mining licences and all other permits and regulatory consents will need to be obtained.

Although the group has submitted its mining right application for the project and the directors believe that the mining right, permits and other regulatory consents required for the commencement of mining and production activities should be forthcoming, there can be no assurance regarding these matters. The prospecting and exploration licences currently held by the group and any mining or prospecting and exploration licences acquired by the group in the future will be subject to licence requirements, which include, inter alia, certain fi nancial commitments which, if not fulfi lled, could result in the suspension or  ultimate forfeiture of the relevant licences.

Failure by the group to obtain the necessary mining licences, government consents, revocation of an existing licence, failure to renew a licence or failure to obtain a licence that is required to move from one stage of the industry cycle to another (including, for example, the exploration phase to the exploitation phase) could have a material adverse effect on the group’s fi nancial performance, may lead to a reduction in the carrying value of assets and may materially jeopardise the viability of the group’s projects. Where the group fails to comply with its respective obligations under any such licences or permits, then such licence or permit may be lost, forfeited or not renewed by the grantor.

Commodity prices

The profi tability of the group’s operations will be to an extent dependent upon the market price of mineral commodities. Mineral prices fl uctuate widely and are affected by numerous factors beyond the control of the group. The level of interest rates, the rate of infl ation, the world supply of mineral commodities and the stability of exchange rates can all cause signifi cant fl uctuations in mineral prices.

Such external economic factors can in turn be infl uenced by changes in international investment patterns, monetary systems and political developments. The price of mineral commodities has fl uctuated widely in recent years, and future price declines could cause commercial production to be impracticable, thereby having a material adverse effect on the company’s business, fi nancial condition and results of operations.

Furthermore, reserve calculations and life-of-mine plans using signifi cant lower iron prices could result in material write-downs of the group’s investment in mining properties and increased amortisation, reclamation and closure charges.

In addition to adversely affecting the group’s reserve estimates and its fi nancial condition, declining commodity prices can impact operations by requiring a reassessment of the feasibility of a particular mining project. Such a reassessment may be the result of a management decision or may be required under fi nancing arrangements related to a particular project. Even if the project is ultimately determined to be economically viable, the need to conduct such a reassessment may cause substantial delays or may interrupt operations until the reassessment can be completed.

Competition

The mining industry is intensely competitive in all of its phases and the group competes with many companies possessing greater fi nancial and technical resources than itself. Competition in the minerals and mining industry is primarily for mineral rich properties that can be developed and produced economically; the technical expertise to fi nd, develop, and operate such properties; the labour to operate the properties; and the capital for the purpose of funding such properties. Many competitors not only explore for minerals, but conduct refi ning and marketing operations on a global basis. Such competition may result in the group being unable to acquire desired properties, to recruit or retain qualifi ed employees or to acquire the capital necessary to fund its operations and develop its properties. Existing or future competition in the mining industry could materially adversely affect the group’s prospects for mineral exploration and success in the future.

Requirement for further funding

In the opinion of the directors, having made due and careful enquiry and taking into account the net proceeds of the placing, the working capital available to the company will be suffi cient for its present requirements, that is for at least the next 12 months from the date of listing on the JSE. However, the company may need to raise further funds after the initial 12 month period from the date of the listing on the JSE in order to fulfi l its stated objectives. There is no guarantee that the then prevailing market

34

conditions at that time will allow for such a fundraising or that new investors will be prepared to subscribe for ordinary shares at the same price as the placing price or higher. Failure to obtain additional further funding after the initial 12 month period after listing on the JSE, on acceptable terms or at all, could have a material adverse effect on the results of operations, fi nancial condition and prospects of the group.

Infrastructure

Mining, processing, development and exploration activities depend, to a signifi cant degree, on adequate infrastructure. As part of the project development the company will need to construct and support the construction of infrastructure, which includes permanent water supplies, power, rail and maintenance facilities, port and logistics services and access roads. Reliable port and rail facilities, roads, bridges, power sources and water supply are important determinants, which affect capital and operating costs. Unusual or infrequent weather phenomena, sabotage, Government or other interference in the maintenance or provision of such infrastructure could adversely affect the group’s operations, fi nancial condition and results of operations.

Any such issues arising in respect of the supporting infrastructure or on the group’s site could materially and adversely affect the group’s results of operations or fi nancial condition. Furthermore, any failure or unavailability of the group’s operational infrastructure (for example, through equipment failure or disruption to its transportation arrangements) could adversely affect the production output from its mines or impact its exploration activities or development of a mine or project.

Environmental factors

The group may be involved in operations that may be subject to environmental and safety regulation (including regular environmental impact assessments and permitting). This may include a wide variety of matters, such as prevention of waste, pollution and protection of the environment, labour regulations and worker safety. The regulations may change in a manner that may require stricter or additional standards than those currently in effect, a heightened degree of responsibility for companies and their directors and employees and more stringent enforcement of existing laws and regulations. There may also be unforeseen environmental liabilities resulting from exploration and development activities, which may be costly to remedy. In particular, the acceptable level of pollution and the potential clean up costs and obligations and liability for toxic or hazardous substances for which the group may become liable as a result of its activities may be impossible to assess against the current legal framework and current enforcement practices of the various jurisdictions. There is no assurance that future changes in environment regulation will not adversely affect the activities of the group.

Currency risk

The company reports its results in Australian dollars and will hold the majority of its cash in Australian dollars/South African Rand. However, expenditure will be in three different currencies, being Australian dollars, pound Sterling and South African Rand. The group’s substantial costs related to exploration costs are expected to be predominantly in South African Rand.

Fluctuations in exchange rates between currencies in which the group invests, reports or derives income, particularly a weakening in the value of Australian dollars as compared to the South African Rand and pound Sterling, may cause fl uctuations in the company’s fi nancial results that are not necessarily related to the group’s underlying operations. This may result in additions to the company’s reported costs or  reductions in the company’s reported revenues.

Dependence upon key employees

The group’s future success is substantially dependent upon the continued services and performance of  its senior management and other key personnel in the various areas of the group’s business. The loss of the services of certain key employees or the inability to recruit personnel of the appropriate calibre could have a material adverse effect on the business of the group.

Uninsured risks

The group, as a participant in exploration and mining programmes, may become subject to liability for hazards that cannot be insured against or against which it may elect not to be so insured because of high premium costs. The group may incur a liability to third parties (in excess of any insurance cover) arising from pollution or other damage or injury. Any such liability could materially adversely affect the performance of the group.

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Limited operating history

The company does not have an established operating track record. The company has not earned profi ts since incorporation and there is no assurance that it or the group will earn profi ts in the future. The  group  is  not currently generating positive cash fl ow and its ultimate success will depend on its ability to generate positive cash fl ow from its investments in the future.

Lack of dividends for the foreseeable future

For the foreseeable future, the group intends to retain any future earnings for the business and therefore the company does not anticipate paying dividends in the short to medium term.

Dilution of shareholders’ interests

The company is likely to need to raise additional funds in the future to fi nance its investments and acquisitions. If additional funds are raised through the issuance of new equity or equity-linked securities of the company other than on a pro rata basis to existing shareholders, the percentage ownership of the shareholders may be reduced, shareholders may experience subsequent dilution and/or such securities may have preferred rights, options and pre-emption rights senior to the ordinary shares. The directors propose that the company should be able to issue new ordinary shares as consideration for further acquisitions and/or raise additional working capital for the company as required. Insofar as such new ordinary shares are not offered fi rst to existing shareholders, then their interests in the company will be diluted.

Risks relating to South Africa

General

The operations of the company are subject to risks normally associated with the conduct of business in South Africa. Risks may include, inter alia, problems relating to labour disputes, delays or invalidation of governmental orders and permits, corruption, uncertain political and economic environments, civil disturbances and crime, changes in laws or policies, foreign taxation and exchange controls, opposition to mining from environmental or other non-governmental organi sations or changes in the political attitude towards mining, infrastructure limitations and increased fi nancing costs.

Environmental risks

All phases of the company’s operations are subject to environmental regulation in South Africa. Environmental legislation in many countries is evolving and the trend has been toward stricter standards and enforcement, increased fi nes and penalties for non-compliance, more stringent environmental assessments of proposed projects and increasing responsibility for companies and their offi cers, directors and employees. Compliance with environmental laws and regulations may require signifi cant capital outlays on behalf of the company and may cause material changes or delays in the company’s intended activities.

BEE and social development

The company must comply with and remain compliant with the Mining Charter, the Mining Codes and the BEE participation requirements and the approved social and labour plan in order to retain prospecting and mining rights. Any failure by the company to satisfy and to continue to satisfy the BEE requirements of the MPRDA, the Mining Charter, the approved social and labour plan and/or the Mining Codes could jeopardise the prospecting rights held by the company.

Compliance with the requirements of the Charter may increase the costs of the company’s operations and affect profi tability.

Water supply

The project is located in semi-arid area with no direct access to reliable source of water. Due to the size of the water requirements for the concentrator, a water storage pond is needed. The company is   contemplating various solutions to secure reliable access to water. The company may be required in   the future to apply for and obtain water use licences from the relevant governmental authorities. The  process for obtaining a water use licence is a lengthy process and the company’s mining operations may be adversely affected in the event that the relevant licences are not obtained in a timely manner. An  inadequate water supply would negatively affect the project.

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Electricity supply

The Moonlight deposit is located in a remote area and there is at present only very limited local power available. The nearest existing transmission line is 15km west of the site (running from Villa Nora to Tom Burke substation) with approximately 18 MW spare capacity and could be extended to the mine to provide that level of power supply. Eskom would typically supply the 132 kV mine/plant switchyard including two transformers. Customer tie-in point would be the transformer medium voltage terminals. Local 22 kV infrastructure can possibly be utilised for construction power, up to 2 MW to 3 MW. This would eliminate the need for a diesel generating station, other than for backup power. At present there is limited additional generating capacity (network strength); however, the directors envisage that additional power will become available starting from the middle of 2012 when the fi rst Medupi generating unit (rated 800 MW) is scheduled to come on line. The remaining fi ve units will then be brought into service at eight month intervals. The directors envisage, therefore, that the network will be signifi cantly strengthened before the mine and plant begin operation, and continuity of supply is not regarded as a major concern

Risks related to an investment in Ferrum Crescent’s shares

Price volatility

Markets have a high level of price and volume volatility, and many companies have experienced wide fl uctuations in their market prices which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. Factors unrelated to the fi nancial performance or prospects of the company include macroeconomic developments globally, and market perceptions of  the attractiveness of particular industries. There can be no assurance that continued fl uctuations in iron ore prices will not occur. As a result of any of these factors, the market price of the shares of Ferrum Crescent may not accurately refl ect the long-term value of the company.

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PART C: DIRECTORS AND SENIOR MANAGEMENT

10. DIRECTORS AND MANAGEMENT

Details of the current directors of Ferrum Crescent and its subsidiaries are set out below:

Full name, age and nationality Business address Designation/Function

Edward Francis Gerrard Unit 2, Level 1 Ferrum Crescent – executive chairmanNealon (61) Churchill CourtAustralian 331 – 335 Hay Street Subiaco WA 6008 Australia

Robert Hair (58) Unit 2, Level 1 Ferrum Crescent – managing director, Australian Churchill Court Ferrum Metals, Batavia, Nelesco, 331 – 335 Hay Street TMT – director Subiaco WA 6008 Australia

Kofi Morna (53) 24 Crescent Drive Ferrum Crescent – non-executive directorSouth African Melrose Arch Melrose, 2196 South Africa

Theodore Carl Droste (70) Palazzo Towers West Ferrum Crescent – independentSouth African Montecasino Boulevard non -executive director Fourways, 2055 South Africa

Klaus Borowski (71) Palazzo Towers West Ferrum Crescent – independentGerman Montecasino Boulevard non-executive director Fourways, 2055 South Africa

Grant Michael Button (49) Unit 2, Level 1 Ferrum Crescent – fi nancial directorAustralian Churchill Court 331 – 335 Hay Street Subiaco WA 6008 Australia

Kevin Scott Huntly (49) Palazzo Towers West Batavia, Nelesco, TMT – executive directorSouth African Montecasino Boulevard Fourways, 2055 South Africa

Ayanda Laura 24 Crescent Drive TMT – non-executive directorNgubane (31) Melrose ArchSouth African Melrose, 2196 South Africa

The profi les of the executive and non-executive directors of Ferrum Crescent and its subsidiaries are  set  out below:

Edward Francis Gerrard Nealon (Executive Chairman)Qualifi cations: – B.Sc (Hons) , M.Sc , C.Eng , M.Aus.IMM

Mr Nealon is a geologist with some 37 years’ experience in the mining and exploration industry. After graduating in 1974, he commenced his career in South Africa with Anglo American Corporation, before moving to Australia in 1980 where he spent two years in exploration with the Rio Tinto Group. He founded his own consulting company in 1983 and has practised in most of the world’s major mining centres. Mr Nealon was the founder of Aquarius Platinum Ltd (ASX: AQP) and is currently non- executive deputy chairman of Tanzanite One Ltd (AIM:TNZ) and non- executive director of Condoto Platinum NL (ASX: CPD).

38

Robert Hair (Managing Director)Qualifi cations: BA (Hons) Admitted as a Barrister of the Supreme Court of QueenslandMr Hair is by background a lawyer with over 22 years’ experience in the resources sector. He has held several roles in the large Australian multi-national resources group, MIM and other companies and has Australian and international experience in legal, commercial, fi nancial and organisational aspects of exploration, mining and processing operations. He has for some years provided consultancy services to companies in the resources and information technology sectors and is currently a non-executive director of Carpentaria Exploration Limited (ASX: CAP).

Klaus Borowski (Independent Non-executive Director)Qualifi cations: Metallurgical EngineerMr Borowski is a metallurgical engineer by background, having studied in his home country of Germany. He went to South Africa in 1966, where he was technical director of Dunsward Steel until 1979. After a short period in Europe within the steel industry, he returned to South Africa in 1982 and subsequently held several positions in the iron and steel industry in South Africa, including as managing director of Krupp South Africa and as executive director of Industrial Machinery Supplies Proprietary Limited. In 1991, Mr Borowski formed Applied Metallurgical Technologies Proprietary Limited, and amongst other things he was on the steering committee of Saldhana Steel Proprietary Limited. Mr Borowski is chairman of the remuneration committee of the company and is a member of the audit committee of the company.

Kofi Morna (Non-executive Director)Qualifi cations: BSc, MBAMr Morna holds a Master of Business Administration degree from the London Business School and a Bachelor of Science degree from Princeton University. He is a non-executive director of Aquarius Platinum Limited and is an executive director of Savannah Resources Proprietary Limited. He has a broad exposure to the iron ore industry in South Africa and is a director of Mkhombi, the company’s BEE partner. Mr Morna is a member of the nomination committee of the company.

Grant Michael Button ( Financial Director)Qualifi cations: CPAMr Button is a qualifi ed accountant and has signifi cant fi nancial and other commercial management and transactional experience. Mr Button has 19 years’ experience at a senior management level in the resources industry. He has acted as an executive director, managing director, fi nance director, chief fi nancial offi cer and company secretary of a range of publicly listed companies. He was a non-executive director of the Company when it listed on the ASX in November 2005 and continued in that role until his resignation in November 2008. He is currently the chief executive offi cer of Magnum Mining & Exploration Limited, an executive director of Sylvania Resources Limited and non-executive chairman of Realm Resources Limited. Mr Button is chairman of the audit committee and the nomination committee and is a member of the remuneration committee.

Theodore (Ted) Carl Droste (Independent Non-executive Director)Qualifi cations: BSc (Chem Eng)Mr Droste is a chemical engineer by background, and after obtaining a BSc in Chemical Engineering in 1962 he worked at African Metals Corporation Limited (now known as Samancor) before joining Sentrachem Limited where he was promoted to the position of research and development manager. After ten years with Sentrachem Limited, he joined the Industrial Development Corporation of South Africa (“IDC”) in 1974, in whose employ he remained until he took early retirement in 2001 to start his own business. Mr Droste held a number of positions at the IDC, including that of senior general manager- projects division. Mr Droste is chairman of Bay Precision and Mining Proprietary Limited. He consults to various companies through his investment holding company, TC Droste Investments Proprietary Limited. Mr Droste is a member of the audit committee, remuneration committee and nomination committee.

Kevin Scott Huntly (Strategic Development Manager)Qualifi cations: Mining EngineerMr Huntly, who is a mining engineer with over 31 years’ experience in the mining industry, principally within South Africa, is part of the company’s management team and is based in Johannesburg. He has extensive experience within government in South Africa and of working with several exploration and mining companies within the country (including Aquarius Platinum Limited and Sylvania Resources Limited), especially during the companies’ transition from exploration to development. He is an executive director of Batavia, Nelesco and TMT.

39

Ayanda Laura Ngubane ( Non-executive Director of TMT)

Qualifi cations: BA Communication Science

Ayanda is an executive manager at Mkhombi responsible for offi ce management and company secretarial work and has experience in the fi elds of bookkeeping, the generation of management accounts, coordination of mining projects and mineral rights applications and liaising with the DMR. She also acts as a public relations offi cer to Mkhombi. She is a non-executive director of TMT.

SENIOR MANAGEMENT

The details of the management of Ferrum Crescent are set out below:

Full name, age andnationality Business address Function in Ferrum Crescent group

Vernon Harvey (64) Palazzo Towers West Chief Operating Offi cerSouth African Montecasino Boulevard Fourways, 2055 South Africa

Beverley Gardner (49) Palazzo Towers West Financial ControllerSouth African Montecasino Boulevard Fourways, 2055 South Africa

Sandy Hill (52) Palazzo Towers West Administration Manager Montecasino Boulevard Fourways, 2055 South Africa

Andrew Nealon (27) Unit 2, Level 1 Company SecretaryAustralian Churchill Court 331 – 335 Hay Street Subiaco WA 6008 Australia

Lindsay Cahill (62) Unit 2, Level 1 Consultant GeologistAustralian Churchill Court 331 – 335 Hay Street Subiaco WA 6008 Australia

The profi les of the key members of the management team of the company are as follows:

Vernon Harvey (Chief Operating Offi cer)

Qualifi cations: B.Sc. Eng, M.Sc. Eng

Mr Harvey is a chemical engineer, who has extensive experience as a project manager in the South African resources industry. During his 46 year career Mr Harvey has worked for organisations including the Rio Tinto Group and the IDC. Mr Harvey has overseen feasibility studies on a series of major resources projects, including full infrastructure assessments, which has resulted in six fully commissioned operations.

Beverley (Bev) Gardner (Financial Controller)

Qualifi cations: BCom, ACIS, FCIBM

Mrs Gardner is a Fellow of the Chartered Institute of Business Managers, an Associate of the South African Institute of Chartered Secretaries and Administrators and a member of their Public Practice Group. She has 30 years’ experience in administration, fi nance and accounting and has worked in the banking, manufacturing, software, construction, agency and mining sectors. She has spent the past 11  years working for companies within the Rio Tinto Alcan Group (previously Alcan, previously Aluminium Pechiney), the aluminium division of Rio Tinto, in South Africa, on a full-time and consultancy basis. Mrs Gardner joined Ferrum Crescent in July 2011 to facilitate the company’s internal fi nancial, administrative and accounting controls.

40

Sandra (Sandy) Hill (Administration Manager)

Qualifi cations: BSc (Hons) (Analytical Chem)

Ms Hill has extensive experience in business and fi nance, both working in her own business and working for fi rms. She has been with the Ferrum group since the offi ce was established in South Africa and manages the administration of the company’s offi ce, as well as being a member of the company secretarial team for the group in South Africa.

Lindsay Cahill (Consultant Geologist)

Qualifi cations: BSc, Dip Ed

Mr Cahill is a geologist with more than 26 years’ experience in the minerals exploration and mining industry. A member of the Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists, he has undertaken and managed exploration and resource development programmes for a range of commodities in a wide variety of geological environments within Australia, southern Africa, Indonesia and Papua New Guinea. In addition, Mr Cahill was the senior resource geologist for Highlands Gold Limited, based in Port Moresby, and resource evaluation manager for the Bulong and Marlborough laterite nickel projects.

Mr Cahill has managed the company’s exploration programmes in South Africa and reviewed and planned exploration for several magnetite deposits in Australia. With extensive experience in resource studies, feasibility test work, commissioning and liaison with government and statutory bodies, Mr Cahill has an in-depth knowledge of sound environmental practices.

Andrew Nealon (Company Secretary)

Mr Nealon has over 6 years’ experience as a company secretary and fi nancial manager within publicly-listed companies. He has been a company secretary of the company since 2007 and assists the fi nancial controller and contracted accountants in the management of the company’s fi nancial systems.

11. DIRECTORS’ DECLARATIONS

None of the directors has:

• ever been convicted of an offence resulting from dishonesty, fraud or embezzlement;

• ever been put into liquidation or been placed under judicial management or had an administrator or other executor appointed during the period when the director was (or within the preceding 12 months had been) one of its directors, or alternate directors;

• ever been declared bankrupt or sequestrated in any jurisdiction;

• at any time been a party to a scheme of arrangement or made any other form of compromise with their creditors;

• ever been found guilty in disciplinary proceedings by an employer or regulatory body, due to dishonest activities;

• ever been involved in any receiverships, compulsory liquidations or creditors voluntary liquidations;

• ever been barred from entry into a profession or occupation;

• ever been convicted in any jurisdiction of any criminal offence or an offence under legislation relating to the Companies Act;

• been removed from an offi ce of trust, on the grounds of misconduct, involving dishonesty; or

• been given an order granted by court declaring the person delinquent or placing the person under probation in terms of section 162 of the Companies Act and/or section 47 of the Close Corporations Act, 1984 (Act No. 69 of 1984) or if the person was disqualifi ed by a court to act as a director in terms of section 219 of the Companies Act.

All the directors of Ferrum Crescent have submitted completed directors’ declarations in compliance with Schedule 21 of the Listings Requirements.

Details of directorships held by Ferrum Crescent directors in other companies during the past fi ve years are set out in Annexure 11 to this pre-listing statement.

41

12. DIRECTORS’ SERVICE CONTRACTS, REMUNERATION AND RESTRAINTS OF TRADE

The directors of Ferrum Crescent are remunerated with reference to the role that each director provides to the company. In addition to monthly fees that are paid to some of the directors as set out below, directors may receive cash bonuses on a discretionary basis and based on performance as the company may from time to time determine, and are entitled to participate in the company’s share plan and/or share option plan as set out in further detail in paragraph 13 below. There is a remuneration committee in place, which is responsible for reviewing and determining fees and bonuses that are paid to directors. Details of the service contracts of the executive and non-executive directors are set out in Annexure 12 to this pre-listing statement.

13. INCENTIVE SCHEMES AND OPTIONS

The directors believe that the success of the group will depend to a high degree upon the retention and future performance of the management team. The directors also recognise the importance of ensuring that all employees are well-motivated and identify closely with the success of the group in retaining key employees.

The company adopted a share plan and a share option plan at the annual general meeting of the company held on 30 November 2010. The issue price for shares under the share plan and the exercise price for options offered under the share option plan are at the discretion of the board, except that the price must not be less than the volume weighted average share price of the ordinary shares over the preceding ten  business days before the grant or issue.

As at the date of this document, the company has issued options over 24 446 727 ordinary shares, comprising 21 496 727 listed options, which are quoted on the ASX, and 2 950 000 options granted pursuant to the share option plan and has issued 6 445 000 employee shares under the share plan.

Details of the outstanding options over the share capital of the company are set out in paragraph 26 of  this document.

The share plan and share option plan are intended to align the interests of participants in the plans with shareholders, as well as to encourage share ownership of those involved in the management and operation of the company and facilitating the recruitment of personnel. It is proposed that ordinary shares may be issued and options may be granted to directors and employees of the group under these plans up to such number as would result in the number of ordinary shares issued or issuable pursuant to options granted under the share option plans (when aggregated with any ordinary shares that are the subject of  offers or invitations under any employee shares schemes and any shares issued during the previous fi ve years pursuant to employee share schemes) not exceeding 5% of the number of ordinary shares in  issue.

14. QUALIFICATION, REMUNERATION, BORROWING POWERS AND APPOINTMENT OF DIRECTORS

The relevant provisions of the constitutions or memoranda of incorporation of Ferrum Crescent and each of its subsidiaries concerning the qualifi cations, remuneration, borrowing powers and appointment of the directors are set out in Annexure 3 to this pre-listing statement.

The remuneration and benefi ts of the executive and non-executive directors of Ferrum Crescent for the year ended 30 June 2011 are set out below:

42

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43

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44

There will be no variation in the remuneration receivable by any of the directors of Ferrum Crescent as  a  consequence of the secondary listing of Ferrum Crescent on the JSE.

The directors’ borrowing powers have not been exceeded during the past three years. No Exchange Control or other restrictions exist in respect of the borrowing powers of the Ferrum Crescent group.

15. INTERESTS OF DIRECTORS

The benefi cial interests of the directors in the share capital of Ferrum Crescent at the last practicable date are indicated in the table below:

Benefi cial interests

% of total % of total Direct share capital Indirect share capital Total %

Executive directors

Edward Nealon 1 145 000 0.4 – – 0.4Robert Hair 2 255 900 0.8 2 409 410 0.8 1.6Kevin Scott Huntly1 – – 3 486 022 1.2 1.2Adrian Griffi n2 3 728 640 1.2 950 000 0.3 1.5

Non-executive directors

Kofi Morna – – – – –Klaus Borowski – – – – –Ted Droste – – – – –Grant Button 936 000 0.3 500 000 0.2 0.5

Total 8 065 540 2.7 7 345 432 2.5 5.2

Notes:

1. Mr Huntly resigned as Managing Director of Ferrum Crescent on 4 March 2011, but remains a director of Batavia, Nelesco and TMT.

2. Mr Griffi n resigned as a director of Ferrum Crescent on 1 September 2010.

No payment has been made to any director or proposed director since Ferrum Crescent’s incorporation as an inducement to become a director.

Save as disclosed in this pre-listing statement, none of the directors of the company have had any material interest, direct or indirect, in any transaction entered into by the company, which remain in any respect outstanding or unperformed.

Other than Mr Kofi Morna, who is a director of Mkhombi as detailed in paragraph 7 of this pre-listing statement, none of the directors of Ferrum Crescent has had any material benefi cial interest, direct or indirect, in the promotion of the company or in any property acquired or proposed to be acquired by the company or any other issue since incorporation and no amount has been paid during this period, or is proposed to be paid in this regard.

The competent person and any related party thereto has not, in the two years prior to the last practicable date owned directly or indirectly any asset of Ferrum Crescent or acquired, disposed, leased to from Ferrum Crescent including any interest in the consideration passing to or from Ferrum Crescent, or in the share capital of Ferrum Crescent.

16. MANAGEMENT OF THE BUSINESS OF THE FERRUM CRESCENT GROUP

The business of the Ferrum Crescent group is managed internally by its current management.

17. CORPORATE GOVERNANCE

The directors recognise the importance of maintaining sound corporate governance practices. The company is listed on the ASX, and is therefore subject to the Corporate Governance Principles and Recommendations with 2010 Amendments published by the ASX Corporate Governance Council (Second Edition) and as such reports on an annual basis (in its directors’ report) as to whether it complies

45

with those recommendations and, to the extent that it does not comply, why it does not comply. In addition the company is listed on AIM and complies with the QCA Guidelines, which are recommended for companies admitted to trading on AIM.

The company complies substantially with the recommendations as referred to above. If the company were reporting as at the date of this document, it would report that it does not comply with the recommendations in that the offi ce of Chairman is held by an executive of the company. The directors believe that at this stage of the company’s development, it is in the interests of the company that the role be an executive one.

Details of Ferrum Crescent’s corporate governance commitments are set out in Annexure 4 to this pre-listing statement.

46

PART D: FINANCIAL INFORMATION

18. EXTRACTS OF CONSOLIDATED HISTORICAL FINANCIAL INFORMATION OF FERRUM CRESCENT

Extracts of the consolidated historical fi nancial information of Ferrum Crescent for the two years ended 30 June 2010 and 2011 are attached as Annexure 5 to this pre-listing statement.

19. MATERIAL CAPITAL COMMITMENTS, LEASE PAYMENTS AND CONTINGENT LIABILITIES

The Ferrum Crescent group has the following material capital commitments, lease payments and contingent liabilities:

Material capital commitments

The company has certain obligations with respect to tenements and minimum expenditure requirements on areas, as follows:

2010 2011 A$ A$

Within one year 520 000 35 722Between one and two years 550 000 Nil

Total 1 070 000 35 722

The company disposed of its Australian tenements during the year and whilst the company still holds tenements in South Africa, expenditure commitments in relation to these tenements have been met. The company is in the process of converting its South African prospecting rights to mining licences and applying for new prospecting rights over adjacent land. Once these applications are complete, the company will be subject to new commitments in relation to mining and prospecting expenditure.

The company’s Australian commercial property sub-lease expired on 1 June 2011 and the company is currently negotiating the terms and conditions of its new lease premises. A subsidiary entered into a 12-month commercial offi ce lease on 1 April 2011 for the company’s head offi ce in Johannesburg, South Africa.

Contingent liabilities

The company has the following contingent liabilities:

In terms of the Ferrum subscription agreement AmaMato has the right to require the group to buy AmaMato’s shares in Mkhombi for ZAR 12.5 million within 60 days of the date on which one or more of the conditions precedent to the Ferrum subscription agreement (such conditions precedent being the granting of Ferrum Crescent shareholder approval to the Ferrum subscription agreement; the listing of the subscription shares and the granting of the mining right) are not met. 

Other than as set out above the company has no further contingent liabilities.

20. LOAN CAPITAL AND MATERIAL LOANS

There are no material loans payable by Ferrum Crescent and its subsidiaries at 30 October 2011.

The Ferrum Crescent group has no outstanding loan capital at the last practicable date.

No debentures have ever been issued by Ferrum Crescent or any of its subsidiaries.

There are no material loans receivable by Ferrum Crescent and its subsidiaries at 30 October 2011.

No loans have been made or security furnished to directors, associates or managers of Ferrum Crescent and its subsidiaries.

47

The inter-company loans of the Ferrum Crescent group at 30 June 2011 are set out as follows:

Loan funding to Batavia

As at the date hereof, Batavia had received aggregate loan funding from the company in the amount of A$3 820 051 which loan is unsecured and interest free with no fi xed terms of repayment (but by intent the loan is of a long-term nature).

Loan funding to Nelesco

As at the date hereof, Nelesco had received aggregate loan funding from:

(a) the company in the amount of A$16 372 306, which loan is unsecured and interest free with no fi xed terms of repayment (but by intent the loan is of a long -term nature). This loan has been subordinated by the company in favour of the remaining creditors of Nelesco until such time as the assets of Nelesco exceed its liabilities;

(b) Batavia in the amount of A$2 830 000 which loan is unsecured and interest free with no fi xed terms of repayment (but by intent the loan is of a long-term nature).

The Authorised Dealer of The Standard Bank of South Africa Limited and the Financial Surveillance Department of  the SARB have approved the abovementioned funding with respect to the Exchange Control Regulations promulgated pursuant to section 9 of the Currency and Exchanges Act, 1933.

Loan funding to TMT

As at the date hereof, TMT had received aggregate loan funding from Nelesco in the amount of ZAR401 005 which loan has been subordinated by Nelesco in favour of the remaining creditors of TMT until such time as the assets of TMT exceed its liabilities, and which loan is unsecured and interest free with no fi xed terms of repayment (but by intent the loans are of a long-term nature).

21. DIVIDENDS AND DIVIDEND POLICY

The board anticipates that, following the JSE listing, the group’s cash resources will be used for investment in the development of the group’s assets and will not be available for distribution until such time as the directors consider it has an appropriate level of distributable profi ts. The declaration and payment by the company of any dividends and the amount thereof will depend on the results of the group’s operations, its fi nancial position, anticipated cash requirements, prospects, profi ts available for distribution, and other factors deemed to be relevant at the time. As at the date of this document, the company has not declared any dividends.

Any dividend unclaimed after a period of three years from the date on which the same has been declared to be payable shall be forfeited and shall revert to the company.

There is no arrangement under which future dividends will be waived or have been agreed to be waived.

22. MATERIAL CHANGES

There have been no material changes in the fi nancial or trading position of Ferrum Crescent and its subsidiaries since 30 June 2011.

23. ADEQUACY OF WORKING CAPITAL

The directors are of the opinion that the working capital available to Ferrum Crescent and its subsidiaries is suffi cient for the group’s present requirements, that is, for at least the next 12 months from the date of issue of this pre-listing statement.

48

PART E: SHARE CAPITAL

24. AUTHORISED AND ISSUED SHARE CAPITAL

Ferrum Crescent’s authorised and issued share capital for the year ended 30 June 2011 is set out below:

A$

Authorised

Unlimited number of ordinary shares with no par value

Issued

298 691 705 ordinary shares with no par value 27 392 728

Ferrum Crescent does not have any shares held in treasury.

25. OPTIONS

No options will be listed on the JSE as part of the listing.

26. SHARE OPTIONS

The company has in issue as at the date of this document 21 496 727 listed options, which are exercisable at A$0.40 and due to expire on 31 December 2013. The options are quoted on the ASX.

Under the terms of the options:

26.1 exercise of the options is effected by the option holder completing an election in writing to exercise such options and delivering it together with the payment for the number of shares in respect of which the options are exercised to the registered offi ce of the company;

26.2 the option holder is required to exercise the options in order to participate in a bonus or entitlement issue of shares by the company;

26.3 if, prior to the expiry of an option, there is a reorganisation (including consolidation, subdivision, reduction or return) of the share capital of the company, the number of shares subject to the option and/or the exercise price will be adjusted in the manner required by the ASX Listing Rules;

26.4 all shares issued upon exercise of the options will, from the date they are issued, rank equally in all respects with the issued shares;

26.5 shares allotted and issued pursuant to the exercise of an option will be allotted within the time prescribed by the ASX Listing Rules and the company will apply for offi cial quotation of shares issued pursuant to the exercise of options in accordance with the ASX Listing Rules.

Prior to 21 July 2010 the company had in issue 101 616 729 options, but on 19 May 2010 the company announced to the ASX a proposal pursuant to which it would seek to reduce the number of options in issue. It was intended that this occur by way of an offer to be made by the company to each of the holders of  options to cancel those options in consideration for an issue of shares. The consideration offered was one share for every 10 options that were cancelled. The option cancellation offer was contained in a prospectus that was lodged with ASIC (and released to the ASX) on 4 June 2010 and was conditional upon shareholder approval which was obtained on 21 June 2010. On 21 July 2010 and 22  July  2010 the  company announced that the offer to option holders closed on 16 July 2010 with acceptances representing 80 120 002 options and that, as a result, the company would issue 8 012 005 new shares on that date.

49

The company has established the share and share option plans. The main terms of the plans provide an additional incentive to eligible persons (being directors and other offi cers, employees, contractors to and consultants of the company and its subsidiaries) to provide dedicated and ongoing commitment and effort to the group, and for the company to reward its directors and other offi cers, employees, contractors and consultants for their efforts.

On 30 November 2010, the company issued 2 950 000 options with an exercise price of 19.80 cents to employees as approved by the shareholders meeting held on 30 November 2010. There are no voting rights attached to the options and they may be exercised from 7 December 2011.

Shares issued pursuant to the exercise of the employee options will rank pari passu in all respects with the company’s existing shares.

Employee options may not be assigned and will not be listed for quotation on the ASX. However, the company will make application for the offi cial quotation of shares issued on the exercise of employee options to the ASX and to each other stock exchange on which shares are listed or to which the shares are admitted at the time.

There are requirements for the exercise price of employee options to be not less than the volume weighted average share price of the company’s shares over the preceding ten business days before the date of grant or issue. The company must take reasonable steps to ensure that the number of shares that are the subject of employee options, when aggregated with any shares that are the subject of offers or invitations under any employee share schemes and any shares issued during the previous fi ve years pursuant to employee shares schemes, does not exceed 5% of the total number of shares in  issue as  at  the time of the relevant offer (in accordance with the terms of the share option plan).

The following options were outstanding as at the last practicable date:

Expiration Number of Exercise date options price

Listed options 31 December 2013 21 496 727 A$0.40Employee share options 6 December 2013 2 950 000 A$0.198

Balance at 30 June 2011 24 446 727

27. ALTERATIONS TO SHARE CAPITAL

A summary of the sub-divisions and increases in Ferrum Crescent’s share capital that have occurred during the preceding three years is included in Annexure 6 to this pre-listing statement.

28. PREVIOUS OFFERS

A summary of issues of shares by Ferrum Crescent and its subsidiaries during the preceding three years is included in Annexure 6 to this pre-listing statement.

29. RIGHTS ATTACHING TO SHARES

In terms of the constitution of Ferrum Crescent, the board may from time to time allot or grant options to purchase the whole or any part of the authorised and unissued shares of the company at such times and to such persons and for such consideration as the board shall determine, provided that no share shall be issued until it is fully paid.

All of Ferrum Crescent’s authorised and issued ordinary shares are of the same class and rank pari passu in every respect. There are no preferential conversion or exchange rights attached to such shares.

Extracts from the constitution of Ferrum Crescent relating to the voting rights attaching to the shares are set out in Annexure 3 to this pre-listing statement.

Any variation of any right attaching to Ferrum Crescent’s shares will require the consent of 75% of Ferrum Crescent’s shareholders in general meeting.

Other than the Ferrum Crescent shares and options in issue, no other class of shares has been issued by Ferrum Crescent.

50

30. LISTING ON OTHER STOCK EXCHANGES

The Ferrum Crescent shares in issue are listed on the ASX and AIM and will be listed on the JSE in terms of this pre-listing statement. It is not intended at this stage to apply for a listing of the Ferrum Crescent shares on any other stock exchange.

31. MAJOR SHAREHOLDERS

The current major shareholders of Ferrum Crescent are as follows:

Number of Number of Percentage shares directly shares indirectly shareholding inName benefi cially held benefi cially held Ferrum Crescent

National Nominees Limited 24 527 954 – 8.2Goldman Sachs Securities (Nominees) Ltd 21 101 341 – 7.1

45 629 295 – 15.30

The shareholders disclosed above are, directly, benefi cially interested in 5% or more of the issued ordinary share capital of Ferrum Crescent at the last practicable date.

At the last practicable date, no further options or preferential rights are proposed to be given to any person  to  subscribe for any securities of the Ferrum Crescent group, other than those set out in paragraph 26 above.

Ferrum Crescent did not have a major shareholder on incorporation and still does not have a controlling shareholder.

No changes have occurred in the trading objects, being minerals exploration and development, of Ferrum Crescent or its subsidiaries during the previous fi ve years.

The companies in the Ferrum Crescent group do not carry on widely differing operations as all the Ferrum Crescent subsidiaries are involved in mining activities in the same geographic region, and a segmental statement has therefore not been presented.

51

PART F: PARTICULARS OF THE LISTING

32. EXCHANGE CONTROL REGULATIONS

Following successful application to the Financial Surveillance Department of the SARB, Ferrum Crescent has been granted approval to effect a secondary listing on the JSE.

Accordingly, upon the commencement of the listing of the shares of the Company on the JSE, the Exchange Control Regulations as set out below will apply to the purchase of Ferrum Crescent shares by South African residents.

The summary is intended as a guide only and is therefore not comprehensive. If you are in any doubt in this regard, you should consult an appropriate professional adviser before purchasing Ferrum Crescent shares.

South African individuals

South African individuals will be able to acquire Ferrum Crescent shares on the JSE, without restriction. Consequently, purchase of Ferrum Crescent shares by a South African individual will not affect such person’s offshore investment allowance of R4 million per calendar year.

South African institutional investors

South African retirement funds, long-term insurers, collective investment scheme management companies as well as investment managers who have registered with Exchange Control as “institutional investors” for Exchange Control purposes are entitled to a foreign portfolio investment allowance. They are required to utilise this allowance to make any investments in Ferrum Crescent.

South African corporate entities, partnerships and trusts

An acquisition of Ferrum Crescent shares on the JSE by a South African corporate entity, partnership or trust is allowed without restriction.

Non-residents of the Common Monetary Area

Non-residents of the Common Monetary Area may acquire Ferrum Crescent shares on the JSE, provided that payment is received in foreign currency or Rands from a non-resident account. However, former residents of the Common Monetary Area who have emigrated may use emigrant blocked funds to acquire Ferrum Crescent shares only if Exchange Control approval has been obtained.

33. STRATE

Ordinary shares may only be traded on the JSE in electronic form (dematerialised shares) and will be trading for electronic settlement in terms of Strate immediately following the listing.

Strate is a system of “paperless” transfer of securities. If you have any doubt as to the mechanics of Strate please consult your broker, CSDP or other appropriate adviser. You are also referred to the Strate website at www.strate.co.za for more information.

Some of the principal features of Strate are as follows:

• electronic records of ownership replace share certifi cates and physical delivery of certifi cates;

• trades executed on the JSE must be settled within fi ve business days;

• all investors owning dematerialised shares or wishing to trade their securities on the JSE are required to appoint either a broker or a CSDP to act on their behalf and to handle their settlement requirements; and

• unless investors owning dematerialised shares specifi cally request their CSDP to register them as an “own name” shareholder (which entails a fee), their CSDP’s or broker’s nominee company, holding shares on their behalf, will be the shareholder (member) of the relevant company and not the investor. Subject to the agreement between the investor and the CSDP or broker (or the CSDP’s or  broker’s nominee company), generally in terms of the rules of Strate, the investor is entitled to  instruct the CSDP or broker (or the CSDP’s or broker’s nominee company), as to how it wishes to exercise the rights attaching to the shares and/or to attend and vote at shareholders’ meetings.

52

34. LISTING ON THE JSE

Application has been approved by the JSE for the listing of the entire issued ordinary share capital of Ferrum Crescent on the JSE under the abbreviated name “Ferrum Crescent”, symbol “FCR” and ISIN AU000000WRL8 under the “Basic Materials – Basic Metals – Industrial Metals & Iron – Iron & Steel” sector of the Main Board. The listing is expected to be effective from the commencement of business on Friday, 11 November 2011.

53

PART G: GENERAL INFORMATION

35. SUBSIDIARY COMPANIES

Details of Ferrum Crescent’s subsidiaries are set out in Annexure 7 to this pre-listing statement.

36. PRINCIPAL PROPERTY OWNED OR LEASED

As at the last practicable date the company did not own or lease any immovable property, other than as disclosed in paragraph 19 of this pre-listing statement.

37. ACQUISITIONS AND DISPOSALS OF COMPANIES, BUSINESSES AND PROPERTIES

Details of the acquisitions of companies, businesses and properties by Ferrum Crescent during the past three years are set out in Annexure 8 to this pre-listing statement. Details of the BEE acquisition are set out in Annexure 9 to this pre-listing statement.

38. INTERESTS OF ADVISERS AND PROMOTERS

None of the advisers, as set out in the “Corporate Information” section of this pre-listing statement, hold  any shares in or have agreed to acquire any shares in Ferrum Crescent.

The Ferrum Crescent group has not paid any amount in cash or securities nor given any benefi t to any promoters or any partnership, syndicate or other association of which the promoter was a member, within the preceding three years.

39. GOVERNMENT PROTECTION

There is no Government protection or any investment encouragement law pertaining to any of the businesses operated by Ferrum Crescent or its subsidiaries.

40. ROYALTIES

No royalties have been paid to date.

41. MATERIAL CONTRACTS

At the last practicable date, the Ferrum Crescent group has during the past three years entered into the material contracts as set out in Annexure 9 to this pre-listing statement.

Ferrum Crescent has not entered into any promoter’s agreements since incorporation.

42. LITIGATION STATEMENT

The directors of Ferrum Crescent are not aware of any legal or arbitration proceedings (including any such proceedings that are pending or threatened), involving the group which may have, or have had, a material effect on the group’s fi nancial position during the last 12 months preceding the date of this pre-listing statement.

The directors of Ferrum Crescent are not aware of any legal proceedings (including any such proceedings that are pending or threatened), involving the group which may have an infl uence on the rights to explore or mine.

54

43. EXPENSES

The costs of the listing of Ferrum Crescent are estimated at approximately R3, 050 million, comprising:

Expense R’000

Corporate adviser and sponsor – Sasfi n 2 000 Attorneys – Falcon & Hume 250Competent person – ProMet 100Printing, publication and marketing costs 450 JSE listing fee 85JSE documentation fees 165

3 050

All amounts set out in the table above are exclusive of value-added taxation.

44. EXPERTS’ CONSENTS

ProMet and CRM, whose report is contained in this pre-listing statement, have given and have not, prior to publication, withdrawn their written consents to the inclusion of their report in the form and context in which it appears. Each of the corporate adviser and sponsor, attorneys, auditors and competent persons named in this pre-listing statement has consented in writing to act in those capacities as stated in this pre-listing statement and has not withdrawn its consent prior to the publication of this pre-listing statement.

45. COMMISSIONS PAID OR PAYABLE IN RESPECT OF UNDERWRITING

There are no commissions payable to any promoter or underwriter in respect of underwriting of any share issues or private placements of the company.

There are no other commissions, discounts, brokerages or other special terms granted during the three  years preceding the date of this prelisting statement in connection with the issue or sale of any securities, stock or debentures in the capital of the company.

46. DIRECTORS’ RESPONSIBILITY STATEMENT

With respect to the information provided in this pre-listing statement, the directors whose names are given in paragraph 10 of this pre-listing statement, certify that:

• collectively and individually, accept full responsibility for the accuracy of the information given;

• to the best of their knowledge and belief, there are no other facts that have been omitted which would make any statement false or misleading;

• all reasonable enquiries to ascertain such facts have been made;

• this pre-listing statement contains all information required by law and the Listings Requirements.

47. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the registered offi ces of Ferrum Crescent and Sasfi n in South Africa at any time during business hours on weekdays (offi cial public holidays in South Africa excluded) between Friday, 4 November 2011 until Friday, 1 8 November 2011:

• constitutions and/or memoranda of incorporation of Ferrum Crescent and each of its subsidiaries;

• the CPR on the Ferrum Crescent group;

• the report of consolidated historical fi nancial information of Ferrum Crescent;

• audited annual fi nancial statements for Ferrum Crescent for the three years ended 30 June 2011, 2010 and 2009;

• written consent of ProMet, to the publication of its report and references thereto in the form and context in which it is included in this pre-listing statement;

• written consents of the corporate adviser and sponsor, attorneys, reporting accountants and competent persons named in this pre-listing statement to act in those capacities;

• the prospecting rights relating to the Moonlight Iron Ore Project;

55

• material contracts referred to in Annexure 8 to this pre-listing statement;

• material contracts referred to in Annexure 9 to this pre-listing statement;

• copies of service agreements with directors;

• copies of the company’s share and share option plans; and

• this pre-listing statement signed by the directors of Ferrum Crescent.

Director and duly authorised agent by way of a resolution of the Ferrum Crescent board of directors

SIGNED AT FOURWAYS ON 20 OCTOBER 2011 BY MR ROBERT HAIR IN HIS CAPACITY AS A DIRECTOR OF FERRUM CRESCENT LIMITED AND ON BEHALF OF EACH OF THE OTHER DIRECTORS OF FERRUM CRESCENT LIMITED

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Report

C5465-RP-004 Rev 1

ProMet Engineers Pty Ltd ABN 50 115 687 057

File: Project Volcano CPR 15 November 2010

November 2010

FFEERRRRUUMM CCRREESSCCEENNTT LLIIMMIITTEEDD

TTUURRQQUUOOIISSEE MMOOOONNIIRROONN PPRROOJJEECCTT

CCOOMMPPEETTEENNTT PPEERRSSOONNSS’’ RREEPPOORRTT

Rev Date Description By Check App. P6 20/07/10 Section 13 & 14 revision EH DM EH P7 3/08/10 Minor modifications EH DM EH 0 17/08/10 Minor modifications EH DM/JD EH 1 2/11/010 Final product modified EH DM/JD EH

ANNEXURE 1

COMPETENT PERSONS’ REPORT

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ACKNOWLEDGEMENT AND DISCLAIMER

USE OF THIS REPORT

This report was prepared for Ferrum Crescent Limited (“Ferrum”) by Continental Resource Management Pty Ltd (“CRM”) and ProMet Engineers Pty Ltd ("ProMet").

The report is based in whole or in part on information and data provided to CRM and ProMet by Ferrum and/or third parties. Both CRM and ProMet represent that they exercised reasonable care in the preparation of this report and that the report complies with published industry standards for such reports, to the extent such published industry standards exist and are applicable. However, Ferrum agrees that neither CRM nor ProMet is responsible for confirming the accuracy of information and data supplied by third parties and that neither CRM nor ProMet attests to or assumes responsibility for the accuracy of such information or data

The recommendations and opinions contained in this report assume that unknown, unforeseeable, or unavoidable events, which may adversely affect the cost, progress, scheduling or ultimate success of the Project, will not occur.

Any discussion of legal issues contained in this report merely reflects technical analysis of either CRM or ProMet and does not constitute legal opinion or the advice of legal counsel.

Neither CRM nor ProMet makes any representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of those assumptions or that those statements will prove correct, or that the estimates or forecasts contained in this Report will be achieved

Except as may be expressly stated in writing, the use of this report or the information contained herein is at the user’s sole risk and Ferrum specifically agrees to release, defend, indemnify and hold CRM and ProMet, their affiliated companies, and their officers, directors, employees and agents harmless from any and all liability, damages, or losses of any type, including consequential and punitive damages, suffered by Ferrum or any third party, even if such damages or losses are contributed to or caused by the sole or concurrent fault or negligence (other than gross negligence) of CRM or ProMet, their affiliated companies, or their officers, directors, employees, or agents.

Both CRM and ProMet consent to the publication of this report by Ferrum for the purpose for which it was provided, provided any such publication includes this “Acknowledgement and Disclaimer”.

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EXECUTIVE SUMMARY

Ferrum Crescent Limited (“Ferrum”), through its 74% South African subsidiary, Turquoise Moon Trading 157 (Pty) Ltd (“TMT”), is the holder of a prospecting right over two separate areas of iron ore mineralisation, the “Moonlight Deposit” and the “De Loskop Prospect”, both located in the Limpopo Province of South Africa. Ferrum aims to carry out a magnetite iron ore business based on these mineralisations.

Ferrum has engaged Continental Resource Management Pty Ltd (“CRM”) and ProMet Engineers Pty Ltd (“ProMet”) to provide this Competent Persons’ Report (“the Report”) to support its AIM listing on the London Stock Exchange. CRM’s scope of work includes the Geology and Resource, Sections 3, 4 and 5, whilst ProMet’s scope of work includes ore processing, infrastructure and possible value adding secondary processing alternatives, Sections 7, 8 and 9, as well as compiling this report. As part of Ferrum’s evaluation of the Project, additional expert studies were also undertaken and the results of these studies are included in this report. The studies include:

• Mining Richard Flanagan Mining Consultancy Pty Ltd

• Water Supply Metago Environmental Engineers (Pty) Ltd

The Report’s focus is the initial development of the Moonlight Deposit, called the Moonlight Iron Project (the “Project”). The Moonlight Deposit is situated near a number of rail terminals that have rail access to Richards Bay and/or the port of Maputo in neighbouring Mozambique. The proposed minesite is within easy access to a highway and within five hours travel from a major international airport.

Given the proposed location of the mine areas relative to possible end-users, Ferrum has decided that pumping the magnetite concentrate to a nearby railhead for export and/or secondary processing would give an optimum basis for the Project.

The Moonlight Deposit’s iron mineralisation is within multiple banded iron formation (“BIF”) units. The BIFs have been recrystallised under high-grade metamorphic conditions to produce equigranular medium to coarse-grained magnetite-quartz rocks. Within the area of the deposit the BIFs are present over an east-west distance of 3 km and a north-south distance of 2 km. The BIF units vary from a few metres to 40 metres in thickness. In general, they have a flat to shallow dip and are subject to gentle cross-folding. The mineralisation reaches the surface in the south and central portions of the area.

Exploration at Moonlight commenced in 1981, when the South African Government owned, integrated steel manufacturer, ISCOR began exploration drilling. Between 1983 and 1986, ISCOR drilled 244 holes on the Farm Moonlight and in 2008, Ferrum drilled 20 vertical RC holes on the Farm Moonlight for a total of 2,087 m. The initial Ferrum holes were sited to twin a range of ISCOR drill-holes. During December 2009 and January 2010, Ferrum carried out a second RC drill program of 66 vertical holes for a total of 3,748 m. The program was designed to infill-drill areas of near surface mineralisation at sufficient density to enable the estimation of an Indicated Resource for the Project. Table 1 summarises drilling statistics by explorer and hole type.

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Table 1: Drilling Statistics by Explorer and Hole Type

Explorer Years Diamond RC Halco Holes M Holes m Holes m ISCOR 1983-86 78 12,154 24 3,169 142 6,783 Ferrum 2008 20 2,087 Ferrum 2009-10 66 3,748 TOTALS 78 12,154 110 9,004 142 6,783

CRM completed a resource estimate for the Moonlight Deposit and as at 26 October 2010 the total Resources are estimated at 300 Mt at 30% Fe, with a lower block cut-off of 15%, of which 79 Mt is a near surface partially oxidised zone. It is reported in accordance with the 2004 Edition of the JORC Code. Refer Table 2.

Table 2: Moonlight Deposit’s Resource Table

Resource Zone and Classification Tonnes Grade(Fe%)

Indicated Oxidised 34,000,000 30 Fresh 40,000,000 35

Total Indicated 74,000,000 33 Inferred

Oxidised 45,000,000 30 Fresh 180,000,000 29

Total Inferred 225,000,000 29 Total Oxidised 79,000,000 30 Total Fresh 220,000,000 30 TOTAL RESOURCES 300,000,000 30

Note: Totals may differ from sum of individual items due to rounding

This estimate represents a summary of Ferrum’s net attributable Resource status as set out in Appendix 1.

The estimate employed geostatistical Inverse Distance Squared modelling to produce ore block models (“OBMs”) of the mineralisation within the deposit. The ore blocks were constrained to wireframed bodies of BIF mineralisation. The magnetite grains within the BIF are partly altered to hematite within the oxidised zone and CRM has therefore reported the Resource in two zones, an upper Oxidised Zone and a lower Fresh Zone.

It is intended that the deposit will be mined by conventional open pit methods followed by crushing, grinding and magnetic separation to produce a suitable concentrate. A metallurgical testwork program has been conducted under ProMet’s supervision to provide initial estimates of the final grind size, grade, recovery and grinding characteristics of the concentrate from the Moonlight Deposit.

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Being located in a semi-arid province, water demand will be reduced in the process by filtration of the tailings to conserve and recirculate water and demand on external sources of water mitigated by measures such as harvesting run-off capture in and around the mine and use of mine dewatering as a ”first call” resource. In addition, alternative local water resources have been identified.

While there are no real fundamental decisions to be made with the mine plan and crushing and beneficiation processes, there are a number of possible final product forms, most including some form of secondary value-adding processes. These alternatives include:

• Magnetite concentrate:

for export as a pellet plant feed or sinter plant feed; or

within South Africa as a sinter feed blend.

• Pellets

using the project’s concentrate;

using a blended mix of concentrate and South African sourced hematite fines.

• Merchant pig iron or granulated iron.

• Semi-finished steel products.

For transport requirements, the Project is serviced by South Africa’s mature road and rail transport network. There is access to a sealed national highway within 10 km and rail within 170 km of the Project. The local rail authority, Transnet, has committed substantial investment over the near term to upgrade and maintain the rail network and rolling stock.

In addition, the governments of Botswana and Mozambique signed a Memorandum of Understanding to develop a deep water port at Techobanine Point, south of Maputo, and connect it to Botswana Railway’s network. This means that there could be an alternative rail access approximately 128 km to the east that would overcome the congestion problems of railways and ports in South Africa.

With respect to the other assets of Ferrum:

• The De Loskop Prospect: There is no record of any exploration for iron ore within Ferrum’s tenement and hence no Mineral Resource can be reported. However, the BIF unit was drilled along strike to the east of the tenement by ISCOR, which reported an in situ grade of 37.8% Fe.

• Australian exploration tenements: Ferrum has entered into an agreement whereby its Australian tenements, which are considered by Ferrum to be non-core assets, are to be sold.

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CONTENTS

ACKNOWLEDGEMENT AND DISCLAIMER: USE OF THIS REPORT EXECUTIVE SUMMARY 1. INTRODUCTION ................................................................................................... 1

1.1 General ........................................................................................................ 11.2 Sources of Data ........................................................................................... 21.3 Description of the Resources and Project .................................................... 3

1.3.1 Resources ........................................................................................ 31.3.2 Project Outline .................................................................................. 3

2. OVERVIEW OF THE ASSETS, REGION AND LOCATION .................................. 62.1 Assets .......................................................................................................... 6

2.1.1 Tenements........................................................................................ 62.1.2 Other Assets ..................................................................................... 6

2.2 Physical ........................................................................................................ 82.3 Environment ................................................................................................. 82.4 Regional Setting ........................................................................................... 92.5 Existing Infrastructure ................................................................................ 10

2.5.1 Transport ........................................................................................ 102.5.2 Power ............................................................................................. 122.5.3 Water .............................................................................................. 12

3. GEOLOGY - MOONLIGHT ................................................................................. 133.1 Regional Geological Section ...................................................................... 133.2 Local Geological Setting ............................................................................ 133.3 Mineralisation ............................................................................................. 173.4 Exploration History ..................................................................................... 19

3.4.1 ISCOR 1981-1997 .......................................................................... 193.4.2 Ferrum 2008 ................................................................................... 213.4.3 Ferrum 2009-10 .............................................................................. 233.4.4 Drilling Summary ............................................................................ 23

4. MINERAL RESOURCES - MOONLIGHT ............................................................ 254.1 Resource Estimation Methodology ............................................................ 254.2 Mineral Resources ..................................................................................... 254.3 Conversion of Mineral Resources to Mineral Reserves ............................. 26

5. DE LOSKOP ........................................................................................................ 275.1 Geology and Mineralisation ........................................................................ 275.2 Previous Exploration .................................................................................. 285.3 Exploration Target ...................................................................................... 28

6. MINING ............................................................................................................... 296.1 General ...................................................................................................... 296.2 Mining to Maximise the Use of the Oxidised Zone ..................................... 29

7. ORE PROCESSING ............................................................................................ 317.1 Overview .................................................................................................... 317.2 Initial Testwork ........................................................................................... 317.3 Additional Testwork .................................................................................... 327.4 Design Basis .............................................................................................. 337.5 Process Description ................................................................................... 35

7.5.1 Primary Crushing and Stockpiling .................................................. 35

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7.5.2 Primary Grinding ............................................................................. 357.5.3 Rougher Magnetic Separation (“RMS”) .......................................... 357.5.4 Secondary Grinding ........................................................................ 357.5.5 Cleaner Magnetic Separation (“CMS”) ........................................... 357.5.6 Concentrate Handling and Filtering ................................................ 367.5.7 Tailings Dewatering and Thickening ............................................... 36

8. SITE INFRASTRUCTURE................................................................................... 378.1 Site Access ................................................................................................ 378.2 Power Generation and Reticulation ........................................................... 378.3 Water Supply .............................................................................................. 378.4 Fuel Unloading and Storage Facility .......................................................... 418.5 Offices, Workshops, Lunch Rooms, etc ..................................................... 418.6 Accommodation ......................................................................................... 41

9. FINAL PRODUCT ............................................................................................... 429.1 Alternatives ................................................................................................ 429.2 Concentrate................................................................................................ 439.3 Pellets ........................................................................................................ 449.4 Blended Iron Ore Pellets ............................................................................ 459.5 Merchant Pig Iron ....................................................................................... 459.6 Semi-Finished Products ............................................................................. 46

10. EXPORT LOGISTICS ......................................................................................... 4710.1 Mine to Port ................................................................................................ 4710.2 Ports 48

10.2.1 Maputo............................................................................................ 4810.2.2 Richards Bay .................................................................................. 5010.2.3 Techobanine Point .......................................................................... 51

11. IMPLEMENTATION ............................................................................................ 5211.1 Studies and Construction ........................................................................... 5211.2 Operations.................................................................................................. 53

11.2.1 General ........................................................................................... 5311.2.2 Workforce Organisation .................................................................. 5411.2.3 Outsourcing .................................................................................... 55

12. DISCUSSION ...................................................................................................... 5612.1 Main Drivers ............................................................................................... 56

12.1.1 Final Product/Secondary Processing ............................................. 5612.1.2 Transport ........................................................................................ 5612.1.3 Ore Quality ..................................................................................... 5712.1.4 Water and Gas Supply ................................................................... 57

12.2 Location ...................................................................................................... 5712.3 Up-side Potential ........................................................................................ 57

13. CONCLUSION .................................................................................................... 58

14. QUALIFICATION AND BASIS OF OPINION ....................................................... 6014.1 Overview .................................................................................................... 6014.2 J. J. G. (John) Doepel ................................................................................ 6114.3 Derek Macauley ......................................................................................... 62

15. GLOSSARY ......................................................................................................... 63

16. REFERENCES .................................................................................................... 68

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APPENDICES

1. Summary of Reserves and Resources by Status 2. Moonlight Mining Right Application Acceptance

LIST OF TABLES

Table 3.1: QEMSCAN Results of Composite Samples of Mineralisation .................... 19Table 3.2: Analyses of Magnetic Concentrates of Mineralisation ................................ 20Table 3.3: Significant Intersections from ISCOR Drilling Programs ............................. 21Table 3.4: Drilling Statistics by Explorer and Hole Type .............................................. 24Table 4.1: Resource Table .......................................................................................... 25Table 7.1: Summary Davis Tube Results .................................................................... 32Table 7.2: Feed and Product Design Grades .............................................................. 33Table 10.1: Rail Distances to Port ............................................................................... 47Table 10.2: Maputo Port Berth Statistics ..................................................................... 49Table 11.1: Milestone Table ........................................................................................ 52Table 11.2: Personnel Numbers .................................................................................. 54Table 13.1: Resource Table ........................................................................................ 58

LIST OF FIGURES

Figure 1.1: Map of Limpopo Province ............................................................................ 1Figure 1.2: Preliminary Facility Layout ........................................................................... 5Figure 2.1: Tenement Locations on Regional Map ........................................................ 7Figure 2.2: Moonlight Deposit Locality Map ................................................................... 9Figure 2.3: South African (Transnet’s) Major Rail and Port Network ........................... 11Figure 3.1: Regional Geological Setting ...................................................................... 13Figure 3.2: Moonlight Deposit – Geological Setting ..................................................... 14Figure 3.3: Moonlight Deposit - Geological and Drill-hole Map ................................... 15Figure 3.4: Moonlight Deposit - North-South Section – Looking West ........................ 15Figure 3.5: Moonlight Deposit - East-West Section – Looking North ........................... 16Figure 3.6: South-Western Mineralisation - North-South Section - Looking West ....... 16Figure 3.7: BIF Outcrop on Road within Moonlight Deposit ......................................... 17Figure 3.8: Oxidised Mineralisation (34 – 39m in FCL007: 5m @ 37.0% Fe) ............. 18Figure 3.9: Fresh Mineralisation (94 – 100m in FCL001: 6m @ 30.1% Fe) ................ 18Figure 3.10: Cross-section along -79 700mE – Showing Twinned Near Surface Oxidised Mineralisation ................................................................................................. 22Figure 3.11: Cross-section Along -79 300mE – Showing Twinned Deeper Fresh Mineralisation................................................................................................................ 23Figure 4.1: Plan of OBM Footprint ............................................................................... 26Figure 5.1 De Loskop – Geological Map ..................................................................... 27Figure 6.1: Pit Optimisation Shell – Oxidised Zone ..................................................... 30Figure 6.2: Pit and Waste Dump Footprint – Oxidised Zone ...................................... 30Figure 7.1: Tails Rejection Curve ................................................................................ 33Figure 7.2: Ore Processing (Magnetite Concentrator) Flow Diagram .......................... 34Figure 8.1: Possible Water Sources - Regional ........................................................... 39Figure 8.2: Possible Water Sources – MCWAP/ORWROP ......................................... 40

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Figure 8.3: Possible Water Sources – Water Harvesting ............................................ 40Figure 9.1: Potential Market/Export Location Map ....................................................... 43Figure 9.2: Schematic Flow Diagram - Grate-Kiln Pellet Process ............................... 44Figure 9.3: Schematic Flow Diagram of Rotary Hearth Technology ............................ 46Figure 10.1: Maputo Port Cargo and Bulk Terminals, Mozambique ............................ 49Figure 10.2: Port of Richards Bay, South Africa .......................................................... 50Figure 11.1: Indicative Implementation Schedule ........................................................ 53

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1. INTRODUCTION

1.1 General Ferrum Crescent Limited (“Ferrum”) has retained Continental Resource Management Pty Ltd (“CRM”) and ProMet Engineers Pty Ltd (“ProMet”) to prepare this Competent Persons’ Report for its primary asset, the Turquoise Moon Iron Project. The Turquoise Moon Iron Project is targeting the production of a magnetite based final product from the iron mineralisations to be mined in the Limpopo Province of South Africa.

Ferrum, the listed parent of Turquoise Moon Trading 157 (Pty) Ltd (“TMT”), holds a 74% interest in TMT through Nelesco 684 (Pty) Ltd, Ferrum’s wholly owned South African subsidiary.

TMT is the holder of a prospecting right over the Turquoise Moon Iron Project which comprises two separate iron ore mineralisations, “Moonlight” (145 km NW of Polokwane) and “De Loskop” (50 km NNW of Polokwane). Refer Figure 1.1.

Figure 1.1: Map of Limpopo Province

The Moonlight Deposit has been subjected to a number of drilling programs, whereas Ferrum’s portion of the De Loskop Banded Iron Formation (“BIF”) has not been drilled to date. Therefore the Moonlight Deposit has been chosen by Ferrum as the first mine to be developed and this initial development is called the Moonlight Iron Project (the “Project”).

Moonlight De Loskop

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Ferrum also has decided to develop the Project based on pumping the magnetite concentrate to a nearby railhead or mine and where “value adding” secondary processing would be carried out.

This report outlines the geology and resource/exploration target for both mineralisations and the mining, mineral processing and potential secondary processing alternative with their associated infrastructure.

1.2 Sources of Data CRM is primarily responsible for Sections 3, 4 and 5 of this report and has:

• been provided with digital files of the ISCOR drilling collar, assay, and geological logging files;

• been provided with digital copies of the Ferrum drill database;

• obtained original laboratory assay files from Intertek Testing Services, Jakarta for the Ferrum drilling;

• obtained copies of historical geological reports; and

• been provided with digital photographic images of Ferrum reverse circulation (“RC”) chip trays.

In addition, John Doepel, Principal Geologist of CRM, visited the Moonlight Deposit during Ferrum’s drilling programs in April 2008 and in December 2009.

ProMet is primarily responsible for Sections 7 through 9 as well as compiling the report, which included the Executive Summary and the remaining sections of this report. ProMet has:

• been provided by Ferrum with:

an AutoCAD drawing with the outline of the lease boundaries;

reports and Excel spreadsheets of laboratory testwork results;

reports/figures relating to the work undertaken by their sub-consultants, refer additional studies below; and

its list of Australian tenements and shares and their forward plans associated with these assets.

• obtained copies of regional and local information from the web.

Otherwise, ProMet has used its internal database for the process plant and secondary processing alternatives, etc. In addition, representatives of its South African office visited the Moonlight site in 2008 to view available local infrastructure.

As part of Ferrum’s evaluation of the Project, additional studies were also undertaken and the results of these studies are included in this report. The studies include:

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• Mining Richard Flanagan Mining Consultancy Pty Ltd

• Water Supply Metago Environmental Engineers (Pty) Ltd

Both CRM and ProMet accept responsibility for this report for the purposes of the AIM Rules. Having taken all reasonable care to ensure that such is the case, the information contained in this report is to the best of our knowledge in accordance with the facts and contains no omission likely to affect its import.

1.3 Description of the Resources and Project 1.3.1 Resources

The prospecting right covers two known BIF mineralisations:

• The Moonlight Deposit

• The De Loskop Prospect.

The deposits are located approximately 145 km north-west of Polokwane and 50 km north of Polokwane respectively, refer Figure 1.1.

The minerals to be mined consist of iron oxides derived from Archaean BIFs. At depth, the fresh mineralisation consists of magnetite. Closer to the surface the magnetite grains are partly oxidised to hematite, with, in simplistic terms, a hematite rim being formed around a remnant magnetite core.

The mineralisation style is similar at Moonlight and De Loskop.

1.3.2 Project Outline

The proposed Project, excluding secondary processing, will comprise the following:

• Mine

Mining operations – on a contract mining basis.

• Ore Processing Plant

Primary crushing

Magnetite ore beneficiation plant

Concentrate storage tanks

Tailings disposal.

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• Export Infrastructure

Pumping station(s)

Overland slurry pipeline

Concentrate storage tanks

Filtration plant

Filtered concentrate storage

Rail/port transfer, storage and handling facilities.

• External Infrastructure

Accommodation village and housing

Power plant

Fuel farm.

Water supply.

The preliminary layout of the proposed ore processing facility is shown in Figure 1.2.

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2. OVERVIEW OF THE ASSETS, REGION AND LOCATION

2.1 Assets 2.1.1 Tenements

TMT is the holder of new order Prospecting Right (“PR”) 210/2006, registered as 34/2008PR, in the Administrative District of Polokwane, granted on 9 March 2006 for a period of three years and renewed from 8 March 2009 for a further three years. Refer Figure 2.1. Nelesco 684 (Pty) Limited, a wholly owned subsidiary of Ferrum, has a controlling 74% interest in TMT.

The Moonlight section has a combined area of ~53 km2 and comprises three farms:

• The Remaining Extent of the Farm Moonlight 111LR

• Gouda Fontein 76LR, Portions 2 and 3

• Julietta 112LR.

Ferrum’s net attributable reserve and resource status is detailed in Appendix 1.

The De Loskop section has a combined area of ~120 km2 and consists of the:

• The Farms Lekkerlach 206LS, Zandput 202LS, Van Wijks Put 201LS, Westheim 191LS and Trieste 192LS;

• Remaining Extent and Portion 1 of the Farm Soho 204LS;

• Remaining Extent of the Farm and Remaining Extent of Portions 1,2 and 3, Portions 4 - 8 of Meanderthal 188LS; and

• Remaining Extent and Portions 1 and 2 of Persie 200LS.

An application for a mining right pertaining to iron and manganese ore, nickel, marble and limestone, over the same ground, has been submitted, and the application formally accepted by the Department of Mineral Resources and the Department of Energy on 25 June 2010. Refer Appendix 2.

2.1.2 Other Assets

Ferrum has entered into an agreement whereby its Australian tenements, which are considered by Ferrum to be non-core assets, are to be sold.

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Figure 2.1: Tenement Locations on Regional Map

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2.2 Physical

The Moonlight Deposit is located at approximately 23°15’S and 28°15’E and is ~900 m above sea level.

Road access to the deposit is via 8 km unsealed road to Marnitz, which is located 155 km by sealed road from Mokopane, formerly Potgietersrus, along national highway N11. This highway is one of the main roads to Botswana and carries moderate volumes of heavy vehicle traffic. Refer Figure 1.1. Mokopane is some 250 km from Johannesburg.

Access from Marnitz is by a good unsealed secondary road and then, within the tenement, by farm tracks. The district is comprised of farms, which are primarily used as grazing land for cattle and game. Most of the deposit is covered by uncleared bush. The road from Marnitz runs south through the deposit. Refer Figure 2.2.

The nearest regional airport with regular air services is Gateway International, located at Polokwane (formerly Pietersburg), approximately 170 km or 2 hours drive away. Currently, South African Airlines flies to and from Polokwane from Johannesburg four times a day using a J41 passenger jet that has a carrying capacity of 29 people. The air time from Johannesburg or Tambo International Airport to Polokwane is approximately 45 minutes.

2.3 Environment The region’s climatic type is classified as “Lowveld semi-arid”. Most rainfall occurs during the summer with temperatures in the low 30s (°C). In the winter, it is cold at night with temperatures less than 10°C. Average rainfall is 435 mm and winds are predominantly from the east all year round.

The Project area’s terrain is “fairly” flat with undulations, rocky outcrops and occasional hills. Vegetation is consistent with typical “Limpopo province Bushveld scrub” or low level thorny scrub veldt.

Livestock farming is the predominant activity in the Project area.

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Figure 2.2: Moonlight Deposit Locality Map

2.4 Regional Setting The following description was obtained from the Limpopo provincial government web site.

“Limpopo is the natural resource treasure chest of South Africa, if not the whole of southern Africa. It boasts some of the greatest reserves of agriculture, mineral and tourism resources many of which remain hugely

Moonlight Farm Boundary

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under-exploited. The province is also linked to the Maputo Development Corridor through Phalaborwa Spatial Development Initiative, a network of road and rail corridors connecting to the major seaports that will open up Limpopo and surrounding regions for trade and investment. This is complimented by the presence of airports in major centres of the province including Lephalale (formerly Ellisras), Makhado, Musina, Phalaborwa, Mokopane, Thabazimbi, Tzaneen, Thohoyandou and Bela-Bela as well as the Gateway International airport in Polokwane.

A unique feature of this province is that it shares international borders with three countries: Botswana to the west and north-west, Zimbabwe to the north, and Mozambique to the east. Limpopo is the link between South Africa and countries further afield in sub-Saharan Africa. On its southern flank, the province shares borders with Gauteng, with its Johannesburg-Pretoria axis, the most industrious metropole on the continent. The port of Durban, Africa’s busiest, is served directly by the province, as are the ports of Richards Bay and Maputo.

Thus the province is placed at the centre of the vortex of developing markets, regional, national and international.

In terms of agriculture, Limpopo could be described as the garden of South Africa and or the whole continent, given its rich fruit and vegetable production. The province produces 75% of the country’s mangoes, 65% of its papaya, 36% of its tea, 25% of its citrus, bananas, and litchis, 60% of its avocados, two thirds of its tomatoes, 285,000 tons of potatoes. Other products include coffee, nuts, guavas, sisal, cotton and tobacco, timber with more than 170 plantations. Apart from all these, there is cotton, sunflower, maize, wheat cultivation as well as grape. Most of the higher lying areas are devoted to cattle and game ranching, earning a reputation for quality biltong, a popular South African delicacy of salted, dried meat.

Limpopo is also endowed with the abundance of its mineral resources, locating mining as the critical sector of the economy in the Province, which contributes 22% of the GDP. The platinum group include platinum itself, chromium, nickel, cobalt, vanadium, tin, limestone and uranium clay. Other reserves include antinomy, phosphates, fluorspar, gold, diamonds, copper, emeralds, scheelites, magnetite, vermiculite, silicon, mica, black granite, corundum, feldspar and salt.”

2.5 Existing Infrastructure 2.5.1 Transport

The nearest towns with access to Transnet’s national freight rail network and hence export facilities are Polokwane and Mokopane, 145 km SE or Lephalale, 75 km SW of the site. Refer Figure 1.1. Thus the Project is situated a combined 715 km by road and rail from the port of Maputo and 912 km from the port of Richards Bay. Refer also to the map of the South African major rail and port network in Figure 2.3.

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Figure 2.3: South African (Transnet’s) Major Rail and Port Network

Generally, the national rail network is “narrow” gauge @ 1,067 mm with 20 t to 22.5 t axle loads but some designated bulk commodity routes, e.g. iron ore or coal are “standard” gauge @ 1,435 mm with 30 t axle loads.

The Waterberg coal field, near Lephalale, with its 75.7 billion tonnes of in-situ inferred resources, is expected to be a major future coal source for South Africa. The field’s Grootegeluk Coal Mine currently feeds approximately 13 Mt/a to the Matimba Power Station and expansion plans include more coal for an expanded power station, coal for export, char, coke, coal liquefaction, activated carbon and coal-bed methane. As part of the expansion plans it is recognised that the capacity of the current rail link would need to be upgraded or supplemented by a new rail link via Polokwane.

In addition, the Botswana and Mozambique governments, in July 2010, signed a Memorandum Of Understanding to develop a deep water port at Techobanine Point, south of Maputo and connect it with a new 1,100 km narrow gauge railway line to Botswana Railway’s Francistown container terminal via Zimbabwe. This means that there would be an alternative rail access utilising the existing Botswana railway system ~128 km to the east.

MoonlightDe Loskop

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2.5.2 Power

Eskom is the sole provider of grid power in the Project area. It operates a major power station, Matimba Power Station, with an installed capacity of 3,990 MW, just outside Lephalale. Matimba is the largest direct dry cooling power station in the world, an innovation necessitated by the shortage of large quantities water in the area. Adjacent to the Matimba Power Station is the Medupi Power Station which is under construction and will have 4,800 MW of installed capacity.

Whilst the Project area is serviced by a 132 kV network, it is assumed that there is insufficient capacity in the network/transmission lines to supply a Project of this scale.

Note there is also a 400 kV transmission line ~35 km to the south of the Project area linking Polokwane to the Matimba Power Station and with the commissioning of the Medupi power station this line is planned to be upgraded some time in the future.

2.5.3 Water

At present water in the Project area is limited to water wells and is controlled by the local Water Allocations Committee and the Department of Water and Environmental Affairs.

The Lephalala River, 22 km west of the mine, and Limpopo River, 30 km to the north west of the deposit, are possible sources of water. These rivers are already tapped for farming irrigation and are only reliable for three to five months of the year. Other less significant rivers in the area are considered to be unreliable as a water source.

In addition, there are two existing water augmentation schemes that could possibly be considered as water sources. They are the:

• Mokolo Crocodile Water Augmentation Project.

• Olifants River Water Resource Development Project.

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3. GEOLOGY - MOONLIGHT

3.1 Regional Geological Section The Moonlight Deposit is situated within the Archaean Limpopo Mobile Belt (“LMB”), which lies between the greenstone and granite terrains of the Kaapvaal and Zimbabwe Cratons, refer Figure 3.1.

Note: After du Plessis et al

Figure 3.1: Regional Geological Setting

The LMB is subdivided into three domains, termed the Central Zone, the Southern Marginal Zone, and the Northern Marginal Zone. The borders between these zones, as well as the borders between the LMB and the Kaapvaal and Zimbabwe Cratons, are prominent fault zones. Each zone is distinct in its dominant rock type and structural history, although all are characterised by high-grade metamorphism.

3.2 Local Geological Setting The Moonlight Deposit is located in the Central Zone of the LMB, within which the major rock types are gneiss, granulite, quartzite, marble, and metamorphosed banded iron formation of the Beit Bridge Complex. The iron mineralisation is within multiple BIF units of the Mount Dowe Group, the oldest group of the Beit Bridge Complex, refer Figure 3.2.

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Note: After G.S.S.A. 1:250,000 Map

Figure 3.2: Moonlight Deposit – Geological Setting

The BIFs have been recrystallised under high-grade metamorphic conditions to produce equigranular medium to coarse-grained magnetite-quartz rocks. Within the Farm Moonlight they are present over an east-west distance of 3 km and a north-south distance of 2 km (refer Figure 3.3). The BIF units vary from a few metres to 40 m in thickness. In general, they have a flat to shallow dip to the north, although the dip in the north of the deposit is to the northeast. The deepest drill intersection of mineralisation, which has a grade of 30.1% Fe, is at the northern end of the deposit, within MT034B from a depth of 449 m to 454 m (refer Figure 3.4). The stratigraphy is subject to gentle cross-folding (refer Figure 3.5). The OBM blocks shown in Figures 3.3 to 3.5 fill wireframes constructed around individual BIF units.

The mineralisation reaches the surface in the south and central portions of the area and is interpreted to be bounded in part by faults (Figure 3.3). The mineralisation in the southwest, to the west of the curved northwest trending fault, is comprised of two sub-horizontal units, the larger, thicker, and laterally more consistent of which is exposed along a low ridge. Figure 3.6 is a north-south section through the south-western mineralisation.

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Figure 3.3: Moonlight Deposit - Geological and Drill-hole Map

Figure 3.4: Moonlight Deposit - North-South Section – Looking West

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Figure 3.5: Moonlight Deposit - East-West Section – Looking North

Figure 3.6: South-Western Mineralisation - North-South Section - Looking West

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Associated interbedded lithologies include major gneiss, and granulite, with minor calc-silicates, marble, and quartzite. Intrusive lithologies are serpentinite, pegmatite, granite and dolerite. Serpentinite bands are present within some BIF units in the southeast.

Outcrop in the area is poor, with the basement rocks largely obscured by Tertiary colluvium that has an average thickness of ~3 m. Small, scattered areas of BIF outcrop on subdued rounded ridges that rise only a few metres above the plain. Refer Figure 3.7. The depth of oxidation is between 50 m and 65 m below surface. Within the oxidised zone the BIF is weathered to a hematite-quartz-magnetite rock and it retains coherence and strength. The other lithologies, however, do not and are converted, at least in part, to saprolitic clays.

Figure 3.7: BIF Outcrop on Road within Moonlight Deposit

3.3 Mineralisation The BIF units comprise the iron ore mineralisation. The magnetite grains within the BIF are partly altered to hematite within the oxidised zone and CRM has therefore reported the Moonlight Resources in two zones, an upper Oxidised Zone and a lower Fresh Zone. Figure 3.8 and Figure 3.9 are of chip trays containing intervals of oxidised and fresh mineralisation. Clear boundaries can be seen between the mineralisation and the non-mineralised lithologies.

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Figure 3.8: Oxidised Mineralisation (34 – 39m in FCL007: 5m @ 37.0% Fe)

Figure 3.9: Fresh Mineralisation (94 – 100m in FCL001: 6m @ 30.1% Fe)

Ferrum submitted a sample of oxidised mineralisation and a sample of fresh mineralisation, composited from RC drill chips from its 2008 drilling, to AMMTEC Ltd for mineralogical determination by Quantitative Automated Mineralogical Analysis (“QEMSCAN”). A split of the oxidised sample had a grade of 37.4% Fe and of the fresh 35.1% Fe. A summary of the results is shown in Table 3.1.

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Table 3.1: QEMSCAN Results of Composite Samples of Mineralisation

Mineral Oxidised (Mass %)

Oxidised- Average grain size

(μm)

Fresh (Mass %)

Fresh - Average grain size

(μm) Magnetite 14.4 59 37.4 105 Hematite 39.5 110 2.7 49 Goethite 0.1 29 0.1 21 Quartz 42.5 232 42 198 Feldspar 1.4 155 4.9 165 Smectites / Talc 1.5 56 4.6 104 Amphibole 0.6 74 3.9 114 Other 0.1 1.4

Within the Oxidised Zone, the magnetite grains are partly oxidised to hematite, with, in simplistic terms, a hematite rim being formed around a remnant magnetite core.

Analyses of magnetic concentrates produced from the composites at various grind sizes are summarised in Table 3.2. The results indicate the approximate iron grades and levels of contaminants that could be expected if magnetic concentration was carried out on the mineralisation.

3.4 Exploration History 3.4.1 ISCOR 1981-1997

Exploration at Moonlight commenced in 1981, when the South African Government owned, integrated steel manufacturer, ISCOR evaluated the economic potential of a number of relatively low-grade, but favourably located, iron ore deposits, despite having a large high-grade reserve at its flagship Sishen mine and smaller high-grade reserves at Thabazimbi.

Between 1983 and 1986, ISCOR drilled 244 holes on the Farm Moonlight in the vicinity of the mineralisation, for a total of 12,154 m of diamond core drilling and 9,951 m of percussion drilling. The holes, all of which were vertical, comprised:

• 78 Diamond core holes – the MT series; 21 m to 475 m in depth (average 161 m)

• 24 RC drill holes – the MTL series; 55 m to 208 m in depth (average 132 m)

• 142 Halco Wagon drill holes - the MTH series; 10 m to 50 m in depth (average 48 m).

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Table 3.2: Analyses of Magnetic Concentrates of Mineralisation

Zone Grind Size (μm)

Fe (%)

SiO2

(%) Al2O3

(%) P

(%) S

(%) TiO2

(%) Oxidised 500 61.5 11.7 0.23 0.011 0.003 0.040 Oxidised 250 67.3 4.6 0.19 0.009 0.003 0.039 Oxidised 125 68.8 1.9 0.19 0.007 0.003 0.033 Oxidised 75 69.7 1.1 0.17 0.006 0.012 0.031 Oxidised 45 69.7 1.2 0.16 0.006 0.042 0.033 Fresh 500 60.3 14.6 0.41 0.008 0.008 0.065 Fresh 250 69.1 3.6 0.27 0.002 0.006 0.006 Fresh 125 70.6 1.1 0.23 0.0005 0.053 0.054 Fresh 75 71.3 0.6 0.22 0.0005 0.005 0.054 Fresh 45 71.4 0.6 0.20 0.0005 0.004 0.052 Zone Grind Size

(μm) MnO(%)

CaO (%)

MgO(%)

K2O(%)

Na2O(%)

Zn(%)

Oxidised 500 0.08 0.07 0.24 0.004 0.008 0.004 Oxidised 250 0.08 0.03 0.14 0.002 0.001 0.005 Oxidised 125 0.09 0.02 0.10 0.001 0.007 0.005 Oxidised 75 0.11 0.02 0.08 0.002 0.0005 0.011 Oxidised 45 0.13 0.02 0.18 0.0005 0.0005 0.028 Fresh 500 0.09 0.42 0.71 0.038 0.023 0.006 Fresh 250 0.10 0.14 0.28 0.006 0.003 0.006 Fresh 125 0.10 0.07 0.17 0.001 0.005 0.006 Fresh 75 0.11 0.05 0.15 0.002 0.006 0.006 Fresh 45 0.12 0.04 0.15 0.001 0.0005 0.007

Intersections from this drilling of over 30 m at a grade of 20% Fe or higher are listed in Table 3.3

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Table 3.3: Significant Intersections from ISCOR Drilling Programs

Hole East (m)

North (m)

From(m)

Length (m)

Fe (%)

MT15AD -79896 -2571046 0.0 37.1 42.4 MT25 -79598 -2571501 48.0 32.9 30.3 MT26 -79899 -2571000 0.0 46.0 38.9 MT32 -80199 -2571099 136.7 43.7 28.5 MT35 -80199 -2570899 189.2 38.3 31.0 MT51 -79299 -2570700 154.3 43.6 38.4 MT56 -79299 -2570501 256.2 62.4 34.2 MT57 -79599 -2570800 115.0 50.5 41.1 MT08L -79799 -2571099 0.0 44.0 37.6 MT09L -79700 -2571100 0.0 43.0 37.3 MT21L -80300 -2571099 144.0 30.0 33.5 MT22L -80400 -2571099 103.0 41.0 32.8

The diamond drilling was accompanied by:

• down hole surveys;

• a geotechnical study of the drill core;

• mineralogical studies; and

• metallurgical testwork.

Beneficiation testwork indicated that a simple process of low intensity magnetic separation is suitable for optimum concentration. Separation at a grind size of 80% passing 150 μm achieved a mass recovery of 50%, with final product grades of 69.7% Fe, 2.05% SiO2, 0.40% Al2O3, and 0.01% P (du Pleiss et al, 1997).

ISCOR undertook several estimates of the tonnes and grade of the in situ mineralisation. As these estimates were not reported in accordance with the JORC Code they have not been included in this report.

In 1993, the exploration focus shifted to evaluate mineralisation on the farms Julietta and Gouda Fontein. From 1993 to 1997, some 80 diamond core holes for 14,500 m were completed and additional BIF mineralisation was intersected and added to ISCOR’s resource inventory.

3.4.2 Ferrum 2008

During 2008, Ferrum drilled 20 vertical RC holes (FCL001 to FCL020) on the Farm Moonlight for a total of 2,087 m. The holes were sited to twin a range of ISCOR drill-holes.

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The Ferrum drilling program verified the tenor, position, and width of significant intersections of both partially oxidised and fresh BIF mineralisation reported by ISCOR. A comparison of all of the twinned intersections, using a minimum intersection width of 5 m, a minimum grade of 20% Fe, and a maximum internal waste intersection of 5 m, gave a total of 657 m @ 33.2% Fe in the 20 Ferrum holes compared to 704 m @ 32.7% Fe reported for the historical twinned ISCOR holes.

A typical section that includes pairs of twinned holes across the shallower oxidised portion of the deposit is shown as Figure 3.10; and a section across the deeper fresh portion of the mineralisation is shown as Figure 3.11.

Figure 3.10: Cross-section along -79 700mE – Showing Twinned Near Surface Oxidised Mineralisation

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Figure 3.11: Cross-section Along -79 300mE – Showing Twinned Deeper Fresh Mineralisation

3.4.3 Ferrum 2009-10

During December 2009 and January 2010, Ferrum carried out a second RC drill program of 66 vertical holes (FCL021 to FCL086) for a total of 3,748 m. The program was designed to infill-drill areas of near surface mineralisation at sufficient density to enable the estimation of an Indicated Resource that would form the basis for the initial 20 to 25 years of mining at the Project.

The holes were sited to complete 100 m x 100 m grid patterns in three areas: southwest, southeast, and northeast (refer Figure 3.3). The drilling confirmed both the continuity and the tenor of the mineralisation.

3.4.4 Drilling Summary

Table 3.4 summarises drilling statistics by explorer and hole type.

Ferrum’s drill holes were surveyed and the locations of many ISCOR drill-holes were recovered, further verifying the ISCOR database.

It is CRM’s opinion that the sampling, sample preparation, and analytical procedures employed by Ferrum during both of its drill programs were planned and performed to high industry standards.

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Table 3.4: Drilling Statistics by Explorer and Hole Type

Explorer Years Diamond RC Halco Holes m Holes m Holes m ISCOR 1983-86 78 12,154 24 3,169 142 6,783 Ferrum 2008 20 2,087 Ferrum 2009-10 66 3,748 Totals 78 12,154 110 9,004 142 6,783

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4. MINERAL RESOURCES - MOONLIGHT

4.1 Resource Estimation Methodology At the request of Ferrum, CRM completed a resource estimate for the Moonlight Deposit in April 2010 (and reconfirmed on 26 October 2010). The estimate was completed by John Doepel, Principal Geologist. It is reported in accordance with the 2004 edition of the JORC Code. The estimate employed geostatistical Inverse Distance Squared modelling to produce ore block models (“OBMs”) of the mineralisation within the deposit. The final combined OBM comprises 22 separate OBMs, each of which was made within a separate wireframe that was constructed to enclose a unit of mineralisation.

OBM block dimensions were 20 m EW, 20 m NS, and 5 m vertical. The blocks were constrained to wireframed bodies of BIF mineralisation. The wireframes were constructed to include mineralisation with grades of more than 15% Fe, thickness of more than 5 m, and included waste of less than 5 m. The minimum thickness of waste units was also 5 m.

4.2 Mineral Resources The OBM contains resources that, at a lower block-cut of 15% Fe, total 300 Mt at 30% Fe, refer Table 4.1, and were classified according to the following criteria:

• Indicated Resources - Blocks interpolated from 43 plus points

• Inferred Resources - Blocks interpolated from less than 43 points.

The magnetite grains within the BIF are partly altered to hematite within the oxidised zone and CRM has therefore reported the Resource in two classifications, an upper Oxidised Zone and a lower Fresh Zone.

Table 4.1: Resource Table

Resource Zone and Classification Volume (m3) Tonnes Grade (Fe%)

Indicated Oxidised 10,000,000 34,000,000 30 Fresh 12,000,000 40,000,000 35

Total Indicated 22,000,000 74,000,000 33 Inferred

Oxidised 14,000,000 45,000,000 30 Fresh 54,000,000 180,000,000 29

Total Inferred 68,000,000 225,000,000 29 Total Oxidised 24,000,000 79,000,000 30 Total Fresh 66,000,000 220,000,000 30 TOTAL RESOURCES 90,000,000 300,000,000 30

Note: Totals may differ from sum of individual items due to rounding

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The estimate represents a summary of Ferrum’s net attributable Resource status as set out in Appendix 1.

The distribution of the Indicated and Inferred portions of the resource is shown in Figure 4.1.

Figure 4.1: Plan of OBM Footprint

Figure 3.4 to Figure 3.6 are sections through the OBM that show the base of oxidation and the distribution of Indicated and Inferred blocks within the BIF units.

For the upgrading of the resource classifications from Inferred to Indicated and from Indicated to Measured further infill drilling will be required.

4.3 Conversion of Mineral Resources to Mineral Reserves CRM is of the opinion that, for the Indicated Mineral Resource to be converted to a Probable Ore Reserve, systematic metallurgical testwork will need to be carried out on a full range of samples of mineralisation, in order that recoveries of Fe to concentrate can be quantified for the relevant portions of the deposit.

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5. DE LOSKOP

5.1 Geology and Mineralisation As at Moonlight, mineralisation at De Loskop is present within BIF horizons. The BIFs are within the Zandrivierspoort Formation, which is flanked by granitic gneisses and which contains BIFs, schists, amphibolites, quartzites, and calc-silicate rocks. (Refer Figure 5.1).

Figure 5.1 De Loskop – Geological Map

The Zandrivierspoort BIF hosts iron ore mineralisation of the De Loskop Deposit immediately to the east of Ferrum’s tenement. The mineralisation, which outcrops over a width of about 100 m on Mt De Loskop, was drilled by ISCOR in the 1990s. The Zandrivierspoort Formation also hosts the Kumba Resources’ (“Kumba”) Zandrivierspoort iron ore deposit about 35 km to the southeast, which contains an Indicated Mineral Resource of 447 Mt at a grade of 34.9% Fe. Refer Figure 3.1.

Relief within the prospect area is low, although the moderate to steeply dipping BIF units outcrop to various extents along a subdued west-northwest striking ridge that has a length of 14 km within Ferrum’s tenement.

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5.2 Previous Exploration There is no record of any exploration for iron ore within the Ferrum tenement. However, as described above, the BIF unit was drilled along strike to the east of the tenement by ISCOR, which reported an in situ grade of 37.8% Fe for the mineralisation in the vicinity of Mt De Loskop.

5.3 Exploration Target CRM has estimated an exploration target for Ferrum’s De Loskop Prospect. CRM’s estimation is summarised below:

“An exploration target for iron mineralisation is present within the De Loskop Prospect. The potential mineralisation within the target area is within the range of 200 Mt to 1,000 Mt at a grade of between 30% Fe and 40% Fe.

The target horizon is a meta-BIF unit within the Zandrivierspoort Formation, which within the tenement area has a length of 14 km and a steep dip, but incomplete outcrop. The width of the BIF unit is not known, but along strike, immediately to the east of the tenement, it has a thickness of about 100 m at the De Loskop Deposit on Mt De Loskop, where it is reported to have an in-situ grade of 37.8% Fe.

The potential quantity and grade of the target is conceptual in nature, as there has been insufficient exploration to define a Mineral Resource, and it is uncertain if further exploration will result in the determination of a Mineral Resource.”

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6. MINING

6.1 General Richard Flanagan Mining Consultancy Pty Ltd has undertaken a preliminary mining study on the Moonlight Deposit.

It is assumed that the mining will be undertaken on a contract basis using conventional open pit methods, i.e. drill and blast and load and haul to the ROM pad or crusher. The mining contractor will provide his own equipment (using hydraulic excavator or loader and rigid body mine trucks and ancillary equipment) and labour and charge on a “per tonne delivered” basis.

In the absence of any geotechnical data, pit wall angles have been assumed based on 10 m benches and 5 m berms with bench wall slope angles of 71° in fresh and 56° in weathered material. This results in the following overall pit slope angles being used in the optimisation:

• Fresh hanging wall exposures 55°

• Weathered hanging wall exposures 45°.

However, in the areas where the orebody thickness is smaller, mining may need to consider smaller bench heights or some selective mining.

6.2 Mining to Maximise the Use of the Oxidised Zone As the Oxidised Zone overlays the Fresh Zone, a pit optimisation and a likely extraction sequence using the OBM provided by CRM was undertaken to determine the applicable mining rate for a life of mine set at 24 years.

With an assumed mining dilution of 5% along with a mining recovery of 98% the resultant typical optimisation pit shell is shown in Figure 6.1 and results in an average strip ratio of 1:1 and a mining rate of 4.3 M/ta for the nominated 24 year mine life. This optimised pit shell used all of the Oxide Zone’s Inferred and Indicated Resource.

A provisional waste dump with 200 overall batter slope angled to a height of 40 m on the southern side of the open pit has also been considered. Some in pit backfill has been incorporated with the waste dump covering the shallow southern section of the open pit. Refer Figure 6.2. As a result of the above, an initial 24 year pit has a footprint of ~500 ha (pit and waste dump).

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FCL2A Run 2 Optimisation Shell 4

Figure 6.1: Pit Optimisation Shell – Oxidised Zone

Figure 6.2: Pit and Waste Dump Footprint – Oxidised Zone

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7. ORE PROCESSING

7.1 Overview In order to supply the required feed for slurry pumping that also meets the needs of possible “value adding” secondary processing, the ore processing product size needs to be 45 μm.

In addition, use of the partially oxidised ore with its lower Fe from the Moonlight Deposit as the design ore to the process plant means that the ore will contain both magnetite and hematite. Therefore, the process plant also needs to separate the magnetite at the largest size possible to maintain the required Fe grade so as to maximise the recovery of hematite.

7.2 Initial Testwork Ferrum commissioned ProMet to undertake the initial or sighter metallurgical testwork on three composite samples from its Moonlight Deposit in December 2008. The samples had been selected by Ferrum as being representative of the three types of mineralisation expected to be found in the Project area, namely:

• Altered (partially oxidised): Fe is present as magnetite and hematite in varying proportions and generally at depths of less than 60 m below surface

• Transition: depths of between 50 m and 80 m below surface

• Fresh (non-oxidised): Fe occurs predominantly as magnetite and is generally at depths of greater than 60 m below surface.

The scope of work for this initial testwork included preliminary optimum grinding testwork and Bond Work Index testwork.

The testwork conducted on the three composite samples yielded ‘good’ results with silica levels in the concentrate lower than:

• 5% SiO2 at a very coarse grind size (P80 of 220 to 238 μm), i.e. suitable for blast furnace use

• 1% SiO2 at a finer grind size (P80 of 100 to 125 μm), i.e. suitable for direct ironmaking processes.

The Bond Work Indices for all the three composite samples are considered relatively ‘high’ based on ProMet’s extensive work on magnetite deposits throughout the world.

A modified Davis Tube test method was developed to cater for the larger optimum grind size results from the optimum grinding testwork. This Davis Tube method utilises a 75 μm screen and aims to provide a product with a P80

of 45 μm for grinding testwork.

The altered or partially oxidised sample yielded lower weight recoveries at the finer grind sizes and therefore it is recommended that further testwork based

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on using the WHIMS process be performed on this sample to improve the weight recovery.

7.3 Additional Testwork Ferrum has subsequently repeated Davis Tube testing on samples from Composite 1 (Fresh) and Composite 3 (Oxidised). A summary of the test results for the oxidised ore is shown in Table 7.1. The results were similar to previous results, i.e. same trends but overall the oxidised ore Fe contents were 1%-2% lower.

Table 7.1: Summary Davis Tube Results

DTR Wt. Fe Fe SiO2 SiO2 Al2O3 Al2O3

PRODUCT Distb. Grade Distb. Grade Distb. Grade Distb. (%) (%) (%) (%) (%) (%) (%) Composite 3, 500 μm Mags 47.1 62.47 81.5 11.03 11.4 0.24 14.6 N-Mags 52.9 12.65 18.5 76.60 88.6 1.27 85.4 Calc'd HEAD 100.0 36.10 100.0 45.73 100.0 0.78 100.0 Composite 3, 250 μm Mags 42.3 66.40 79.6 4.81 4.4 0.23 11.1 N-Mags 57.7 12.45 20.4 75.95 95.6 1.33 88.9 Calc'd HEAD 100.0 35.25 100.0 45.89 100.0 0.86 100.0 Composite 3, 125 μm Mags 36.7 68.49 70.0 1.88 1.5 0.22 10.3 N-Mags 63.3 17.03 30.0 70.74 98.5 1.11 89.7 Calc'd HEAD 100.0 85.52 100.0 72.62 100.0 1.33 100.0

The tails rejection results were also compared to the original test data and plotted in Figure 7.1.

Care must be taken in comparing the results of the two samples as only three DTR size fraction tests were run (no fine or coarse) on the new samples and only four (no coarse) were performed on the original samples. The results do indicate similar but slightly higher tails rejection rates for the latest samples. To be conservative, the original tails rejection curves which results in higher power consumption is proposed to be used in the design.

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60.0%

70.0%

80.0%

90.0%

100.0%

110.0%

0 200 400 600 800 1000 1200Microns

Tails

Rej

ectio

n W

eigh

t % Composite 1

Composite 3

Original Comp 1

Original Comp 3

Log. (Composite 1)

Log. (Composite 3)

Log. (Original Comp 1)

Log. (Original Comp 3)

Figure 7.1: Tails Rejection Curve

7.4 Design Basis The design basis for the ore processing plant is a circuit utilising High Pressure Grinding Rolls (“HPGR”) crushing to approximately 80% passing 1,800 μm, followed by rougher magnetic separation and wet ball milling and magnetic separation at 125 μm. Refer Figure 7.2. The magnetic separation concentrate will be ground to 80% passing 45 μm and the final cleaning will be performed via a hydroseparator. Approximate feed and product design grades are shown in Table 7.2.

Table 7.2: Feed and Product Design Grades

Item % Fe % SiO2 % Al2O3

Feed 30.0 37.2 1.20 Concentrate 69.5 1.40 0.22

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7.5 Process Description 7.5.1 Primary Crushing and Stockpiling

A gyratory primary crusher will reduce the ROM from a top size of 850 mm down to a top size of 125 mm. The crusher product will be discharged onto an apron feeder before transfer to the Crushed Ore Stockpile (“COS”). The COS will serve as a supply buffer between the mine and the primary milling section. The ore will be removed from the COS and will be fed to the plant feed bin via a front end loader. The ore will be then conveyed to a secondary cone crusher with the crusher’s product screened and the oversize will be returned to the cone crusher feed. The screen undersize will continue on to the HPGR feed bin.

7.5.2 Primary Grinding

The HPGR will be used to reduce the size to 1,800 μm. The HPGR product will be screened and the oversize will be passed through the HPGR again. The undersize will be fed to the first stage of magnetic separation.

7.5.3 Rougher Magnetic Separation (“RMS”)

The HPGR screen undersize will be pumped to the Rougher Magnetic Separation (“RMS”) section. The RMS section will consist of multiple single drum units which will beneficiate the HPGR undersize into magnetic concentrate and a coarse tails.

The RMS stage will reject approximately 74% of all tails which will lower the throughput to the secondary and tertiary grinding stages and thus will reduce grinding power requirements. The coarse tails will be pumped to the coarse tails cyclones to separate out the coarse material which will bypass the thickener and fine material which will need settling in the tailings thickener before disposal. More detail is provided below in the tailings disposal section.

7.5.4 Secondary Grinding

The secondary grinding section will be based on the use of ball mill(s) to further reduce the size of the concentrate. The RMS concentrate will be pumped to the ball mill discharge hopper(s) where it will be mixed with the ball mill discharge. The slurry mixture, consisting of mill discharge and fresh feed, will be then pumped to the ball mill(s) cyclone nest to produce an overflow stream with a P80 of 125 μm.

The coarse cyclone underflow stream that will be produced will be recycled back to the ball mill(s). The cyclone underflow stream will be controlled at 80% solids. This arrangement will allow classification of the fresh feed before milling to minimise the mill throughput and will prevent over grinding.

7.5.5 Cleaner Magnetic Separation (“CMS”)

The ball mill cyclone overflow will gravitate to the Cleaner Magnetic Separation (“CMS”) section to recover the liberated magnetite. The CMS

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stage will reject a further 19% of total tails from the circuit to send directly to a tailings thickener. At this stage, 93% of the non-magnetics will have been removed. There will be multiple triple drum CMS units operating in parallel.

The CMS concentrate will report to the Derrick screens. The Derrick screens will be a component of the recirculating load section of the secondary grinding area as they will return oversize material, commonly low density fractions high in silica - misreporting to the cyclone overflow to the ball mill feed. Derrick screen undersize will gravitate to concentrate handling and filtering circuit.

7.5.6 Concentrate Handling and Filtering

The Derrick screen undersize will be fed to the thickening cyclone where the underflow reports to a tertiary ball mill(s) to further reduce the concentrate size to 80% passing 45 μm. The cyclone overflow will be mixed with the tertiary mill(s) product and fed to a hydroseparator which deslimes the concentrate to reduce the silica content to final specifications. The hydroseparator overflow gravitates to the tailings thickener.

The underflow from the hydroseparator will be then fed to storage tanks ahead of the slurry pumping station.

7.5.7 Tailings Dewatering and Thickening

The RMS tailings will gravitate to a collection hopper from where it will be pumped to a tailings cyclone nest for classification. The tailings cyclone will produce a coarse particle underflow and a fines overflow. The tailings cyclone overflow will be combined with the other fine tailings streams from the CMS and concentrate thickener/hydroseparator sections before entering the tailings thickener.

The tailings thickener will produce a thickened slimes underflow of approximately 55% solids and a clear process water overflow. The process water will be recovered in the process water tanks from where it will be redistributed for use in the plant. The thickened fines tails will be pumped to a tailings disposal sump where it will be combined with the tailings cyclone underflow to make up a coarse and fines tailings mixture. This mixture will be fed to the tailings belt filter and the filter cake will be trucked to the tailings disposal area.

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8. SITE INFRASTRUCTURE

8.1 Site Access Access to the Moonlight area will have to be upgraded and new roads constructed to provide all weather access.

Access roads on site will be also constructed to enable access to the support infrastructure associated with the mine site and process plant such as the power station, water supply and accommodation village.

In addition, it is possible an all-weather airstrip at the mine may be required to cater for emergency evacuations and regular plane flights for personnel during construction and operations. Alternatively, arrangements could be made with one of the local farm airstrips in the area.

8.2 Power Generation and Reticulation Years of neglect and lack of investment have seen the South African power supply situation deteriorate to a state where power is now in critically short supply with power cuts severely affecting business countrywide. This state of affairs makes it unlikely that the Project will be able to source any significant amount of reliable power from the government-owned power utility, Eskom, and hence will have to be entirely self-sufficient for its power needs.

Therefore a suitably sized powerstation will be required that would comprise multiple diesel, gas or dual fuel generating units. The power will then be reticulated to the various user locations by overhead transmission lines.

8.3 Water Supply The magnetite concentrator process design includes measures to limit water consumption such as filtering of the tailings and the overland slurry pumping system includes a return water pipeline . Further, the process water for the concentrator does not need to be potable water. Saline water is suitable, with total dissolved solids of greater than 30,000 ppm acceptable. It is envisaged that, due to the size of the water requirement, construction of a water storage pond is required.

As indicated in Section 2.5.3, a water supply system will need to be developed for the Project due to its location in an arid province in South Africa. Local supply is currently limited to boreholes but a number of alternative water sources have been identified to support the water needs of the Project, refer Figure 8.1. They include:

• Water catchment within the process plant and mine

• Groundwater inflow into the mine’s pit and hence dewatering

• Groundwater dewatering around the open pit

• Tie into the Mokolo Crocodile Water Augmentation Project (“MCWAP”) with ~80 km pipeline from Lephalale, refer Figure 8.2

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• Tie into the Olifants River Water Resource Development Project (“ORWRDP”) with ~110 km pipeline from north of Mokopane, refer Figure 8.2

• Water harvesting, refer Figure 8.3, including off-channel storage facility to harvest water with high flows; store in off-channel dam and/or store in surrounding aquifers i.e. aquifer storage and recovery from

Lephalala River – west of mine, ~22 km.

Limpopo River – north-west of mine, ~35 km.

• Purchase irrigation rights from:

in and around the mine (< 20 kms)

Tolwe irrigation scheme and south of Tolwe, ~35 km to the north east

Irrigation allocations at Limpopo River

For the purposes of the Report it has been assumed that the water supply for the Project will be from:

• Water catchment within the process plant and mine

• Groundwater inflow into the mine’s pit and hence dewatering

• Groundwater dewatering around the open pit

• A well field within 15 km of the mine which will require up to 20 wells.

Mine dewatering as a source of process water would not normally be available in the initial years of operation but will be available as the pit deepens and goes below the water table.

Due to the size of the workforces at the mine, potable water supplies will be also needed. This could also be used to supply improved water quality to the local township(s), if required.

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Figure 8.2: Possible Water Sources – MCWAP/ORWROP

Figure 8.3: Possible Water Sources – Water Harvesting

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8.4 Fuel Unloading and Storage Facility A fuel storage facility of approximately three to four weeks supply will be required at the mine. The facility will also include for bowsers for fuelling the mining fleet, trucking fleet as well as light vehicles.

It is anticipated that this facility could be owned and operated by a fuel supply company.

8.5 Offices, Workshops, Lunch Rooms, etc The mine based operations will have offices, workshops, lunch rooms and change rooms located within the mine boundaries. These are envisaged to be transportable type or pre-fabricated type wherever possible.

Corporate offices are assumed to be located off site.

8.6 Accommodation Accommodation village will be built at the mine site to house the construction workforce. This village would be upgraded for the administration, operations and maintenance personnel as construction work is completed.

The village’s permanent common use buildings will generally be constructed of higher grade materials whereas accommodation facilities will be of the transportable type. The village will include its own sewage plant.

Further, there will be a requirement to provide local housing at the mine for permanent employees during operations.

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9. FINAL PRODUCT

9.1 Alternatives

Several alternatives have been identified for the final product form for the Project. An assessment of the potential alternatives will need to take into account the following:

• Potential domestic and international markets for the range of alternative final products

• Geographic location of the Project • Railheads on existing and future proposed networks • Ports for shipment • Existing mines and industrial nodes in the vicinity • Domestic iron and steel works and their capabilities in being able to

utilise the potential products • Availability of power, water and other utilities.

The alternatives, in no order of preference, include:

• Magnetite concentrate: for export as a pellet plant feed or sinter plant feed; or

within South Africa as a sinter feed blend

• Pellets using the project’s concentrate

using a blended mix of concentrate and South African sourced hematite fines

• Merchant pig iron or granulated iron • Semi-finished steel products.

These alternatives, which have not been evaluated technically or economically, may be applicable to both domestic and international markets though some are more suited to the domestic market.

Due to the logistical constraints of moving bulk type products overland from the mine site to the market, secondary processing of the concentrate is not envisaged at the mine site. Rather, the alternatives being considered envisage the pumping of concentrate as a slurry, with a return water pipeline, and employing proven technology which has been used with success on many similar applications. The return water pipeline will allow plant make-up water and additional raw water to be conveyed from existing available sources along its length for use on the mine site or by other consumers in the mine vicinity.

Figure 9.1 indicates the location of the mine and possible locations of secondary processing plants in relation to the rail networks, ports of shipment and potential existing iron and steel making customers within South Africa.

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Figure 9.1: Potential Market/Export Location Map

9.2 Concentrate

In this alternative, it is envisaged concentrate will be pumped via pipeline across to a railhead at either Mahalapye (Botswana), Polokwane, Mokopane or Lephalale.

At the railhead, the concentrate will be dewatered using disc or belt filters. The filtration process will aim to dewater the concentrate to a cake less than 8.5% moisture. This product will be transferred to stockpiles before being loaded onto rail wagons for transport to either Maputo or the proposed new deep water port at Techobanine Point, south of Maputo, for stockpiling and shipment to export markets.

If the pipeline is to either Polokwane, Mokopane or Lephalale then concentrate could be railed to customers within South Africa. One of the potential uses of the concentrate is as a part of the ferrous material blend presently used at the sinter plants at the Arcelor steel plants. This option may entail revamping of the existing sinter plants to allow an increase in production (common solution used by other steelmakers) or a new sinter strand.

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Whilst the previous ore processing section has focused on producing the more common Blast Furnace (“BF”) grade concentrate with modifications to the circuit, it would also be possible to produce higher Fe grade concentrate suitable for secondary processing into Direct Reduction (“DR”) pellets.

9.3 Pellets

Similar to the concentrate based alternative, the concentrate, either BF or DR grade, will be pumped via pipeline across to railheads at either Mahalapye (Botswana), Polokwane, Mokopane or Lephalale.

Adjacent to the railhead it is envisaged that the concentrate will be dewatered, stockpiled and fed to a pellet plant, refer Figure 9.2 for a typical flow diagram.

Figure 9.2: Schematic Flow Diagram - Grate-Kiln Pellet Process

Fuel can be waste wood, oil, coal or gas. Coal bed methane is assumed for the purposes of this Report.

From the stockpiles, the pellets are loaded onto rail wagons for transport to either Maputo or the proposed new deep water port at Techobanine Point, south of Maputo, for stockpiling and shipment to export markets.

If the pipeline is to either Polokwane, Mokopane or Lephalale then the pellets could be railed to customers within South Africa. The smaller rotary kiln/EAF based steel plants within South Africa could make use of the pellets directly but will not be able to consume major quantities. For example, the Saldanha Bay steel mill currently imports pellets, estimated at 400,000 to 600,000 t/a from South America and the Project’s pellets could act as a direct replacement if they were economically competitive.

The blast furnaces of Arcelor are also a potential user of pellets. However, it is believed these do not have the requisite pellet handling capabilities and therefore material handling system modifications will be required.

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9.4 Blended Iron Ore Pellets

The hematite iron ore mine at Thabazimbi which is owned by ArcelorMittal and operated on its behalf by Anglo’s Kumba Iron Ore is approaching the end of its life. The mine has decreasing production volumes and an increasing ratio of fines to lump ore being produced. ProMet understands the mine currently produces approximately 2.4 Mt/y for consumption by South African steel producers. This presents an opportunity for the concentrate from the Project to be blended with the Thabazimbi fines.

In this alternative, it is envisaged concentrate will be piped to the Thabazimbi mine where, after dewatering, the concentrate will be blended with an approximately equal quantity of surplus hematite fines and fed to a pelletising plant similar to that described in Section 9.3. Before the blending can occur, the Thabazimbi fines will also have to be ground down to 45 μm.

With the reduction in mine production at Thabazimbi, the existing rail line linking the mine with ArcelorMittal’s steel works and other steel producers to the South-East is currently underutilised compared with its 4 Mt/y historical carrying capacity. This implies that a minimum production of 1.6 Mt/y of pellets could currently be accommodated on the rail link, increasing with time in proportion to the reduction in Thabazimbi mine’s production of lump ore. Production is envisaged up to the original 4 Mt/y design capacity of the rail line and higher, if rolling stock inventories and other rail infrastructure permit.

9.5 Merchant Pig Iron

In this alternative, it is envisaged again that the BF grade concentrate will be pumped via pipeline to railheads at either Mahalapye (Botswana), Polokwane, Mokopane or Lephalale. Adjacent to the railhead it is envisaged that the concentrate will be dewatered, stockpiled and fed to an ironmaking plant.

A number of ironmaking technologies are available. The rotary hearth furnace (“RHF”) technology, refer Figure 9.3, is considered the most appropriate proven technology for a plant capacity of ~1.0 Mt/a, and there are a number of internationally recognised providers of this technology. The hot metal from the electric melter will be cast into ingots or granulated depending on the customer needs.

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FASTMELT Process

Figure 9.3: Schematic Flow Diagram of Rotary Hearth Technology

1.4 Mt/y of concentrate will allow the production of 1 Mt/y of merchant pig iron. Similar to the concentrate and pellet alternatives, the merchant pig iron can be exported via ports in Mozambique or sold domestically.

9.6 Semi-Finished Products

As a further step in value-adding, aligned with the South African Government’s policy of maximising in-country secondary processing of natural resources, this alternative proposes to add a steel mill to the plant envisaged in Section 9.5 to produce semi-finished products including, possibly, hot rolled coil for which there is a local, regional and export market.

It is envisaged the steel mill will utilise the hot metal produced in Section 9.5 and be situated adjacent to and be fully integrated with the ironmaking plant near the railhead in South Africa. From this location it will be possible to access the existing rail network for transport to potential markets.

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10. EXPORT LOGISTICS

10.1 Mine to Port As the basic decision of pumping the magnetite concentrate to a railhead for export or value adding secondary process, the rail transport options are to three possible port locations:

• Maputo, Mozambique

• Techobanine Point, Mozambique (proposed)

• Richards Bay, South Africa

A map of the South African major rail and port network is given in Figure 2.3 and Figure 9.1.

The rail distances to the potential ports from potential rail transfer terminals are shown in Table 10.1. For Techobanine Point, the distances to Maputo are plus ~100 km.

Table 10.1: Rail Distances to Port

Terminal Rail Distance (km) Maputo Richards Bay Polokwane 615 965 Mokopane 680 900 Lephalale 915 1,035 Thabazimbi 995 930 Mahalapye (Botswana) 1,330 1,290

Discussion would need to be undertaken with either Transnet or Botswana Railways, during the study phase of the Project and contracts signed shortly after financial close to ensure the necessary lead time to:

• finalise additional rolling stock purchases and/or

• undertake track upgrades/duplications to ensure necessary train slots are available.

A rail only export option is possible from the mine site if either existing or proposed rail networks are extended to the mine. The closest towns with access to the national freight rail network are Polokwane or Mokopane (~150 km SE), Lephalale (formerly Ellisras, ~80 km SW) and Botswana Railway’s terminal at Mahalapye (~140 km W). Extending lines from these centres will add to the capital cost of the Project and potentially increase the construction time as the land acquisition for the right of way would be a complex process. There is also potential, in the future, for the Project to tie into the proposed rail link between Lephalale and Polokwane associated with the development of the Waterburg coal field.

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Further, Ferrum may be able to make use of the existing links into South African steelworks via Lephalale as the Grootegeluk coal mine exports 1.7 Mt/a of coal to steelworks at Vanderbijlpark, Newcastle (KZN) and Saldanha (WC) and the Thabazimbi area, a further 120 km by rail to the south of Lapahale, exports 2.5 Mt/a of iron ore to steelworks at Vanderbijlpark and Newcastle.

10.2 Ports 10.2.1 Maputo

Maputo is the closest port to the Project. The port is undergoing a continuous modernisation and expansion program and combined with the region’s improving cross-border road and rail links, is being marketed as a “secure, modernised and cost efficient alternative to South African ports”. The rail corridor into South Africa carried ~5 Mt/a of freight in 2007 and is expected to expand to almost 17 Mt/a by 2010 and its current capacity is ~60 trains per week.

Among the major companies now exporting through the port are Transvaal Sugar, Capespan, BHP Billiton, Manganese Metal Company, Delta EMD, Xstrata, Ore and Metal, Highveld Steel, Rio Tinto and Columbus Stainless.

In 2007/8, 4 Mt of South African coal was exported from Maputo and this could be expected to increase to almost 6Mt in 2010. Similarly, with magnetite, the port handled 1 Mt of South African magnetite in 2007/8 through the bulk terminal and this is expected to increase to 2 Mt in 2009 and possibly to over 4.6 Mt in 2010. (This forecast is based on demand for the ore in China.) Only 6,000 t of South African export ferro-chrome was exported in 2005 and this is expected to increase to 1.2 Mt by 2010.

There are two main components to the port, the Maputo Cargo Terminals, which include the Citrus, Sugar, Container, Ferro and Scrap terminals, and 6 km further upriver, the Matola Bulk Terminals with four deepwater berths for handling bulk minerals, petroleum, aluminium and grain. Refer Figure 10.1.

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Figure 10.1: Maputo Port Cargo and Bulk Terminals, Mozambique

Table 10.2 indicates the size of the berths and their depths.

Table 10.2: Maputo Port Berth Statistics

Terminal Length (m)

Depth* (m)

Cargo Container terminal 300 11 Citrus terminal 380 11 Bulk sugar terminal 170 10.5 Molasses terminal 179 10.5 Coastal terminal 300 8 Bagged sugar terminal 200 10.5 Bulk Grain terminal 210 9.5 Aluminium terminal 210 12.6 Petroleum terminal 230 10.5 Coal terminal 205 10.5

All depths are below chart zero and the actual tide is to be added (max. 3.9 m and minimum 0.2 m).

With an entrance channel depth of 9.4 m, vessel sizes are limited to ‘Panamax’ class of ships which are typically 35,000 DWT to 50,000 DWT.

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10.2.2 Richards Bay

Richards Bay consists of a Dry Bulk Terminal, a Multi Purpose Terminal and the privately operated Coal Terminal. Other private operators within the port include several wood chip export terminals and a bulk liquid terminal. Refer Figure 10.2.

Figure 10.2: Port of Richards Bay, South Africa

Today the port occupies roughly 2,157 hectares of land and 1,495 hectares of water with space for expansion which makes it one of the largest ports in the world. The port currently has 21 berths, excluding the dredger and tug berths, and is supported by a railway network supply system.

The Multi-Purpose Terminal, with its six 13.5 m and one 17.5 m berths, currently handles

• Aluminium

• Bagged cargo

• Containers

• Ferro alloys

• Forest products - pulp/paper/timber/logs

• General cargo

• Granite

• Heavy lifts

• Pig iron

• Steel

During the 2005/06 financial year, Richards Bay handled a total of 1,735 ships and 89 Mt of cargo, of which 84.6 Mt was bulk cargo and 4.4 Mt breakbulk.

The port of Richards Bay has an entrance channel that is dredged to –19.5 m, giving it a maximum permissible draught of 17.5 m. Berthing depth varies

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between 8 m (small craft berth) and 19 m (coal berths). As such the port is capable of handling ‘Cape’ size bulk carriers and the largest ship handled in the port so far was the 372,201 DWT “Brazilian Pride”, which had a length of 363.7 m, a beam of 63.4 m and a maximum draught of 21.8 m.

10.2.3 Techobanine Point

The announcements around the Memorandum Of Understanding between Botswana and Mozambique governments indicate the following:

• The new port will handle vessels up to 300,000 DWT and 50 Mt/a of heavy cargo per year

• The rail will be used to transport Botswana's export minerals, cutting transit time from six days to 22 days

• The main cargo expected to use the new port is coal from Botswana. The country has an estimated 212 billion tonnes of coal reserves. Using Techobanine would free Botswana from dependence on the South African ports of Durban and Richards Bay which, apart from congestion problems, give priority to South African exports.

The description implies that it port should be suitable for handling any of the proposed final products discussed in Section 9.

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11. IMPLEMENTATION

11.1 Studies and Construction The Project will undergo a series of development phases from the Facilities Report issued by Ferrum as part of the Mining Rights Application to the production of a final product.

The anticipated development phases are:

• studies into possible product forms

• continuing resource drilling, metallurgical testwork;

• Definitive Feasibility Study and environmental investigations;

• regulatory approvals;

• project financing;

• implementation (design, construction and commissioning); and

• production and ramp-up to full capacity.

The indicative schedules for these phases and completion dates, assuming port access is available, are indicated in Table 11.1 and Figure 11.1.

Table 11.1: Milestone Table

Task Completion Date Facilities Report July 2010 Resource drilling and testwork/studies into alternative product forms

June 2011

Environmental and Heritage investigations December 2011 Definitive Feasibility Study March 2012 Receipt of Regulatory Approvals/Project Financing June 2012 Mobilise to site October 2012 Commissioning and first shipment September 2014 Ramp-up to full capacity September 2016

The schedule may be reduced if the major engineering contracts can be finalised before final Project approval to allow the early procurement of long lead equipment.

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Figure 11.1: Indicative Implementation Schedule

11.2 Operations 11.2.1 General

All components of the Project will operate 24 hours a day.

The operations and maintenance personnel will be employed on a four-panel continuous 12-hour rotating shift roster. Supervisory personnel will generally be employed on a standard five-day week and eight hours per day. It is estimated that the mine and ore processing plant and associated infrastructure will require

210 personnel.

Administration and management personnel for the Project including all accounting, purchasing, payroll and the like will be based at the site.

The majority of personnel will be recruited from within South Africa but some skilled operators, supervisors and management with specific mine, ironmaking, rail and/or port operations experience will be recruited

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internationally. If required, Western expatriate staff will be on a rotation cycle of six weeks on site and two weeks off site at a location of their choosing.

The key operations executives and technical personnel will be recruited and in place early in the Project.

11.2.2 Workforce Organisation

The Project labour requirements were derived by ProMet based on its experience of similar type operations worldwide.

The organisation will comprise a Managing Director supported by five function managers heading the following departments:

• Mine Operations including sub-managers for mine and concentrator

• Export Operations including engineering and maintenance

• Sales and Marketing

• Finance and Administration

• Human Resources.

The personnel to be directly employed by the Project are broken down as indicated in Table 11.2. Other personnel will be employed directly by the contract miner, trucking company and other service providers.

Table 11.2: Personnel Numbers

Category No. Off Unskilled 25 Semi skilled 78 Skilled 46 Supervisors 35 Superintendents and engineers 18 Managers 7 Senior manager 1 TOTAL 210 Note: excludes contract mining and trucking personnel

The needs of the mining and beneficiation operations and the requirement to have the support of external suppliers and manufacturing/fabricating facilities will add considerably to this. Statistics indicate that typically in a “second world economy”, for every one person employed directly on a project, up to 15 people will be indirectly employed in support of that one person and his family, e.g. in government services, schools, healthcare, shopping centres, etc.

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11.2.3 Outsourcing

Outsourcing to third party service providers will be an inherent feature of the operations. Outsourcing may include Build, Own and Operate (“BOO”) or supply and maintain type contracts.

Outsourcing, excluding BOO or similar operations, being considered includes the following:

• Access roads and, if required, airstrip maintenance

• Plant shutdowns

• Mobile equipment maintenance

• Local transport

• Information technology support

• Cleaning of offices and amenities

• Gardening and landscaping.

The use of BOO or supply and maintain contracts minimises risks and therefore these contracts will be used where significant operating benefits could be achieved by bringing in contractors with specific skills. This alleviates the need for the Project to replicate the skills and ensures the highest standard of performance at all times. To this end, BOO or supply and maintain type outsourcing to be considered includes:

• Contract mining (assumed in base case)

• Crushing and screening

• Power

• Water supply

• Fuel unloading and storage

• Accommodation facilities

• Mobile equipment.

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12. DISCUSSION

12.1 Main Drivers 12.1.1 Final Product/Secondary Processing

Whilst the Project has not yet fixed the final product form, the alternatives which are applicable to both domestic and international markets offer some unique market niches. Whilst concentrate and pellets are common type products and there is a known and increasing market for these products, the production of pellets by blending with Thabazimbi ore and merchant pig iron production also make reasonable cases.

For instance, there are two basic sources of merchant pig iron product:

• Produced by plants where production is wholly for sale to third parties.

• From integrated steel mills with merchant pig iron surplus to steelmaking requirements.

Apart from some minor cases, all blast furnace producers need to purchase their iron ore and coking coal on the open market. This leaves these producers in a difficult position in that merchant pig iron prices tend to follow the scrap price index. Therefore the blast furnace based pig iron producer can be squeezed between the cost of supply of iron ore/coking coal, which have risen considerably, and the scrap setting price which is independent of the iron ore/coal market.

The net effect of this situation is that a particular merchant pig iron producer can find its margins totally insufficient for its needs and has to temporarily cease production. The blast furnace operator will still continue to operate at this time but will endeavour to minimise its spare pig iron production for the same reason.

In contrast, the Project would be relatively unique by being independent of the vagaries of the ore/coking coal markets in that:

• it has its own ore; and

• it uses steaming coal, which has a lower base cost than coking coal and its price structure is more stable.

The Project, therefore, should be able to continue to operate at full capacity and produce merchant pig iron that it can sell at positive margin.

12.1.2 Transport

Transport costs are a known project driver and hence the preference for some form of a value added final product. However, even with value adding, it is still a substantial impost for the Project to bear. This, compounded with anecdotal discussions about congestion on the bulk material rail network and bulk material ports, means transport is also a key project driver.

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12.1.3 Ore Quality

The metallurgical testwork undertaken to date is limited to one composite in the oxidised zone. Further testwork is essential to understand the variability of the ore within this zone and to optimise the beneficiation circuit design. Options to be investigated should also include improved hematite recovery, e.g. through treating the tails through a WHIMS circuit.

Further, if the iron making alternative is chosen, metallurgical samples from a pilot plant will be required to be supplied to potential rotary hearth furnace suppliers to undertake their testing. It is anticipated that at least 500 kg will be required, i.e. 2.2 t of ore per supplier will need to be processed through the pilot plant.

12.1.4 Water and Gas Supply

The ore processing plant is dependent upon water supply (Section 8.3) and some of the secondary processing is dependent upon CBM gas to supply the heat/reduction atmosphere and neither is currently available. Whilst options exist for their supply, the resolution of these, the timing and their costs will be key to the success of the Project.

12.2 Location At this stage, no attempt has been made to optimise the location of the main plant. While the mine operation and primary crushing would be naturally located at the minesite, there is some flexibility in locating the beneficiation plant and the secondary processing facilities. Access to water, CBM, etc. will need to be assessed to obtain the most optimum project configuration.

12.3 Up-side Potential Several up-side potentials for the Project exist and these include the following:

• Eliminating the need to capitalise the pre-strip for initial mining operations

• Increased use of CBM, if available

• Containerised product to avoid bulk handling rail and port issues.

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13. CONCLUSION

The Report has concluded that:

• The Moonlight Deposit contains total Mineral Resource of 300 Mt at 30% Fe, of which the near surface Oxidised Zone contains 79 Mt @ 30% Fe. It is reported in accordance with the 2004 edition of the JORC Code. Refer Table 13.1.

Table 13.1: Resource Table

Resource Zone and Classification Volume (m3) Tonnes Grade (Fe%) Indicated

Oxidised 10,000,000 34,000,000 30 Fresh 12,000,000 40,000,000 35

Total Indicated 22,000,000 74,000,000 33 Inferred

Oxidised 14,000,000 45,000,000 30 Fresh 54,000,000 180,000,000 29

Total Inferred 68,000,000 225,000,000 29 Total Oxidised 24,000,000 79,000,000 30 Total Fresh 66,000,000 220,000,000 30 TOTAL RESOURCES 90,000,000 300,000,000 30

Note: Totals may differ from sum of individual items due to rounding

• The mine pit optimisation work indicates an average strip ratio of 1:1 for the first 24 years of mine production.

• Metallurgical testwork has indicated that:

the iron mineralisation is amenable to upgrading to produce a suitable ironmaking feedstock at relatively high grind sizes; and

standard concentrator plant design, i.e. crushing, grinding and magnetic separation process steps, is all that is required.

• Several different final product forms are possible, most including some form of secondary value-adding processes. These alternatives are based on pumping the slurry to a nearby railhead or existing mine for further processing and export. These include:

Magnetite concentrate:

- for export as a pellet plant feed or sinter plant feed; or

- within South Africa as a sinter feed blend.

Pellets

- using the Project’s concentrate;

- using a blended mix of concentrate and South African sourced hematite fines.

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Merchant pig iron or granulated iron.

Semi-finished steel products.

• The Project is located favourably to access the raw materials necessary for secondary value-adding processes such as good quality bituminous coal, CBM gas and fluxes.

• A number of factors that will influence the viability of the Project include:

transport logistics;

market assessment and price; and

the availability of water and gas,

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14. QUALIFICATION AND BASIS OF OPINION

14.1 Overview This report was prepared by CRM and ProMet and reviewed by both CRM’s J.J.G. Doepel and ProMet’s Derek Macauley, who both have relevant and appropriate experience, competence, and independence to appraise this Project and to be considered a “Competent Person” under the AIM Rules.

Details of the qualifications and independence of the CRM and ProMet directors involved in the preparation and/or review of this report are set out in the following sections.

Readers of this report are also directed to Ferrum’s Admission Document and the section entitled “Risk Factors” when reading this report. The identified risk factors apply where appropriate to the contents and conclusions of this report.

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14.2 J. J. G. (John) Doepel

B.Sc. (Hons), GradDipForSc, DipTeach, MAusIMM, MGSA

I, John Doepel, Principal Geologist and Director at Continental Resource Management Pty Ltd of 10 Hehir St, Belmont, WA, 6984, declare the following:

1. I hold the following degrees:

(a) BSc (Hons) in Geology (1966), University of Western Australia (b) Diploma of Teaching (1976), Western Australian Institute of

Technology(c) Diploma in Forensic Science (2003), University of Western Australia.

2 I am a member of the following professional organisations:

(a) The Australian Institute of Mining and Metallurgy (AusIMM) (b) The Geological Society of Australia (GSA).

3 I have over 30 years of relevant experience and I am qualified as a Competent Person in terms of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC Code 2004 Edition) and hence ‘AIM Rules for Companies’.

4 My contribution to this report “Turquoise Moon Iron Project Competent Persons’ Report” is based on my geological knowledge and the data provided to me by Ferrum Crescent Pty Ltd., from public sources, and from the non-confidential files of Continental Resource Management Pty Ltd. I have undertaken field inspections of the Moonlight Deposit.

5 I have no interest, direct or indirect, nor do I expect to receive any interest, direct or indirect, in the assets described in the above-named report or in the securities of Ferrum Crescent Pty Ltd. Also, I confirm I am otherwise independent of Ferrum Crescent Pty Ltd, its directors, employees and their advisers.

6 Fees are being charged at commercial rates for the preparation of this report, the payment of which are not contingent upon the conclusions of this report nor upon the admission of the Ferrum Crescent Pty Ltd to AIM.

Signature

John Doepel

Competent Person’s Statement:

The geological information in this report which relates to Exploration Results and Mineral Resources is based upon information compiled by Mr J.J.G. Doepel, B.Sc (Hons), GradDipForSc, Dip Teach, Principal Geologist of Continental Resource Management Pty Ltd. Mr Doepel is a member of the Australasian Institute of Mining and Metallurgy and has sufficient expertise and experience which is relevant to the style of mineralisation and to the type of deposit under consideration to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Doepel consents to the inclusion in the report of the matters based on his information in the form and context in which they appear.

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14.3 Derek Macauley

B.Sc. Hons (Chem Eng), CEng, FIChemE, FAusIMM, CSci, CPMet,

I, Derek Macauley, Technical Consultant and Director at ProMet Engineers Pty Ltd of 267 St Georges Terrace, Perth, WA declare the following:

1. I hold the following degree:

(a) B.Sc. (Honours) Chemical Engineering (1967) Nottingham University, England,

2. I am a registered professional of the following:

(a) AusIMM Chartered Professional, Metallurgy (CPMet.)

3. I am a Fellow of the following professional organisations:

(a) Institution of Chemical Engineers. UK (b) Australian Institute of Mining and Metallurgy

4. My contribution to the report entitled “Turquoise Moon Iron Project Competent Person’s Report” is based on my ironmaking metallurgical and processing knowledge and experience. I have over 30 years experience in the field of iron ore use and both conventional ironmaking (blast furnace route) and alternative ironmaking technologies.

5. I have no direct interest nor do I expect to receive any interest, direct or indirect, in the assets described in the above-named report or in the securities of Ferrum Crescent Pty Ltd. Also, I confirm I am otherwise independent of Ferrum Crescent Pty Ltd, its directors, employees and their advisers.

6. I am a director of a company that holds among other investments a small number of Ferrum Crescent shares.

7 Fees are being charged at commercial rates for the preparation of this report, the payment of which are not contingent upon the conclusions of this report nor upon the admission of the Ferrum Crescent Pty Ltd to AIM.

Signature

________________

Derek Macauley

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15. GLOSSARY

Al The chemical symbol for the metallic element aluminium.

Amphibolite A medium-grade metamorphic rock containing significant amounts of the mineral amphibole.

Archaean The oldest rocks of the Precambrian Era; older than about 2,500 million years.

Banded Iron Formation

Chemical sedimentary rock composed mainly of finely alternating layers of silica and iron oxide.

Beneficiation A process whereby extracted ore from mining is reduced to particles that can be separated into valuable minerals and waste, the former suitable for further processing or direct use.

Berm Flat sections on the batter slopes in open cut mines to control erosion.

BIF See Banded Iron Formation

BOO Build Own Operate

Burnt Lime Lime sand or limestone which has been calcined to calcium oxide.

Ca The chemical symbol for the metallic element calcium.

Calcining A thermal treatment process applied to ores and other solid materials in order to bring about a thermal decomposition, phase transition, or removal of a volatile fraction. The calcination process normally takes place at temperatures below the melting point of the product materials.

Calc-silicate A metamorphic rock consisting largely of carbonate and calcium bearing silicate minerals; formed by the metamorphism of carbonate sediments.

CBM See coal bed methane

CMS Cleaner Magnetic Separation

Coal bed methane

A fuel gas containing virtually 100% methane (CH4) produced from coal seam reservoirs.

Cogeneration Power generation utilising waste energy from another process

Colluvium Relatively recent, surficial, sheet-form deposits emplaced by sheet wash or gravity.

Concentrate The material produced by the process of concentration.

Concentration The process of upgrading ores from their run-of-mine state through the rejection of impurities by a variety of mineral processing techniques.

Concentrator The plant in which the process of concentration occurs.

COS Crushed Ore Stockpile

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Craton An old and stable part of the continental crust that has survived the merging and splitting of continents and supercontinents for at least 500 million years.

CRM Continental Resource Management Pty Ltd

Diamond (core) drilling

Method of obtaining cylindrical core of rock by drilling with a diamond-set or diamond-impregnated bit.

Dip The angle that a rock unit or structure makes with the horizontal.

Dolerite A dark-coloured, fine to medium-grained, mafic intrusive igneous rock.

DRI Direct Reduced Iron, also called sponge iron

EAF Electric Arc Furnace

ExplorationTarget

An occurrence of potentially economic mineralisation over which insufficient exploration has been carried out to enable sufficient quantification of the amount and grade for an estimation of a Mineral Resource to be made.

Fault A fracture in rock along which there has been relative displacement of the two sides.

Fe The chemical symbol for the metallic element iron.

Ferrum Ferrum Crescent Ltd

Filter cake The solid material produced from the filtering of a slurry.

Filtrate The liquid produced by the process of filtration.

Filtration The process of passing a slurry through a cloth to separate the solids from the liquid. The liquid passes through the cloth while the solids are entrained on the cloth surface in a cake-like material. The slurry may be induced to flow through the cloth by either pressure or vacuum.

Flowsheets Engineering diagrams used to show the basic steps in an industrial process.

Fold A bend in rock strata or structure.

Formation A formal name for an, often sedimentary, rock unit.

Fresh Zone The zone of the Earth's crust within which decomposition by air and ground water has not taken place.

Geostatistical The estimation of a mineral resource by means of the statistical analysis of the distribution of analytical values within the mineralised body using a software package

Geotechnics The study of rock mechanics and the physical properties and responses to stress of rock units; in particular in relation to mining and the stability of the walls of a mine.

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Gneiss High-grade metamorphic rock composed of alternating bands respectively rich in light and dark coloured minerals.

Grade (of metamorphism)

Expression of relative intensity of metamorphism (e.g. high-grade).

Grade (of mineralisation)

Expression of relative quality of mineralisation (e.g. high-grade) or of numerical quality (e.g. 1.2% Ni).

Granite A light coloured, relatively coarse-grained igneous rock formed at depth beneath the Earth’s surface; comprises large sections of continental crust.

Granulite A granular high-grade metamorphic rock formed as a result of extreme heat and pressure at depth beneath the Earth’s surface.

Green balls Round agglomerates of approximately 9 to 16 millimetres diameter formed by rolling fresh filter cake mixed with a small quantity of binder and water in a balling drum or balling disc.

Greenstone A field term for metamorphosed mafic and ultramafic igneous rocks.

Halco Wagon A type of open-hole percussion drilling.

Hematite Iron oxide in its fully oxidised form and having the chemical formula Fe2O3.

HPGR High Pressure Grinding Rolls

High Pressure Grinding Rolls

A process in which solid material particles are reduced in size principally through the mechanism of pressure.

Indicated Resource

That part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade, and mineral content can be estimated with a reasonable level of confidence.

Induration The process of drying and heat-hardening green balls at a maximum temperature of approximately 1300ºC to form fired pellets.

InferredResource

That part of a Mineral Resource for which tonnage, grade, and mineral content can be estimated with a low level of confidence.

ISCOR ISCOR Limited, previously, now split into Kumba Resources SA and Arcelor-Mittal SA.

JORC Code The Australasian Code for Reporting of Exploration Results, Mineral Resources, and Ore Reserves

K The chemical symbol for the metallic element potassium.

Limestone A sedimentary rock composed principally of the mineral calcium carbonate Lithology The characteristics of a rock; especially mineral content,, structure,

grainsize, and classification.

LMB Limpopo Mobile Belt

Magnetic Separation

A process used in concentration where a slurry is passed through a magnetic field and the magnetic portion of the solids is separated from the non-magnetic.

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Magnetite Iron oxide having the chemical formula Fe3O4 and having the property of being attracted to a low intensity magnet.

Marble A metamorphic rock consisting largely of calcium and or magnesium carbonate; formed by the metamorphism of limestone or dolomite.

MCWAP Mokolo Crocodile Water Augmentation Project

Metallurgy The science of the extraction or processing of metals

Metamorphism The process by which the minerals of rocks adjust to varying conditions of heat, pressure, and / or fluids within the Earth's crust.

Mg The chemical symbol for the metallic element magnesium.

Mineral Resource A concentration or occurrence of material of intrinsic economic interest in or on the Earth's crust in such form, quality, and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics, and continuity are known, estimated, or interpreted from specific geological evidence and knowledge.

Mineralisation The concentration of metals and their minerals within a body of rock.

Mineralogy The science of the study of minerals.

Mn The chemical symbol for the metallic element manganese.

Mobile Belt A long, relatively narrow crustal region within which intense folding, metamorphism, and igneous activity has taken place.

MPI Merchant Pig Iron

Na The chemical symbol for the metallic element sodium.

O The chemical symbol for the element oxygen.

OBM Ore Block Model

Ore Reserve The economically minable part of a Measured and/or Indicated Mineral Resource.

ORWRDP Olifants River Water Resource Development Project

Outcrop An exposure of bedrock at the surface.

Oxidation Near surface decomposition by exposure to the atmosphere and ground water.

Oxide Zone The near surface zone of the Earth's crust within which decomposition by air and ground water has taken place.

Oxidised A rock that has been exposed to air and water causing its minerals to change by the addition of oxygen (and perhaps carbon and water).

P The chemical symbol for the element phosphorous.

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Pegmatite Very coarse-grained igneous intrusive body, usually granitic and in dyke or sill form; may contain economically important minerals.

Pelletising The entire process of the production of fired pellets from a filter cake, including green balling and indurating.

Percussion drilling

A drilling method in which the drill bit breaks the rock by a hammering action.

Pig iron Usually refers to solid blast furnace iron produced by casting the liquid hot metal into ingots (pigs) using a pig caster. Also used to refer to solid iron produced in other melting or smelting processes. Contains approximately 95% Fe and 4% C.

Probable Ore Reserve

The economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. It includes diluting materials and allowances for losses which may occur when the material is mined. Appropriate assessments and studies have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors These assessments demonstrate at the time of reporting that extraction could reasonably be justified.

ProMet ProMet Engineers Pty Ltd

Quartz A mineral composed of silicon and oxygen; forms as hard colourless crystals; a common component of sand.

Quartzite A granular metamorphic rock composed predominantly of quartz; usually derived from quartz sandstone.

RC "Reverse Circulation"; a percussion drilling technique in which the cuttings are recovered through the drill rods thus minimising sample losses and contamination.

Resource A concentration or occurrence of material of intrinsic economic interest in or on the Earth's crust in such form, quality, and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics, and continuity are known, estimated, or interpreted from specific geological evidence and knowledge.

Reverse Circulation

A percussion drilling technique in which the cuttings are recovered through the drill rods thus minimising sample losses and contamination.

RHF Rotary Hearth Furnace

RMS Rougher Magnetic Separation

ROM Run of Mine

S The chemical symbol for the element sulphur.

Saprolite A soft clay-rich rock, formed in place by weathering of originally fresh rocks.

Schist A medium or coarse-grained metamorphic rock with a platy texture due to

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the subparallel orientation of micaceous minerals.

Semi-Autogenous Milling

The process of reduction of the size of solid material particles in a rotary grinding device where part of the grinding action arises from the impact of material particles on themselves and the balance of the grinding action arises from a grinding medium such as grinding balls.

Serpentinite A rock consisting predominantly of serpentine group minerals derived from the alteration of ultramafic igneous rocks.

Si The chemical symbol for the element silicon.

Silica One of the major impurities in iron ore, having the chemical formula SiO2.

Slurry A dense mixture of a liquid and a finely ground solid held in suspension.

Smelting (of iron ore)

Direct melting of iron ore without prior reduction. Melting and reduction takes place in a single step.

Tailings The stream of reject material from the process of concentration.

Terrain A regional-scale group of rocks and the area in which it occurs.

Tertiary The period of geological time between about 2 and 65 million years ago.

Thickening A process for increasing the density of a slurry by allowing the solids to settle in a large diameter, shallow, cylindrical tank. The dense material is drawn to the centre by rakes and withdrawn from the bottom, while the excess liquid overflows from the top of the tank.

Ti The chemical symbol for the metallic element titanium.

TMT Turquoise Moon Trading 157 (Pty) Ltd.

Twinned hole A second parallel drill-hole collared near toan original hole.

Weathering The processes by which rocks at or near the Earth’s surface change in mineralogical and chemical composition due to the action of air, water, plants, and temperature changes.

Zn The chemical symbol for the metallic element zinc

16. REFERENCES

1. du Pleiss G., Jonck G.J., & Kruger R., 1997, Potential low-grade iron ore deposits in metamorphosed banded iron formations, Northern Province, South Africa; Mineralium Deposita, 32: 362-370.

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140

ANNEXURE 2

PROSPECTING RIGHT

New order prospecting right 210/2006, registered as 34/2008PR, in the Administrative District of Polokwane, granted on 9 March 2006 for a period of three years and renewed from 8 March 2009 for another three  years, which renewal has, as required, been registered at the Mining Titles Offi ce under Reference Number MPT 33/2009.

The prospecting right was granted in respect of iron and manganese ore and has been granted over the following farms or portions of farms:

Moonlight:

(a) Goudafontein 76 LR;

(b) Portions 2, 3 and the Remaining Extent of Moonlight 111 LR; and

(c) Julietta 112 LR.

De Loskop:

(d) Lekkerlach 206 LR;

(e) the Remaining Extent and Portion 1 of Soho 204 LS;

(f) the Remaining Extent, the Remaining Extents of Portions 1, 2 and 3 and Portions 4 to 8 of Meanderthal 188 LS;

(g) Zandput 202 LS;

(h) Van Wyksput 201 LS;

(i) Westheim 191 LS;

(j) Trieste 192 LS; and

(k) the Remaining Extent and Portions 1 and 2 of Persie 200 LS,

all of which are situated in the Magisterial District of Polokwane in the Limpopo Province of South Africa measuring, collectively, 17 291.2 hectares.

An application for a mining right pertaining to iron and manganese ore, nickel, marble and limestone over the same ground has been submitted and the application formally accepted by the DMR on 25 June 2010.

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ANNEXURE 3

EXTRACTS FROM THE CONSTITUTION AND MEMORANDA OF INCORPORATION OF FERRUM CRESCENT AND ITS SUBSIDIARIES

Set out below are extracts from the constitution of Ferrum Crescent relating to the voting rights attaching to Ferrum Crescent securities:

Votes of members

“Voting at the general meeting

10.14 At any general meeting a resolution put to the vote of the meeting must be decided on a show of hands unless a poll is demanded:

(a) by the chairman;

(b) by not less than 5 Members having the right to vote at the meeting: or

(c) by a Member or Members present who are together entitled to not less than 5% of the total voting rights of all the Members having the right to vote as the resolution at the meeting.

A poll may be demanded:

(a) before a vote is taken;

(b) before the voting results on a show of hands are declared; or

(c) immediately after the voting results on a show of hands are declared.

Unless a poll is properly demanded, a declaration by the chairman that a resolution has on a show of hands been carried or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the book containing the minutes of the proceedings of the Company, is conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution provided that the declaration refl ects the show of hands and the votes of the proxies received.

Before a vote is taken the chairman must inform the meeting whether any proxy votes have been received and how the proxy votes are to be cast.

Questions decided by majority

10.15 Subject to the requirements of the Corporations Law in relation to special resolutions, a resolution is taken to be carried if the proportion that the number of votes cast in favour of the resolution exceeds one half of the total number of votes cast on the resolution.

Poll

10.16 If a poll is properly demanded, it must be taken in such manner and (subject to Clause 10.17) either at once or after an interval or adjournment or otherwise as the chairman directs, and the result of the poll is the resolution of the meeting at which the poll was demanded.

10.17 A poll is properly demanded on the election of a chairman or on a question of adjournment must be taken immediately.

10.18 The demand for a poll may be withdrawn.

Equality of votes

10.19 In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded, in addition to  the vote or votes (if any) to which the chairman may be entitled as a Member, proxy, representative or attorney, has a casting vote. The chairman has a discretion both as to the use of the casting vote and as to the way in which it was used.

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Entitlement to vote

10.20 Subject to any rights or restrictions for the time being attached to any class or classed of shares at general meetings of Members or classes of Members:

(a) each Member entitled to vote may vote in person or by proxy, attorney or representative;

(b) on a show of hands, every person present who is a Member or a proxy, attorney or representative of a Member has one vote;

(c) on a poll, every person present who is a Member or a proxy, attorney or representative of  a  Member  shall, in respect of each fully paid share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for the share, but in respect of partly paid shares, shall have a fraction of a vote for each partly paid share. The fraction must be equivalent to the proportion which the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited). In this Clause, amounts paid in advance of a call are ignored when calculati ng the proportion.

10.21 If a Member is present at any meeting of the Company and any one or more proxy, attorney or representative for such a Member is also present, or if more than one proxy, attorney or representative for a Member is present at any meeting of the Company then no such proxy, attorney or representative is entitled to vote on a show of hands and on a poll the vote of each one is of no effect unless each such person is appointed to represent a specifi ed proportion of the Member’s voting rights, not exceeding in the aggregate 100%.

Joint shareholder’s vote

10.22 In the case of joint holders of a share in the Company the vote of the senior who tenders a vote, whether in person or by proxy, attorney or representative, must be accepted to the exclusion of the votes of the other joint holders and, for this purpose, seniority is determined by the order in which the names stand in the Register.

Vote of shareholder of unsound mind

10.23 If a Member is of unsound mind or is a person whose person or estate is liable to be dealt with in any way under the law relating to mental health then the Member’s committee or trustee or such other person as properly has the management of the Member’s estate may exercise any rights of the Member in relation to a general meeting as if the committee, trustee or other person were a Member.

Effect of unpaid call

10.24 A Member is not entitled to vote at a general meeting in respect of those shares on which calls are outstanding; this restriction does not apply in respect of those shares on which no calls are outstanding.

Objection to voting qualifi cation

10.25 An objection may be raised to the qualifi cation of a voter only at the meeting or adjourned meeting at which the vote objected to is given or tendered.

10.26 Any such objection must be referred to the chairman of the meeting, whose decision is fi nal.

10.27 A vote not disallowed under such an objection is valid for all purposes.

Appointment of proxy

10.28 Appointment of proxy

(a) A Member of a Company who is entitled to attend and cast a vote at a meeting of the Company’s members may appoint a person as the member’s proxy to attend and vote for the member at the meeting.

(b) The appointment may specify the proportion or number of votes that the proxy may exercise.

(c) Each Member may appoint a proxy. If the Member is entitled to cast 2 or more votes at the meeting, they may appoint 2 proxies. If the Member appoints 2 proxies and the appointment does not specify the proportion or number of the Member’s votes each proxy may exercise, each proxy may exercise half of the votes.

(d) Disregard any fractions of votes resulting from the application of paragraphs (b) and (c).

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10.29 An Instrument appointing a proxy must be in writing under the hand of the appointer or of the appointer’s attorney duly authorised in writing or, if the appointer is a corporation, under seal. A Proxy need not be a member.

10.30 An instrument appointing a proxy may specify the manner in which the proxy is to vote in respect of  a  particular resolution and, where an instrument of proxy so provides, the proxy is not entitled to vote on the resolution except as specifi ed in the instrument.

10.31 An instrument appointing a proxy is deemed to confer authority to demand or join in demanding a poll.

10.32 An instrument appointing a proxy must

(a) Be in the form approved by the Directors from time to time and which complies with the Corporations Law; and

(b) Comply with the Listing Rules.

10.33 The Directors must issue with the notice of a meeting a form of proxy in blank as to the fi rst proxy but may include the name of any suggested alternative or other proxy.

Deposit of proxy and other instruments

10.34 An instrument appointing a proxy may not be treated as valid unless the instrument, and the power of attorney or other authority (if any) under which the instrument is signed or a copy or facsimile which appears on its face to be an authentic copy of that power or authority certifi ed as a true copy by the statutory declaration is or are received by the Company not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote at the Registered Offi ce or share registry of the Company or at such other place as is specifi ed for that purpose in the notice convening the meeting.

Validity of vote in certain circumstances

10.35 A vote given in accordance with the terms of an instrument of proxy or of a power of attorney is valid notwithstanding the previous death or unsoundness of mind of the principal, the revocation of the instrument (or of the authority under which the instrument was executed) or of the power, or the transfer in respect of which the instrument or power is given, if no imitation in writing of the death, unsoundness of mind, revocation or transfer had been received by the Company at its Registered Offi ce or share registry before the commencement of the meeting or adjourned meeting at which the instrument is used or the power is exercised.

Director entitled to notice of meeting

10.36 A Director is entitled to receive notice of and to attend all general meetings and all separate general  meetings of the holders of any class of shares in the Company and is entitled to speak at those meetings.”

Set out below are extracts from the constitution of Ferrum Crescent relating to the directors of Ferrum Crescent:

Qualifi cation, appointment and remuneration of directors and rotation of directors

“PART 11 THE DIRECTORS

Number and Appointment of Directors

11.1 The number of Directors must not be less than 3 nor more than 10 or such lesser number as the Directors determine provided that the number so determined must not be less than the number of Directors when the determination takes effect. The names of the fi rst Directors of the Company shall be the persons nominated with their consent in the application for registration of the Company or  the Directors in offi ce at the time of adoption of this Constitution will continue in offi ce subject to the provisions of this Constitution as the case may be.

11.2 The Company in general meeting may, by resolution, increase or reduce the number of Directors and may also determine in what rotation the increase or reduced number is to go out of offi ce.

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11.3 Subject to Clause 13.39 at the Annual General Meeting in every year one-third of the Directors for the time being, or, if their number is not 3 nor a multiple of 3, then the number nearest one-third, and any other Director not in such one-third who has held offi ce for three years or more (except the Managing  Director), must retire from offi ce.

11.4 A retiring Director is eligible for re-election.

11.5 The Directors to retire at any annual general meeting must be those who have been longest in offi ce since their last election, but, as between persons who became Directors on the same day, those to retire must (unless they otherwise agree among themselves) be determined by lot.

11.6 No Director except a Managing Director shall hold offi ce for a period in excess of three years or until the third annual general meeting following his appointment whichever is the longer without submitting himself for re-election.

Election of Directors

11.7 No Person other than a Director seeking re-election shall be eligible for election to the offi ce of the Director at any general meeting unless he or some Shareholder intending to propose him has not later than 5 Business Days after the date shown on the notice to the Home Exchange referred to in Clause 9.10(a), left at the Registered Offi ce a notice in writing duly signed by the nominee giving his consent to the nomination and signifying his candidature for the offi ce or the intention of such Shareholder to propose him. Notice of each and every candidature for election as a Director shall be given to each Shareholder with or as part of the notice of the Meeting at which the election is to take place. The Company shall observe the requirements of Section 201E of the Corporations Law with respect to the elections of the Directors.

11.8 Where the number of nominations for election as a Director exceeds the number of Directors who have or are to resign at the general meeting, the order in which the nominations are to be voted on shall be determined by drawing lots and once the relevant vacancies have been fi lled, no further nominations shall be voted on.

Qualifi cations of Directors

11.9 A Director is not required to hold any share in the Company.

11.10 A person of or over the age of 72 years may not be appointed or re-appointed as a Director, except pursuant to a resolution of the Company in accordance with the Corporations Law.

Remuneration of Directors

11.15 The Directors shall be paid out of the funds of the Company, by way of remuneration for their services as Directors, a sum not exceeding such fi xed sum per annum as may be determined by the Directors prior to the fi rst annual general meeting of the Company, to be divided among themselves and in default if agreement then in equal shares. The remuneration of the Directors shall not be increased except pursuant to a resolution passed at a general meeting of the Company where notice of the suggested increase shall have been given to Members in the notice convening the meeting. No non-executive Director shall be paid as part or whole of his remuneration a commission on or a percentage of profi ts or a commission on or a percentage of operating revenue, and no Executive Director shall be paid as whole or part of his remuneration a commission on or percentage of operating revenue.

11.16 The Directors’ remuneration is deemed to accrue from day-to-day.

11.17 If a Director, being willing, is called on to perform extra services or to make any special exertions in going or residing abroad or otherwise for the Company, the Company may remunerate that Director by payment of a fi xed sum determined by the Directors and that remuneration may be either in addition to or in substitution for that Director’s share in the remuneration provided for in Clause 11.15.

11.18 The Directors may also be paid all travelling and other expenses properly incurred by them in attending, participating in and returning from meetings of the Directors or any committee of the Directors or general meetings of the Company or otherwise in connection with the business of the Company.”

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Interests of Directors

“Directors’ interests

11.19 Subject to Clause 11.20 no Director is disqualifi ed by his offi ce from contracting with the Company whether as vendor purchaser or otherwise, nor shall any such contract or any contract or arrangement entered into by or on behalf of the Company in which any Director shall be in any way interested be avoided or prejudiced on that account, nor shall any Director be liable to account to the Company for any profi t arising from any such contract or agreement by reason only of such Director holding that offi ce or of the fi duciary relationship thereby established.

11.20 A director who has a material personal interest in a matter that relates to the affairs of the Company must give to the other directors notice of the interest unless such interest falls within the exception of Section 191(2) of the Corporation’s Law. The nature of this interest must be disclosed by the director at a directors’ meeting as soon as practicable after the relevant facts have come to his knowledge and such director must comply with the requirements of Sections 191, 192 and 195 of the Corporations Law.

11.21 Subject to the requirements of Sections 191 and 192 of the Corporations Law, a standing notice that a Director has an interest in any matter shall be a suffi cient disclosure under this Clause as regards the interest of the Director in any transactions relating to the matter and after such standing notice it shall not be necessary for such Director to give a special notice relating to any particular transaction relating to that matter.”

Powers and duties of the directors including borrowing powers of directors

“PART 12 POWERS AND DUTIES OF DIRECTORS

Directors to manage Company

12.1 Subject to the Corporations Law the Listing Rules and to any other provision of this Constitution the business of the Company is managed by the Directors, who may exercise all such powers of the Company as are not, by the Corporations Law or by this Constitution, required to be exercised by the Company in general meeting.

12.2 Without limiting the generality of Clause 12.1, the Directors may at any time:

(a) Exercise all the powers of the Company to borrow or raise money, to charge any property or business of the Company or all or any of its uncalled capital and to issue debentures or give any other security for a debt, liability or obligation of the Company or of any other person;

(b) Sell or otherwise dispose of the whole or any part of the assets, undertakings and other properties of the Company or any that may be hereafter acquired on such terms and conditions as they may deem advisable, but:

(i) The Company shall comply with the Listing Rules;

(ii) Any sale or disposal of the Company’s main undertaking shall only be made subject to the prior approval or ratifi cation of the sale or disposal by the Company in general meeting; and

(iii) On the sale or disposition of the Company’s main undertaking or on the liquidation of the Company, no commission or fee shall be paid to any Director or Directors or to any liquidator of the Company unless it shall have been ratifi ed by the Company in general meeting, with prior notifi cation of the amount of such proposed payments having been given to all Members at least 10 days prior to the meeting at which any such payment is to be considered; and

(c) Take any action necessary or desirable to enable the Company to comply with the Listing Rules.

12.3 The Directors may raise or secure the payment or repayment of moneys or any debt, liability or obligation in such manner and on such terms and conditions in all respects as they may determine and in particular by the issue of debentures, debenture stock (perpetual or otherwise), bonds, notes or other securities or debt instruments the payment of which may be charged on all or any part of the property of the Company (both present and future) including its uncalled capital for the time being.

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12.4 Debentures, debenture stock, bonds, notes or other securities or debt instruments may be made assignable free from any equities between the Company and the person to whom the same may be issued.

12.5 Any debentures, debenture stock, bonds, notes or other securities or debt instruments may be issued at the discretion of the Directors at a discount, premium or otherwise and with any special privileges as to redemption, surrender, drawings, allotment of shares, attending and voting at general meetings of the Company, appointment of Directors and otherwise.

Appointment of attorney

12.6 The Directors may, by power of attorney, appoint any person or persons to be attorney or attorneys of the Company for such purposes, with such powers, authorities and discretions (being powers, authorities and discretions vested in or exercisable by the Directors), for such period and subject to such conditions as they think fi t.

12.7 Any such power of attorney may contain such provisions for the protection and convenience of persons dealing with the attorney as the Directors think fi t and may also authorise the attorney to delegate all or any of the powers, authorities and discretions vested in the attorney.

Minutes

12.8 The Directors must cause minutes to be made:

(a) Of the names of the Directors present at or involved in all general meetings and all meetings of the Directors; and

(b) Of all proceedings of general meetings and of meetings of Directors;

(c) And cause those minutes to be entered, within one month after the relevant meeting is held, in the minute book.

12.9 The minutes referred to in Clause 12.8 must be signed by the chairman of the meeting at which the proceedings took place or by the chairman of the next succeeding meeting.

Execution of Company cheques etc.

12.10 All cheques, promissory notes, bankers’ drafts, bills of exchange and other negotiable instruments, and all receipts for money paid to the Company, must be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner and by such persons as the Directors determine from time to time.

Retirement Benefi ts for Directors

12.11 The Directors may at any time adopt any scheme or plan which they consider to be in the interest of the Company and which is designed to provide retiring or superannuation benefi ts for both present and future non-executive Directors, and they may from time to time vary and such scheme or plan. Any scheme or plan may be effected by agreements entered into by the Company with individual Directors, or by the establishment of a separate trust or fund, or in such other manner as the Directors consider proper. The Directors may attach such terms and conditions to any entitlement under any such scheme or plan as they think fi t, including, without limitation, a minimum period of service by a Director before the accrual of any entitlement and the acceptance by the Directors of a prescribed retiring age. No such scheme or plan shall operate to confer upon any Director or on any of the dependents of any Director any benefi ts exceeding those permitted by Section 200G of the Corporations Law, except with the approval of the Company in general meeting.

Securities to Directors

12.12 If the Director acting solely in his capacity as a Director of the Company shall become personally liable for the payment of any sum primarily due by the Company, the Directors may create any mortgage, charge or security over or affecting the whole or any part of the assets of the Company by way of indemnity to secure the persons to person so becoming liable from any loss in respect of such liability.”

147

Set out below are extracts from the constitution of Ferrum Metals relating to the directors of Ferrum Metals:

References to the Act in the clauses below refer to the Corporations Act.

“Appointment of directors

3. NUMBER OF DIRECTORS

3.1 The number of the directors must be not fewer than 1 or more than 9.

3.2 The Company in general meeting may by resolution increase the number of directors referred to in rule 3.1.

4. DIRECTORS’ QUALIFICATIONS

4.1 A director is not required to hold any share in the Company.

12. GENERAL BUSINESS MANAGEMENT

The business of the Company is to be managed by or under the direction of the directors.

12.2 The directors may exercise all the powers of the Company except any powers that the Act or this constitution requires the Company to exercise in general meeting.

12.3 A rule made or resolution passed by the Company in general meeting does not invalidate any prior act of the directors which would have been valid if that rule or resolution had not been made or passed.

12.4 For the purposes of section 187(a) of the Act, for as long as the Company is a wholly-owned subsidiary of another body corporate, directors are hereby expressly authorised to act in the interests of that holding company.

25. PAYMENT OF REMUNERATION

To the extent that directors are not employed as executives of the Company or any related body corporate of the Company, the directors are to be paid the remuneration that the Company determines by resolution. Persons who are employed as executives of the Company or any related body corporate of the Company are not to receive any additional remuneration by virtue of being directors of the Company.

The Company determines by resolution only the total remuneration to be paid to the directors, and  the  directors determine how the total remuneration is divided among them.

The remuneration of directors accrues daily.”

Borrowing powers of directors

“13. BORROWING POWERS

13.1 Without limiting the generality of rule 0, the directors may exercise all the powers of the Company to borrow money, to charge any property or business of the Company or all or any of its uncalled capital and to issue debentures or give any other security for a debt, liability or obligation of the Company or of any other person.”

Set out below are extracts from the constitution of Batavia relating to the directors of Batavia:

“20. APPOINTMENT OF DIRECTORS

(a) The directors of the company shall be such persons as may be appointed from time to time by ordinary resolution or by notice to the company signed by the holder or holders for the time being of the majority of those shares with voting rights in the capital of the company but so that the total number of directors shall not at any time exceed the number fi xed pursuant to paragraph 22.

(b) The directors of the company may be appointed by a single resolution appointing 2 or more persons as directors without the need for a prior separate unanimous resolution.

21. QUALIFICATION OF DIRECTORS

No director shall be required to hold shares in the company to qualify him for appointment.

148

22. NUMBER OF DIRECTORS

The Board of Directors shall consist of a minimum of 2 directors and a maximum of 6 directors who shall be appointed by the shareholders in general meeting. The company may by ordinary resolution increase or reduce the number of directors.

26. REMUNERATION OF DIRECTORS

The remuneration of directors shall be determined by the directors, and approved by an ordinary resolution.”

Set out below are extracts from the memoranda of incorporation of Nelesco and TMT:

References to the Act in the clauses below refer to the Companies Act.

Directors

5. DIRECTORS AND OFFICERS

5.1 Composition of the board

5.1.1 The board shall comprise not less than four directors, to be elected by the shareholders or otherwise by the board on the basis set out in this clause 5.

5.1.2 Each incorporator of the Company is a fi rst director, and serves until suffi cient other directors to satisfy the minimum requirements of the Act and/or this MOI have been appointed or elected.

5.1.3 Subject to 5.1.7, each director, other than the fi rst directors and any directors appointed in this MOI, must be elected by the persons entitled to exercise voting rights in such an election to serve for a term as set out in this MOI provided that a director may not serve for an indefi nite period.

5.1.4 In any election of directors, the election is to be conducted as a series of votes, each of which is on the candidacy of a single individual to fi ll a single vacancy.

5.1.5 In each vote to fi ll a vacancy, each voting right entitled to be exercised may be exercised once and the vacancy is fi lled only if a majority of the voting rights exercised are in support of the candidate.

5.1.6 There are no ex offi cio directors in addition to any directors appointed in terms of this MOI and the elected directors.

5.1.7 The authority of the board to fi ll any vacancy on the board on a temporary basis is not restricted or varied by this MOI, save that:

5.1.7.1 if the number of directors falls below the minimum number specifi ed in clause 5.1.1, the remaining directors shall as soon as possible, and in any event not later than three months from the date the number of directors fell below the prescribed minimum, fi ll the vacancies or call a general meeting for the purpose of fi lling the vacancies. The failure of the Company to have the prescribed minimum number of directors:

5.1.7.1.1 during the aforementioned three month period shall not limit or negate the authority of the board or invalidate anything done by the board or the Company;

5.1.7.1.2 after the expiry of the aforementioned three month period, shall result in the remaining directors only being permitted to act for the purposes of fi lling vacancies on the board or calling general meetings of shareholders;

5.1.7.2 any appointment must be ratifi ed by an ordinary resolution at the next annual general meeting of the shareholders of the Company. A director appointed on a temporary basis has all the powers, functions and duties, and is subject to all the liabilities, of any other director.

5.1.8 The period to be allowed before the date of a general meeting or annual general meeting for the nomination of a new director must be such as to give suffi cient time after the receipt of the notice for nominations to reach the Company’s offi ce from any part of South Africa.

5.1.9 Directors may not be elected at a meeting conducted in terms of section 60.

149

5.1.12 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, the Company. In such event the appointment and remuneration of such a director shall be determined by a disinterested quorum of directors.

5.1.13 The directors shall be entitled to be paid all their travelling and other expenses properly and necessarily incurred by them in and about the business of the Company and in attending meetings of the board or any of its committees. Any director required to perform additional services or to reside abroa d in the course of his or her service to the Company or to perform any special business on behalf of the Company, shall be entitled to receive such remuneration as is determined by a disinterested quorum of directors, which may be either in addition to or in substitution for any other remuneration payable to that director.

5.1.14 At the Company’s annual general meeting at least one-third of the non-executive directors must retire at the Company’s annual general meeting or other meetings on an annual basis provided that the meeting is not conducted in terms of section 60 of the Act. Such retiring directors of the board may be re-elected provided that they are eligible. The Board shall be entitled to recommend those directors it considers to be eligible taking into account past performance as directors and their contribution as such.

Qualifi cation of directors

5.1.10 To become or to continue to act as a director or a prescribed offi cer of the Company, a person must not be:

5.1.10.1 a juristic person;

5.1.10.2 an unemancipated minor, or a person under a similar legal disability;

5.1.10.3 a person who has been declared a delinquent or placed under probation by a court in terms of section 162, or in terms of section 47 of the Close Corporations Act, 1984, except to the extent permitted by the order of probation;

5.1.10.4 an unrehabilitated insolvent;

5.1.10.5 prohibited in terms of any public regulation to be a director;

5.1.10.6 removed from an offi ce of trust, on the grounds of misconduct involving dishonesty;

5.1.10.7 a person who has been convicted, in the Republic or elsewhere, and imprisoned without the option of a fi ne, or fi ned more than the prescribed amount, for theft, fraud, forgery, perjury or any offence:

5.1.10.7.1 involving fraud, misrepresentation or dishonesty;

5.1.10.7.2 in connection with the promotion, formation or management of a  company, or in connection with having been appointed or elected as  a  director or acting as a director or consenting to be appointed or elected as a director whilst being ineligible or disqualifi ed to be a director, or in connection with serving as director having been placed under probation by a court in terms of section 162, or in terms of section 47 of the Close Corporations Act, 1984 (except to the extent permitted by the order of probation); or

5.1.10.7.3 under the Act, the Insolvency Act, 1936, the Close Corporations Act, 1984, the Competition Act, 1998, the Financial Intelligence Centre Act, 2001, the Securities Services Act, 2004, or Chapter 2 of the Prevention and Combating of Corruption Activities Act, 2004.

5.1.11 A person need not satisfy any further eligibility requirements or qualifi cations.

Remuneration of directors

5.6 Directors’ remuneration and fi nancial assistance to directors

5.6.1 The authority of the Company to pay remuneration to the directors in the form of directors’ fees, in accordance with a special resolution approved by the shareholders within the previous two years, is not restricted or varied by this MOI.

5.6.2 The authority of the board to authorise the Company to provide direct or indirect fi nancial assistance to a director or prescribed offi cer of the Company or a related or inter-related company, or to a related or inter-related company or corporation, or to a member

150

of a  related or inter-related company or corporation, or to a person related to any such person or entity, subject to the provisions of section 45(3), is not restricted or varied by this MOI.

5.6.3 “Financial assistance” for purposes of 5.6.2:

5.6.3.1 includes lending money, guaranteeing a loan or other obligation and securing any debt or obligation;

5.6.3.2 but does not include:

5.6.3.2.1 lending money in the ordinary course of business of the Company if its primary business is the lending of money;

5.6.3.2.2 an accountable advance to meet legal expenses in relation to a matter concerning the Company or anticipated expenses to be incurred by the person on behalf of the Company; or

5.6.3.2.3 an amount to defray a person’s expenses for removal at the Company’s request.

Borrowing powers of directors

5.5 Directors’ power to affect borrowing

The board may raise or borrow from time to time for the purposes of the Company, or secure the payment, of such sums as they think fi t and may secure the repayment or payment of any such sums by guarantee, bond or mortgage upon all or any of the property or assets of the Company or  by the issue of debt instruments or otherwise as they may think fi t; provided that the amount so borrowed, raised or secured may not exceed the amount authorised by its holding company listed on the JSE.

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ANNEXURE 4

CORPORATE GOVERNANCE

Ferrum Crescent and the directors recognise the importance of corporate governance to the effective management of Ferrum Crescent and to the protection of its shareholders. Ferrum Crescent’s approach to the corporate governance of the group is designed with a view to ensuring that the business and affairs of Ferrum Crescent are effectively managed so as to enhance shareholder value. The board fulfi ls its mandate directly and through its committees at regularly scheduled meetings or as required. The directors are kept informed of Ferrum Crescent’s operations at regular meetings and through reports and discussions with management on matters within their particular areas of expertise. Ferrum Crescent complies with the QCA  Guidlines but  not the King Code on corporate governance.

Board structure

The board consists of two executive directors and four non-executive directors of whom three are considered by the board to be independent as defi ned by the JSE Listings Requirements, the ASX and the QCA Guidelines. The Chairman is responsible for leadership of the board, for the effi cient organisation and conduct of the board’s function and for the briefi ng of all directors in relation to issues arising at board meetings. The board also comprises an independent fi nancial director.

The Chairman is also responsible for shareholder communication and arranging board performance evaluation. The Chairman is expected to facilitate the effective contribution of all directors and promote constructive and respectful relations between directors and between the board and senior management. The board has established an audit committee, a remuneration committee and a nomination committee.

The current Chairman is not an independent director. Given the business and organisational structure of the company, the board is strongly of the opinion that the role of Chairman should be an executive position at this time. The board continues to review this situation on a regular basis.

Independent directors

The board determines whether each of the non-executive directors of the company is independent on a regular basis in accordance with its Policy on Assessing the Independence of Directors in accordance with the ASX Guidelines. The board recognises the importance of the appropriate balance between independent and non-independent representation on the board. In making this determination, the board takes into account the skills and experience required, in the context of the company’s operations and activities.

The independent directors may meet without other directors present, if appropriate. The non-executive directors may meet without senior management present at times scheduled from time to time. Such meetings may be facilitated by the Chairman or the lead independent director, as appropriate.

Audit committee

The primary role of the audit committee is to monitor the integrity of the fi nancial statements of the company, including its annual, half-yearly and quarterly reports, interim management statements and any other formal announcement relating to its fi nancial performance, reviewing signifi cant fi nancial reporting issues and judgements that they contain. The audit committee must also review summary fi nancial statements, signifi cant fi nancial returns to regulators and any fi nancial information contained in certain other documents, such as announcements of a price sensitive nature.

The audit committee must at all times comprise at least two members of the board and must meet at least once a year. The audit committee comprises Grant Button (as chairman), Klaus Borowski and Ted Droste.

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Remuneration committee

The function of the committee is to assist the board in fulfi lling its corporate governance responsibilities with respect to remuneration by reviewing and making appropriate recommendations on:

(a) remuneration packages of executive directors, non-executive directors and senior executives; and

(b) employee incentive and equity-based plans including the appropriateness of performance hurdles and total payments proposed.

The remuneration committee must meet at least once a year and currently comprises Klaus Borowski (as chairman), Grant Button and Ted Droste.

Nomination committee

The nomination committee will have responsibility for making recommendations to the board on the composition of the board and will review regularly the structure, size and composition (including the skills, knowledge and experience) of the board and its committees. This committee will make recommendations to the board on retirements and appointments of additional and replacement directors. The committee will meet on an ad hoc basis but must meet at least once a year.

In exercising this role, the nomination committee shall have regard to the recommendations set out in the QCA Guidelines and currently comprises Grant Button (as chairman), Ted Droste and Kofi Morna.

Share dealing code

The company has adopted a code for directors’ dealings, which the directors consider is appropriate for a company whose shares are listed on the ASX, AIM and the JSE and will take all reasonable steps to ensure compliance by the directors and any relevant employees.

153

ANNEXURE 5

EXTRACTS OF CONSOLIDATED HISTORICAL FINANCIAL INFORMATION OF FERRUM CRESCENT AND ADDITIONAL INFORMATION REQUIRED BY THE JSE

I. EXTRACTS OF HISTORICAL FINANCIAL INFORMATION

Consolidated Statement of Comprehensive Incomefor the period 1 July 2010 to 30 June 2011

2011 2010(i)

Notes $ $

Revenue 3(a) 149,717 15,960Other income 3(b) 1,265,242 5,378

Revenue and other income 1,414,959 21,338Administration expenses 3(c) (3,523,878) (2,325,649)Occupancy expenses (173,271) (106,055)Loss on revaluation of fi nancial liability 14 (1,623,385) –Exploration expenditure (3,014,345) (1,282,190)Foreign exchange gain/(loss) 479,656 (118,821)Share -based payments 20 (1,701,530) –Goodwill on consolidation written off – (2,019,188)Impairment of available -for -sale investments – (1,573,981)

Loss before income tax (8,141,794) (7,404,546)Income tax benefi t/(expense) 5 – –

Net loss after income tax (8,141,794) (7,404,546)

Other comprehensive income:

Foreign currency translation gain 4,397 26,235Net fair value gains on available -for -sale investments 665,242 –Income tax on items of other comprehensive income (199,573) –Release of unrealised gains reserve on disposal of available forsale investments (net of tax) (465,669) –

Other comprehensive income (net of tax) 4,397 26,235

Total comprehensive loss for the period (8,137,397) (7,378,311)

Loss for the period is attributable to:Non-controlling interest – –Owners of the parent (8,141,794) (7,404,546)

(8,141,794) (7,404,546)

Total comprehensive loss for the period attributable to:

Non-controlling interest – –Owners of the parent (8,137,397) (7,378,311)

(8,137,397) (7,378,311)

Loss per share attributable to the ordinary equity holders Cents Centsof the Company:

Basic loss per share 8 (3.32) (5.86)

Diluted loss per share (3.32) (5.86)

(i) For the period 1 March 2009 to 30 June 2010. Refer to note 2(e) for further details.

The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

154

Consolidated Statement of Financial PositionAs at 30 June 2011

2011 2010 Notes $ $

ASSETS

Current assets

Cash and cash equivalents 9 8,116,009 529,225Receivables 10 283,725 141,790Available-for-sale investments 11 – 909,678Other fi nancial assets 42,842 –Pre-payments 31,580 –

Total current assets 8,474,156 1,580,693

Non-current assets

Plant and equipment 12 146,913 7,578

Total non-current assets 146,913 7,578

Total assets 8,621,069 1,588,271

LIABILITIES

Current liabilities

Trade and other payables 13 2,099,706 550,024Financial Liability 14 8,416,623 –Provisions 15 6,794 10,474Loans and borrowings 50 11,246

Total current liabilities 10,523,173 571,744

Total liabilities 10,523,173 571,744

NET ASSETS (1,902,104) 1,016,527

Equity

Contributed equity 16 27,392,728 12,146,950Accumulated losses 19 (20,517,734) (12,375,940)Reserves 18 (8,777,098) 1,245,517

PARENT INTEREST (1,902,104) 1,016,527

NON-CONTROLLING INTEREST – –

TOTAL EQUITY (1,902,104) 1,016,527

This Statement of Financial Position is to be read in conjunction with the accompanying notes.

155

Consolidated Statement of Cash Flowsfor the period 1 July 2010 to 30 June 2011

2011 2010 (i)

Notes $ $

Cash fl ows from operating activities

Interest received 149,608 15,960Other 109 –Proceeds from sale of tenements 600,000 –Exploration expenditure (3,177,214) (1,079,582)Payments to suppliers and employees (2,668,257) (1,857,090)

Net cash fl ows used in operating activities 25 (5,095,754) (2,920,712)

Cash fl ows from investing activities

Payments for/( purchase) of plant and equipment (158,702) (12,122)Proceeds from disposal of available -for -sale investments 1,574,920 389,855Cash acquired on acquisition of Ferrum Crescent Limited – 877,942Payments for purchase of non-controlling interest (3,237,830) –

Net cash fl ows (used in)/provided by investing activities (1,821,612) 1,255,675

Cash fl ows from fi nancing activities

Proceeds from issue of shares 16,688,656 2,260,098Receipts/(Payments) from unsecured loans (11,196) 11,246Costs associated with issue of shares (1,952,783) (127,645)

Net cash fl ows provided by fi nancing activities 14,724,677 2,143,699

Net increase in cash and cash equivalents held 7,807,311 478,662Impact of foreign exchange on cash held (220,527) –Cash and cash equivalents at the beginning of the period 529,225 50,563

Cash and cash equivalents at the end of the period 9 8,116,009 529,225

(i) For the period 1 March 2009 to 30 June 2010. Refer to note 2(e) for further details.

The above Statement of Cash Flows should be read in conjunction with the accompanying notes.

156

Consolidated Statement of Changes in Equityfor the period 1 July 2010 to 30 June 2011

Share- Accumu- based Foreign Issued lated payment Option exchange Equity Total capital losses reserve reserve reserve reserve equity $ $ $ $ $ $ $

At 1 March 2009 3,387,875 (4,971,394) – 1,136,062 83,220 – (364,237)Loss for the period – (7,404,546) – – – – (7,404,546)Other comprehensive income (net of tax) – – – – 26,235 – 26,235

Total comprehensive loss (net of tax) – (7,404,546) – – 26,235 – (7,378,311)

Transactions with owners in their capacity as owners:

Shares issued 8,940,886 – – – – – 8,940,886Transaction costs on shares issued (181,812) – – – – – (181,812)

At 1 July 2010 12,146,950 (12,375,940) – 1,136,062 109,455 – 1,016,527

Loss for the period – (8,141,794) – – – – (8,141,794)Other comprehensive income (net of tax) – – – – 4,397 – 4,397

Total comprehensive loss (net of tax) – (8,141,794) – – 4,397 – (8,137,397)

Transactions with owners in their capacity as owners:

Shares issued during the year:Shares issued 16,619,411 – – – – – 16,619,411Transaction costs on shares issued (1,952,783) – – – – – (1,952,783)Shares issued under employee share plan 579,150 – (238,548) – – – 340,602Employee share plan loan repaid – 69,245 – – 69,245Share-based payment to locally impacted community – – – – – 1,092,565 1,092,565Options issued under employee option plan – – – 268,363 – – 268,363Acquisition of non-controlling interest – – – – – (11,218,637) (11,218,637)

At 30 June 2011 27,392,728 (20,517,734) (169,303) 1,404,425 113,852 (10,126,072) (1,902,104)

The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.

157

Notes to the fi nancial statements

Note 1: Corporate information

The consolidated fi nancial report of Ferrum Crescent for the year ended 30 June 2011 was authorised for issue in accordance with a resolution of directors on 8 September 2011.

Ferrum Crescent Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Stock Exchange (ASX) and the London Stock Exchange (AIM).

The nature of operations and principal activities of the Group are described in the director’s report.

Note 2: Statement of signifi cant accounting policies

(a) Basis of preparation

The fi nancial report is a general purpose fi nancial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Accounting Standards and Interpretations and complies with other requirements of the law.

The accounting policies detailed below have been consistently applied to all of the years presented unless otherwise stated. The fi nancial statements are for the consolidated entity consisting of Ferrum Crescent Limited and its subsidiaries.

The fi nancial report has also been prepared on a historical cost basis, except for available-for-sale investments and derivative fi nancial instruments which have been measured at fair value.

The fi nancial report is presented in Australian dollars.

The company is a listed public company, incorporated in Australia and operating in Australia and South Africa. The entity’s principal activities are mineral exploration.

(b) Statement of compliance

The fi nancial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the fi nancial report, comprising the fi nancial statements and notes thereto, complies with International Financial Reporting Standards (IFRS).

(c) Adoption of new and revised standards

The following amending Standards relevant to the operations of the Group have been adopted from 1 July 2010. Adoption of these Standards did not have any effect on the fi nancial position or performance of the Group:

• AASB 2009-5 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 5, 8, 101, 107, 117, 118, 136 and 139];

• AASB 2009-8 Amendments to Australian Accounting Standards – Group Cash-Settled Share-based Payment Transactions [AASB 2], effective 1 January 2010;

• AASB 2009-10 Amendments to Australian Accounting Standards – Classifi cation of Rights Issues [AASB 132], effective 1 February 2010;

• AASB 2009-13 Amendments to Australian Accounting Standards arising from Interpretation 19 [AASB 1] effective 1 July 2010;

• AASB 2010-3 Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 3, AASB 7, AASB 121, AASB 128, AASB 131, AASB 132, AASB 139], effective 1 July 2010; and

• Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments.

The adoption of these standards did not have any impact on the current period or any prior period and  is  not  likely to affect future periods.

158

Notes to the fi nancial statements (continued)

Note 2: Statement of signifi cant accounting policies (continued)

(d) Accounting Standards and Interpretations issued but not yet effective

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective and have not been adopted by the Group for the year ended 30 June 2011. These are outlined in the table below.

Application Application date of date forReference Title Summary of change standard Group

AASB 2009-11 Amendments to These amendments arise from the issuance 1 January 1 July Australian Accounting of AASB 9 Financial Instruments that sets out 2013 2013 Standards arising from requirements for the classifi cation and AASB 9 (AASB 1, 3, 4, 5, measurement of fi nancial assets. The requirements 7, 101, 102, 108, 112, 118 in AASB 9 form part of the fi rst phase of the 121, 127, 131, 132, 136, ASB’s project to replace IAS 39 Financial 139, 1023 and 1038 and Instruments: Recognition and Measurement. Interpretations 10 and 12 This Standard shall be applied when AASB 9 is applied.

AASB 9 Amendments to Australian AASB 9 includes requirements for the 1 January 1 July Financial Accounting Standard – classifi cation and measurement of fi nancial 2013 2013Instruments Financial Instrument and assets resulting from the fi rst part of Phase 1 its associated amending of the IASB’s project to replace IAS 39 standards Financial Instruments: Recognition and Measurement (AASB 139 Financial Instruments: Recognition and Measurement). These requirements improve and simplify the approach for classifi cation and measurement of fi nancial assets compared with the requirements of AASB 139. The main changes from AASB 139 are described below.

Financial assets are classifi ed based on: (1) the objective of the entity’s business model for managing the fi nancial assets and (2) the characteristics of the contractual cash fl ows. This replaces the numerous categories of fi nancial assets in AASB 139, AASB 139, each of which had its own classifi cation criteria.

AASB 9 allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profi t or loss and there is no impairment or recycling on disposal of the instrument.

Financial assets can be designated and measured at fair value through profi t or loss at initial recognition if doing so eliminates or signifi cantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities, or recognising gains and losses on them, on different bases.

AASB 124 Related Party The revised AASB 124 simplifi es the defi nition 1 January 1 July (Revised) Disclosures of a related party, clarifying its intended meaning 2011 2011 (December 2009) and eliminating inconsistencies from the defi nition, including: (a) the defi nition now identifi es a subsidiary and an associate with the same investor as related parties of each; (b) entities signifi cantly infl uenced by one person and entities signifi cantly infl uenced by a close member of the family of that person are no longer related parties of each other; and (c) the defi nition now identifi es that whenever a person or entity has both joint control over a second entity and joint control or signifi cant infl uence over a third party, the second and third entities are related to each other.

A partial exemption is also provided from the disclosure requirements for government-related entities. Entities that are related by virtue of being controlled by the same government can provide reduced related party disclosures.

159

Notes to the fi nancial statements (continued)

Note 2: Statement of signifi cant accounting policies (continued)

(d) Accounting Standards and Interpretations issued but not yet effective (continued)

Application Application date of date forReference Title Summary of change standard Group

AASB 2010-4 Further Amendments Emphasises the interaction between quantitative 1 January 1 July to Australian Accounting and qualitative AASB 7 disclosures and the nature 2011 2011 Standards arising from the and extemt of risks concerned with fi nancial Annual Improvements instruments. Project (AASB 1, AASB 7, AASB 101, AASB 134 and Clarifi es that an entity will present an analysis interpretation 13) of other comprehensive income for each component of equity, either in the statement of changes in equity or in the notes to the fi nancial statements.

Provides guidance to illustrate how to apply disclosure principles in AASB 134 for signifi cant events and transactions.

Clarifi es that when the fair value of ward credits is measured based on the value of the awards for which they could be redeemed, the amount of discounts or incentives otherwise granted to customers not participating in the award credit scheme, is to be taken into account.

AASB 2010-5 Amendments to This Standard makes numerous editorial 1 January 1 July Australian Accounting amendments to a range of Australian 2011 2011 Standards ( AASB 1, 3, Accounting Standards and Interpretations, 4, 5, 101, 107, 112, 118, including amendments to refl ect changes 119, 121, 132, 133, 134, made to the text of IFRS by the IASB. 137, 139, 140, 1023 & 1038 and Interpretations These amendments have no major impact 112, 115, 127, 132 and on the requirements of the amended 1042) pronouncements.

AASB 2010-6 Amendments to The amendments increase the disclosure 1 January 1 July Australian Accounting requirements for transactions involving 2011 2011 Standards – Disclosures transfers of fi nancial assets. They require on Transfers of Financial enhancements to the existing disclosures Assets (AASB 1) in IFRS 7 where an asset is transferred but is not derecognised and introduce new disclosures for assets that are derecognised but the entity continues to have exposure to the asset after the sale.

AASB 2010-7 Amendments to The requirements for classifying and 1 January 1 July Australian Accounting measuring fi nancial liabilities were added 2013 2013 Standards arising from to AASB 9. The existing requirements for AASB 9 (December 2010) the classifi cation of fi nancial liabilities and the ability to use the fair value option have been retained. However, where the fair value option is used for fi nancial liabilities the change in fair value is accounted for as follows:

The change attributable to changes in credit risk is presented in other comprehensive income.

The remaining change is presented in profi t or loss. If this approach creates or enlarges an accounting mismatch in the profi t or loss, the effect of the changes in credit risk are also presented in profi t or loss.

160

Notes to the fi nancial statements (continued)

Note 2: Statement of signifi cant accounting policies (continued)

(d) Accounting Standards and Interpretations issued but not yet effective (continued)

Application Application date of date forReference Title Summary of change standard Group

AASB 1053 Application of Tiers of This Standard establishes a different fi nancial 1 July 1 July Australian Accounting reporting framework consisting of two Tiers 2013 2013 Standards of reporting requirements for preparing general purpose fi nancial statements:

(a) Tier 1: Australian Accounting Standards

(b) Tier 2: Australian Accounting Standards – Reduced Disclosure Requirements

Tier 2 comprises the recognition, measurement and reduced disclosures corresponding to those requirements. The following entities apply Tier 1 requirements in preparing general purpose fi nancial statements:

(a) For-profi t entities in the private sector that have public accountability (as defi ned in this Standard).

(b) The Australian Government and State, Territory and Local Governments.

The following entities apply either Tier 2 or Tier 1 requirements in preparing general purpose fi nancial statements:

(a) For-profi t private sector that do not have public accountability.

(b) All not-for-profi t private sector entities, Public sector entities other than the Australian Government and State, Territory and Local Governments.

AASB 1054 Australian Additional This standard is as a consequence of phase 1 1 July 1July Disclosures of the joint Trans-Tasman Convergence project 2011 2011 of the AASB and FRSB

This standard relocates all Australian specifi c disclosures from other standards to one place and revises disclosures in the following areas:

(a) Compliance with Australian Accounting Standards.

(b) The statutory basis or reporting framework for fi nancial statements.

(c) Whether fi nancial statements are general purpose or special purpose.

(d) Audit fees.

(e) Imputation credits.

Fair Value IFRS 13 establishes a single source of guidance 1 January 1 July Measurement under IFRS for determining the fair value of 2013 2013 IFRS 13 assets and liabilities. IFRS 13 does not change when an entity is required to use fair value, but rather, provides guidance on how to determine fair value under IFRS when fair value is required or permitted by IFRS. Application of this defi nition may result in different fair values being determined for the relevant assets.

IFRS 13 also expands the disclosure requirements for all assets and liabilities carried at fair value. This includes information about assumptions made and the qualitative impact of those assumptions on the fair value determined.

AASB 10 Consolidated AASB 10 establishes a new control model that 1 January 1 July Financial applies to all entities. It replaces parts of 2013 2013 Statements AASB 127 Consolidated and Separate Financial Statements dealing with the accounting for consolidated fi nancial statements and Interpretation 112 Consolidation – Special Purpose Entities.

161

Notes to the fi nancial statements (continued)

Note 2: Statement of signifi cant accounting policies (continued)

(d) Accounting Standards and Interpretations issued but not yet effective (continued)

Application Application date of date forReference Title Summary of change standard Group

ASSB 10 Consolidated The new control model broadens the situations Financial when an entity is considered to be controlled by Statements another entity and includes new guidance for (continued) applying the model to specifi c situations, including when acting as a manager may give control, the impact of potential voting rights and when holding less than a majority voting rights may give control. This is likely to lead to more entities being consolidated into the group.

AASB 11 Joint Arrangements AASB 11 replaces AASB 131 Interests in Joint 1 January 1 July Ventures and Interpretation 113 Jointly-controlled 2013 2013 Entities – Non-monetary Contributions by Ventures. AASB 11 uses the principle of control in AASB 10 to defi ne joint control, and therefore the determination of whether joint control exists may change. In addition AASB 11 removes the option to account for jointly controlled entities (JCEs) using proportionate consolidation. Instead, accounting for a joint arrangement is dependent on the nature of the rights and obligations arising from the arrangement. Joint operations that give the venturers a right to the underlying assets and obligations themselves is accounted for by recognising the share of those assets and obligations. Joint ventures that give the venturers a right to the net assets is accounted for using the equity method. This may result in a change in the accounting for the joint arrangements held by the group.

AASB 12 Disclosure of AASB 12 includes all disclosures relating to an 1 January 1 July Interests in entity’s interests in subsidiaries, joint arrangements, 2013 2013 Other Entities associates and structures entities. New disclosures have been introduced about the judgements made by management to determine whether control exists, and to require summarised information about joint arrangements, associates and structured entities and subsidiaries with non-controlling interests.

AASB 2011-7 Amendments to Consequential amendments to AASB 127 Separate 1 January 1 July Australian Accounting Financial Statements and AASB 128 Investments 2013 2013 Standards arising from in Associates as a result of the adoption of AASB 10 the Consolidation and Consolidated Financial Statements, AASB 11 Joint Joint Arrangement Arrangements and AASB 12 Disclosure of Interests Standards in Other Entities.

The impact of the adoption of these new and revised standards and interpretations has not been determined by the Group.

(e) Basis of consolidation

The fi nancial statements of the subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies.

In preparing the consolidated fi nancial statements, all intercompany balances and transactions, income and expenses and profi t and losses resulting from intra-group transactions have been eliminated in full.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. Control exists where the company has the power to govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing when the Group controls another entity.

162

Notes to the fi nancial statements (continued)

Note 2: Statement of signifi cant accounting policies (continued)

(e) Basis of consolidation (continued)

Business combinations have been accounted for using the acquisition method of accounting (refer note 27)

Unrealised gains or transactions between the Group and its associates are eliminated to the extent of the Group’s interests in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Non-controlling interests represent the portion of profi t or loss and net assets in subsidiaries not held by the Group and are presented separately in the statement of comprehensive income and within equity in the consolidated statement of fi nancial position. Losses are attributed to the non-controlling interests even if that results in a defi cit balance.

The group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to refl ect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised within equity attributable to owners of  Ferrum Crescent Limited.

When the group ceases to have control, joint control or signifi cant infl uence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profi t or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint controlled entity or fi nancial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in  other comprehensive income are reclassifi ed to profi t or loss.

Where appropriate prior year disclosures have been reclassifi ed for consistency with current year classifi cations. The re-classifi cation has not impacted the net profi t/(loss) for the prior year.

(f) Critical accounting estimates and judgements

The application of accounting policies requires the use of judgements, estimates and assumptions about carrying values 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 are recognised in the period in which the estimate is revised if it affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Share-based payment transactions:

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an external valuer using a Binomial model, using the assumptions detailed in note 20.

Forward subscription agreement

During the year the Group entered into a forward subscription agreement as set out in note 14. This  agreement requires the Company to issue a variable number of shares in exchange for ZAR 15 million. The  assumptions used in this estimation are discussed in note 26.

Impairment of available-for-sale fi nancial assets

The Group follows the guidance of AASB 139 Financial Instruments: Recognition and Measurement to determine when an available-for-sale fi nancial asset is impaired. This determination requires signifi cant judgement. In making this judgement, the Group evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost and the fi nancial health of and short-term business outlook for the investee, including factors such as industry and sector performance, changes in  technology and operational and fi nancing cash fl ows.

163

Notes to the fi nancial statements (continued)

Note 2: Statement of signifi cant accounting policies (continued)

(f) Critical accounting estimates and judgements (continued)

Derivatives and forward subscription agreements

Derivatives are recognised initially at fair value, attributable transaction costs are recognised in profi t or   loss when incurred. Subsequent to initial recognition, derivative fi nancial instruments are measured at  fair value and changes in its fair value are recognised immediately in profi t or loss.

(g) Comparatives

On 30 November 2009, Ferrum Crescent Limited (formerly Washington Resources Ltd) (“FCR”) completed the legal acquisition of Ferrum Metals Limited (formerly Ferrum Crescent Limited) (”FML”). Under the terms of AASB 3 Business Combinations (Revised), FMR was deemed to be the accounting acquirer in  the business combination. The transaction was therefore been accounted for as a reverse acquisition.

Accordingly, the consolidated fi nancial statements of the FCR group have been prepared as a continuation of the business and operations of FML. FML, as the deemed acquirer, has accounted for the acquisition of the FCR from 30 November 2009.

The implications of the application of AASB 3 on each of the attached comparative fi nancial statements are as follows:

Statement of Comprehensive Income

• The comparative 2010 Statement of Comprehensive Income comprises 16 months of FML and 7 months of FCR to 30 June 2010.

Statement of Financial Position

• The comparative 30 June 2010 Statements of Financial Position represent the combination of FCR and FML.

Statement of Changes in Equity

• The comparative 2010 Statement of Changes in Equity comprises:

• The equity balance of FML at the beginning of the period (1 March 2009).

• The total comprehensive income for the period and transactions with equity holders, being 16 months of FML and 7 months of FCR, ended 30 June 2010.

• The equity balance of the combined FML and FCR at the end of the period (30 June 2010).

Statement of Cash Flows

The comparative 2010 Statement of Cash Flows comprises:

• The cash balance of FML at the beginning of the period (1 March 2009).

• The transactions for the period, being 16 months of FML and 7 months of FCR, ended 30 June 2010.

• The cash balance of the combined FML and FCR at the end of the period (30 June 2010).

When required by Accounting Standards, comparative fi gures have been adjusted to confi rm to changes in presentation for the current fi nancial year.

(h) Going concern and BEE transaction

The Group incurred an operating loss after income tax of $8,146,191 for the year ended 30 June 2011. In addition, the Group has net current liabilities of $2,049,017 as at 30 June 2011 and negative shareholders’ equity of $1,902,104.

During the year, various agreements were entered into in respect of the minority interest in the Moonlight project. Further details of the agreements entered are provided in note 13.

Under the Subscription Agreement, the Company has agreed to issue shares to AmaMato equal to 15.6% of the post issued share capital of the company for ZAR15 million. This agreement is expected to be fulfi lled within 12 months of balance date, upon meeting the conditions precedent as set out in the agreement. In accordance with Australian Accounting Standards, the Group has recognised a current liability of $8,416,623, representing the fair value of this forward subscription agreement. Further details of which are provided in note 14.

164

Notes to the fi nancial statements (continued)

Note 2: Statement of signifi cant accounting policies (continued)

(h) Going concern and BEE transaction (continued)

The recognition of this forward subscription agreement has the impact of the Group holding a net current liability and negative shareholders’ equity position as at 30 June 2011. As this amount will be settled in  shares of the Company and not in cash, the Directors believe the adoption of the going concern basis is justifi ed.

Notwithstanding the above, the ability of the Group to continue as a going concern and pay its debts as  and when they fall due is dependent on the successful development of existing projects, reduction in  expenditure commitments and/or the sourcing of additional funds.

The directors are currently evaluating the various options and sources of funding and, again, on this basis believe the adoption of the going concern basis is justifi ed. However should the sources of funding not become available, the Group may not be able to pay its debts as and when they fall due and may be required to realise assets and extinguish liabilities, other than in the normal course of business and at amounts different from those stated in the fi nancial statements. No adjustments have been made relating to the recoverability and classifi cation of recorded asset amounts and classifi cation of liabilities that might be necessary should the Group not continue as a going concern.

(i) Foreign currency translation

Both the functional and presentation currency of the Company and its Australian controlled entity is Australian dollars (A$). Each entity in the Group determines its own functional currency and items included in the fi nancial statements of each entity are measured using that functional currency.

The functional currency of the foreign operations is South African Rand (ZAR) and United States dollars (US).

Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance date.

All exchange differences in the parent Company’s fi nancial report are taken to profi t or loss with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to equity until the disposal of the net investment, at which time they are recognised in profi t or loss.

Tax charges and credits attributable to exchange differences on those borrowings are also recognised in  equity.

As at the reporting date the assets and liabilities of these subsidiaries are translated into the presentation currency of the Company at the rate of exchange ruling at the balance date and their statements of comprehensive income are translated at the weighted average exchange rate for the year.

The exchange differences arising on the translation are taken directly to a separate component of equity.

On disposal of a foreign entity, deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in profi t or loss.

(j) Exploration and evaluation expenditure

Exploration and evaluation costs are written off in the year they are incurred apart from acquisition costs which are carried forward where right of tenure of the area of interest is current and they are expected to be recouped through sale or successful development and exploitation of the area of interest or, where exploration and evaluation activities in the area of interest have not reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

Where an area of interest is abandoned or the directors decide that it is not commercial, any accumulated acquisition costs in respect of that area are written off in the fi nancial period the decision is made. Each area of interest is also reviewed at the end of each accounting period and accumulated costs written off to the extent that they will not be recoverable in the future.

Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until production commences.

165

Notes to the fi nancial statements (continued)

Note 2: Statement of signifi cant accounting policies (continued)

(k) Plant and equipment

Plant and equipment is stated at cost less accumulated depreciation and any impairment in value.

Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows:

• Plant and equipment – over 2 to 15 years.

Impairment

The carrying values of plant and equipment are reviewed for impairment when events or changes in  circumstances indicate the carrying value may not be recoverable.

For an asset that does not generate largely independent cash infl ows, the recoverable amount is  determined  for the cash-generating unit to which the asset belongs.

If any indication exists of impairment and where the carrying values exceed the estimated recoverable amount, the assets or cash-generating units are written down to their recoverable amount.

The recoverable amount of plant and equipment is the greater of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash fl ows are discounted to their present value  using  a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset.

Derecognition

An item of plant and equipment is derecogni sed upon disposal or when no future economic benefi ts are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of  the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the  item) is included in the statement of comprehensive income in the period the item is derecogni sed.

(l) Income tax

Current tax assets and liabilities for the current period and prior periods are measured at amounts expected to be recovered from or paid to the taxation authorities based on the current period’s taxable income. The tax rates and tax laws used for computations are enacted or substantively enacted by the balance date.

Deferred income tax is provided on all temporary differences at balance date between the tax bases of  assets and liabilities and their carrying amounts for fi nancial reporting purposes.

Deferred income tax liabilities are recogni sed for all taxable temporary differences, except:

• where the deferred income tax liability arises from the initial recognition of goodwill of an asset or   liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profi t nor taxable profi t or loss;

• where the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets are recogni sed for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profi t will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised, except:

• where the deferred income tax asset relating to the deductible temporary difference 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 the accounting profi t nor taxable profi t or loss;

• where the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax assets is only recogni sed to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profi t will be available against which the temporary difference can be utilised.

166

Notes to the fi nancial statements (continued)

Note 2: Statement of signifi cant accounting policies (continued)

(l) Income tax (continued)

The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is no longer probable that suffi cient taxable profi t will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has become probable that future taxable profi t will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance date.

Income taxes relating to items recognised directly in equity are recogni sed in equity and not in the statement of comprehensive income.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

(m) GST/VAT

Revenues, expenses and assets are recognised net of the amount of GST/VAT, except:

• where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST/VAT is recogni sed as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• where receivables and payables are stated with the amount of GST/VAT included.

The net amount of GST/VAT recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of fi nancial position.

Cash fl ows are included in the Statement of Cash Flows on a gross basis and the GST/VAT component of cash fl ows arising from investing and fi nancing activities, which is recoverable from, or payable to, the taxation authority, are classifi ed as operating cash fl ows.

Commitments and contingencies are disclosed net of the amount of GST/VAT recoverable from, or payable to, the taxation authority.

(n) Provisions and employee benefi ts

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outfl ow of resources embodying economic benefi ts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

When the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the balance date. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that refl ects the time value of money and the risks specifi c to the liability. The increase in the provision resulting from the passage of time is recognised in  fi nance costs.

Employee leave benefi ts

(i) Wages and salaries, annual leave and sick leave

Liabilities for wages and salaries including non-monetary benefi ts, annual leave and accumulating sick leave due to be settled within 12 months of the reporting date are recognised in provisions in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.

167

Notes to the fi nancial statements (continued)

Note 2: Statement of signifi cant accounting policies (continued)

(n) Provisions and employee benefi ts (continued)

Employee leave benefi ts (continued)

(ii) Long service leave

The liability for long service leave is recognised and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to the expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outfl ows.

(o) Cash and cash equivalents

Cash and cash equivalents in the statement of fi nancial position comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less.

For the purposes of the Statement of Cash Flow, cash and cash equivalents consist of cash and cash equivalents as defi ned above, net of outstanding bank overdrafts.

(p) Receivables

Receivables, which generally have 30 to 90-day terms, are recogni sed initially at fair value and subsequently measured at amorti sed cost using the effective interest rate method, less an allowance for any uncollectible amounts.

Collectability of receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off when identifi ed. An allowance for doubtful debts is raised when there is objective evidence that the Company will not be able to collect the debt.

(q) Revenue recognition

Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent that it is probable that the economic benefi ts will fl ow to the Company and the revenue can be reliably measured. The following specifi c recognition criteria must also be met before revenue is  recognised:

Interest revenue

Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the fi nancial instrument) to  the net carrying amount of the fi nancial asset.

(r) Contributed equity

Ordinary shares are classifi ed as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(s) Trade and other payables

Trade payables and other payables are carried at amorti sed costs and represent liabilities for goods and services provided to the Company prior to the end of the fi nancial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services.

(t) Earnings per share

Basic earnings per share is calculated as net profi t attributable to members of the Company adjusted to  exclude any costs of servicing equity (other than dividends) divided by the weighted average number of ordinary shares, adjusted for any bonus element.

168

Notes to the fi nancial statements (continued)

Note 2: Statement of signifi cant accounting policies (continued)

(t) Earnings per share (continued)

Diluted earnings per share is calculated as net profi t attributable to members of the Company adjusted for:

• costs of servicing equity (other than dividends);

• the after-tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and

• other non-discretionary changes in revenues or expenses during the period that would result from the  dilution of potential ordinary shares,

divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted  for any bonus element.

(u) Investments and other fi nancial assets

Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classifi ed as either fi nancial assets at fair value through profi t or loss, loans and receivables, held-to-maturity investments, or available-for-sale fi nancial assets. When fi nancial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profi t or loss, directly attributable transaction costs. The Company determines the classifi cation of its fi nancial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each fi nancial year-end.

(i) Financial assets at fair value through profi t or loss

Financial assets classifi ed as held for trading are included in the category ‘fi nancial assets at fair value through profi t or loss’. Financial assets are classifi ed as held for trading if they are acquired for the purpose of selling in the near term. Derivatives are also classifi ed as held for trading unless they are designated as effective hedging instruments. Gains or losses on investments held for trading are recognised in profi t or loss.

During the year the Group entered into a forward subscription agreement as set out in Note 14. This forward subscription agreement is treated as a derivative fi nancial instrument, as its value changes in response to the Company’s share price. Derivatives are recognised initially at fair value, attributable transaction costs are recognised in profi t or loss when incurred. Subsequent to initial recognition, derivative fi nancial instruments are measured at fair value and changes in its fair value are recognised immediately in profi t or loss.

(ii) Held-to-maturity investments

Non-derivative fi nancial assets with fi xed or determinable payments and fi xed maturity are classifi ed as held-to-maturity when the Company has the positive intention and ability to hold to maturity. Investments intended to be held for an undefi ned period are not included in this classifi cation. Investments that are intended to be held-to maturity, such as bonds, are subsequently measured at amortised cost. This cost is computed as the amount initially recogni sed minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount. This calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums and discounts. For investments carried at amortised cost, gains and losses are recognised in profi t and loss when the investment are derecognised or impaired, as well as through the amortisation process.

(iii) Loans and receivables

Loans and receivables are non-derivative fi nancial assets with fi xed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in profi t and loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

169

Notes to the fi nancial statements (continued)

Note 2: Statement of signifi cant accounting policies (continued)

(u) Investments and other fi nancial assets (continued)

(iv) Available-for-sale investments

Available-for-sale investments are those non-derivative fi nancial assets that are designated as available-for-sale or are not classifi ed as any of the three proceeding categories. After initial recognition available-for-sale investments are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to  be  impaired, at which time the cumulative gain or loss previously reported in equity is recognised in profi t and loss.

The fair value of investments that are actively traded in organised fi nancial markets are determined by reference to quoted market bid prices at the close of business on the balance date. For investments with no active market, fair value is determined using valuation techniques. Such techniques include using recent arm’s length market transactions; reference to current market value of another instrument that is substantially the same; discounted cash fl ow analysis and option pricing models.

(v) Impairment of fi nancial assets

The Company assesses at each balance date whether a fi nancial asset or group of fi nancial assets is  impaired.

Available-for-sale investments

If there is objective evidence that an available-for-sale investment is impaired, an amount comprising the difference between its cost and its current fair value, less any impairment loss previously recognised in profi t and loss, is transferred from equity to the statement of comprehensive income. Reversals of impairment losses for equity instruments classifi ed as available-for-sale are not recogni sed in profi t. Reversals of impairment losses for debt instruments are reversed through profi t and loss if the increase in an instrument’s fair value can be objectively related to an event occurring after the impairment loss was recognised in profi t or loss.

(w) Share-based payment transactions

The Company provides benefi ts to its employees (including key management personnel) in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).

There are currently two plans in place to provide these benefi ts:

• the Employee Share Option Plan, which provides benefi ts to directors, employees and consultants; and

• the Employee Share Loan Plan, which provides benefi ts to directors, employees and consultants.

The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using a  Binomial model, further details of which are given in note 20.

In valuing equity-settled transactions, no account is taken to any vesting conditions, other than conditions linked to the price of the shares of the Company if applicable.

The cost of equity-settled transactions is recogni sed, together with a corresponding increase in equity on the date the equity right is granted. The statement of comprehensive income charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

If the terms of an equity-settled award are modifi ed, as a minimum an expense is recognised as if the terms had not been modifi ed. An additional expense is recogni sed for any modifi cation that increases the total fair value of the share -based arrangement, or is otherwise benefi cial to the employee, as measured at the date of modifi cation

If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recogni sed immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modifi cation of the original award, as described in the previous paragraph.

170

Notes to the fi nancial statements (continued)

Note 2: Statement of signifi cant accounting policies (continued)

(w) Share-based payment transactions (continued)

The dilutive effect, if any, of outstanding options is refl ected as additional share dilution in the computation of diluted earnings per share (see note 20).

(x) Business combinations

Business combinations are accounted for using the acquisition method. The consideration transferred in a business combination shall be measured at fair value, which shall be calculated as the sum of the acquisition-date fair values of the assets transferred by the acquirer and the amount of any non-controlling interest in the acquire. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifi able net assets. Acquisition-related costs are expensed as incurred and included in administrative expense.

When the Group acquires a business, it assesses the fi nancial assets and liabilities assumed for appropriate classifi cation and designation in accordance with the contractual terms, economic conditions the Group’s operating and accounting policies and other pertinent condition as at the acquisition date. This includes the separation of the embedded derivatives in those contracts by the acquiree.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured at fair value at the acquisition date through profi t or  loss.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability will be recognised in accordance with AASB 139 either in the profi t or loss as  a  change to other comprehensive income. If contingent consideration is classifi ed as equity, it should not be remeasured until it is fi nally settled within equity.

(y) Leases

The determination on whether an arrangement is or contains a lease is based on the substance of the arrangement at inception date, whether fulfi lment of the arrangement is dependent on the use of a   specifi c asset or assets or the arrangement conveys a right to use the asset, even if that right is  not  explicitly  specifi ed in an arrangement.

Finance leases, which transfer to the Group substantially all the risks and benefi ts incidental to ownership of the leased term, are capitalised at the inception of the lease at the fair value of the leased asset or, if  lower, at the present value of the minimum lease payments. Lease payments are apportioned between the fi nance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are cognised in fi nance costs in the profi t or loss.

Capitalised lease assets are depreciated over the shorter of the estimated useful life of the asset and the lease term if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.

Operating lease payments are recognised as an operating expense in the statement of comprehensive income on a straight-line basis over the lease term. Operating lease incentives are recognised as a liability when received and subsequently reduced by allocating lease payments between rental expense and reduction of the liability.

(z) Interest-bearing loans and borrowings

All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Fees paid on the establishment of loan facilities that are yield related are included as part of the carrying amount of the loans and borrowing.

Borrowings are classifi ed as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

171

Notes to the fi nancial statements (continued)

Note 3: Revenue and expenses

Revenue and Expenses from Continuing Operations

2011 2010 $ $

(a) Revenue

Finance revenue: Interest received 149,608 15,960Other 109 –

149,717 15,960

(b) Other income

Sale of available-for-sale investments (i) 665,242 5,378Sale of tenements (ii) 600,000 –

1,265,242 5,378

(c) Profi t and loss

Other expenses include the following: Depreciation 17,585 6,911Disposal of plant and equipment 2,240 –Bad debt expenses – 23,440Consulting services 541,659 829,679Employment related: – Directors’ fees 380,949 352,916– Wages 482,529 241,012– Superannuation 27,715 18,136Corporate 733,367 515,231Travel 518,275 194,293Other 819,559 144,031

3,523,878 2,325,649

(d) (i) During the year Ferrum Crescent Limited entered into and completed an agreement with Northern Uranium Limited (“Northern”) (ASX: NTU) to dispose all of its Australian minerals exploration interests for a cash sum of $600,000. The offer from Northern was subject to both due diligence on the Company’s tenement interests and the consent where relevant of joint venturers. Due diligence was concluded favourably, and a pre-emptive right was exercised, with the result that the Group’s Australian exploration assets were all sold during the half-year.

The sale of these Australian exploration interests has enabled the Company and its management to focus on developing its iron ore interests in Southern Africa and in particular to concentrate on progressing Moonlight Iron Ore Project and fi nalising the mining right application process in respect of the Moonlight Deposit.

(d) (ii) In August and September 2010, the Group disposed of its interest in 12,460,071 shares and 1,873,667 options held in Northern Uranium for $1,574,920. These fi nancial assets were designated as   available -for -sale, with all prior gains on such investments taken to equity. The fair value change of   the fi nancial assets of $665,242 from 1 July 2010 to the date of sale was taken to the available -for -sale reserve. The above amount represents the release of the unrealised gains reserve upon sale (gross  of  tax).

172

Notes to the fi nancial statements (continued)

Note 4: Segment information

Identifi cation of Reportable Segments

The Group has based its operating segment on the internal reports that are reviewed and used by the executive management team in assessing performance and in determining the allocation of resources.

The Group currently does not have production and is only involved in exploration. As a consequence, activities in the operating segment are identifi ed by management based on the manner in which resources are allocated, the nature of the resources provided and the identity of the manager and country of expenditure. Information is reviewed on a whole of entity basis.

Based on these criteria the Group has only one operating segment, being exploration, and the segment operations and results are reported internally based on the accounting policies as described in note 2 for the computation of the group’s results presented in this set of fi nancial statements.

Note 5: Income tax

2011 2010 $ $

Reconciliation of income tax expense/(income) to the pre-tax net loss:

Loss before income tax (8,141,794) (7,404,545)Income tax calculated at 30% on loss before income tax (2,442,538) (2,221,363)Add: Tax effect of non-deductible expenses 815,022 174,303Share issue costs (131,780) –Capital losses – 499,734Prior year adjustment to deferred tax assets 284,091 –Unused tax losses and temporary differences not brought to account 1,475,205 1,547,326

Income tax expense/(income) – –

Unrecognised deferred tax balances

Deferred tax liabilitiesAssessable temporary differencesPlant and equipment – (756)Deferred tax liabilities offset by deferred tax assets – 756

Net deferred tax liabilities – –

Deferred tax assets

Accrued expenses 5,781 9,000Provisions 611 3,142Capital raising costs – 57,600Unused tax losses 3,816,709 2,278,910

3,823,101 2,348,652Total unrecognised deferred tax assets (3,823,101) (2,347,896) – 756

Deferred tax assets offset by deferred tax liabilities – (756)

Net deferred tax assets – –

Note 6: Directors’ and executives’ remuneration

(a) Compensation of Key Management Personnel

Short-term employee benefi ts 1,211,232 584,569Post-employment benefi ts 27,715 17,237Other long-term benefi ts – –Termination benefi ts 142,234 –Share-based payment 532,111 –

1,913,292 601,806

173

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175

Notes to the fi nancial statements (continued)

Note 6: Directors’ and executives’ remuneration (continued)

(b) Share and option holdings (continued)

(ii) Net change other includes: • subscription for options; and • sales/transfers

(iii) Balance of 545,000 shares and nil options as at 30 June 2010(iv) No shares or options as at 30 June 2010(v) Balance of 936,000 shares and no options as at 30 June 2010(iv) Balance of 2,110,202 shares and nil options as at 30 June 2010(iiv) Balance of 3,676,210 shares and nil options as at 30 June 2010(iiiv) Balance of 400,813 shares and nil options as at 30 June 2010(ix) Balance of 762,205 shares and nil options as at 30 June 2010

(c) Number of employee shares (with non-recourse loans) held by directors and executives:

Net2011 Balance Received as Options Change BalanceDirectors 1-July-10 Remuneration Exercised Other 30-June-11

Ed Nealon 500,000 600,000 – – 1,100,000 Scott Huntly – – – – – Matodzi Nesongozwi – – – – – Adrian Griffi n 750,000 – – – 750,000Kofi Morna – – – – –Ted Droste – – – – –Grant Button 400,000 500,000 – – 900,000

ExecutivesLindsay Cahill 100,000 350,000 – – 450,000Robert Hair 500,000 500,000 – – 1,000,000Andrew Nealon 40,000 200,000 – – 240,000 Robert van der Laan – 350,000 – – 350,000Vernon Harvey – – – – –

Net2010 Balance Received as Options Change BalanceDirectors 1-July-10 Remuneration Exercised Other(i) 30-June-11

Ed Nealon – – – 500,000 500,000 Scott Huntly – – – – – Matodzi Nesongozwi – – – – – Grant Button – – – 400,000 400,000 Mark Burchnall – – – 500,000 500,000Gino D’Anna – – – – –Adrian Griffi n – – – 750,000 750,000Richard Jarvis – – – 250,000 250,000Philip Kirchlechner – – – – –Zola Skweyiya – – – – –Melissa Sturgess – – – 500,000 500,000Matthew Sutcliffe – – – – –Glenn Whiddon – – – – –

ExecutivesLindsay Cahill – – – 100,000 100,000Robert Hair – – – 500,000 500,000Andrew Nealon – – – 40,000 40,000Robert van der Laan – – – – –Michael Langoulant – – – – –

(i) Net change other includes existing Ferrum Crescent (Washington) Resources shares at date of business combination.

176

Notes to the fi nancial statements (continued)

Note 7: Auditor’s remuneration

2011 2010 $ $

Remuneration of the auditor of the Company for: – auditing or reviewingthe fi nancial reportErnst & Young Australia 90,211 68,770Ernst & Young South Africa 43,000 –L.A Gambale 4,062 –– other services – –Ernst & Young Australia 13,390 10,300L.A Gambale 32,845 –

Note 8: Earnings per share

2011 2010 $ $

Basic loss per share (cents per share) (3.32) (5.86)Net loss (8,141,794) (7,404,546)Loss used in calculating basic loss per share (8,141,794) (7,404,546)

Number NumberWeighted average number of ordinary shares used in the calculation ofbasic and diluted (loss)/earnings per share 245,275,224 126,346,059

During the period there were no listed options that were exercised.

These options are not considered dilutive for the purpose of the calculation of diluted earnings/loss per share as their conversion to ordinary shares would decrease the net loss from continuing operations per share. Consequently, diluted earnings/loss per share is the same as basic earnings per share.

There have been no transactions involving ordinary shares or potential shares that would signifi cantly change the number of ordinary shares or potential ordinary shares outstanding between the reporting date and the date of completion of these fi nancial statements.

Note 9: Cash and cash equivalents

2011 2010 $ $

Cash at bank 8,116,009 529,225

Cash at the end of the fi nancial year as shown in the cash fl ow statement is reconciled to items in the statement of fi nancial position as follows:

Cash at bank 8,116,009 529,225

Note 10: Receivables

2011 2010 $ $

Current

Sundry debtors 2,923 141,790GST/Vat 280,802 –

283,725 141,790

(i) Non-trade debtors are non-interest-bearing and are generally on 30 to 90 days terms. The carrying amounts of these receivables

represent fair value and are not considered to be impaired.

177

Notes to the fi nancial statements (continued)

Note 11: Available-for-sale investments

2011 2010Non-current $ $

At fair value

Shares in listed companies – 909,678

Listed Shares

In August and September 2010, the Group disposed of its interest in 12,460,071 shares and 1,873,667 options held in Northern Uranium for $1,574,920. These fi nancial assets were designated as available -for -sale, with all prior gains on such investments taken to equity. The fair value change of the fi nancial assets of $665,242 from 1 July 2010 to the date of sale was taken to the available -for -sale reserve.

Note 12: Plant and equipment

Furniture, fi ttings and Motor Leasehold equipment vehicles improvements Total $ $ $ $

Year ended 30 June 2010

Opening net carrying value 2,367 – – 2,367Additions 12,122 – – 12,122Depreciation charge for the year (6,911) – – (6,911)

Closing net carrying amount 7,578 – – 7,578

At 30 June 2010

Cost 9,482 – – 9,482Accumulated depreciation (1,904) – – (1,904)

Net carrying value 7,578 – – 7,578

Year ended 30 June 2011

Opening net carrying value 7,578 – – 7,578Additions 41,826 100,449 24,391 166,666Disposals (2,891) – – (2,891)Depreciation charge for the year (9,183) (8,402) – (17,585)Exchange differences (2,110) (3,751) (994) (6,855)

Closing net carrying amount 35,220 88,296 23,397 146,913

At 30 June 2011

Cost 46,191 96,356 23,397 165,944Accumulated depreciation (10,971) (8,060) – (19,031)

Net carrying value 35,220 88,296 23,397 146,913

Note 13: Trade and other payables

2011 2010 $ $

Current

Unsecured liabilitiesTrade payables and other payables (i) 1,063,206 540,024Unsecured loan (ii) – 10,000Minority interest obligation (iii) 1,036,500 –

2,099,706 550,024

178

Notes to the fi nancial statements (continued)

Note 13: Trade and other payabless (continued)

(i) Trade and other payables are non-interest -bearing and are normally settled on 30-day terms.

(ii) Unsecured loan is interest free and has no defi ned terms of repayment.

(iii) During the year, various agreements were entered into in respect of the minority interest in the Moonlight Iron Project.

A company, Mkhombi Investments (Pty) Ltd (“Mkhombi Investments”), which meets the requirements of applicable South African

legislation in respect of historically disadvantaged persons (referred to in South Africa as being “BEE controlled”), entered into an

agreement on 26 October 2010 with the then current holder of 26% of Turquoise Moon Trading 157 (Pty) Ltd (“TMT”) to purchase that

holder’s right, title and interest in TMT for ZAR30 million (approximately AUD4.4 million) (“TMT Sale Agreement”). The South African

Department of Mineral Resources expressed its support of the transaction.

Nelesco 684 (Pty) Ltd (“Nelesco”), a wholly-owned subsidiary of the Company, entered into agreements with Mkhombi Investments

and its holding company, Mkhombi AmaMato (Pty) Ltd (“AmaMato”), the terms of which provide for the following to take place:

(a) Nelesco would be issued shares in Mkhombi Investments such that it holds an initial 32.17% interest in Mkhombi Investments,

with the remaining 67.83% held by AmaMato;

(b) AmaMato would lend the sum of ZAR 7.5 million to Mkhombi Investments, to be applied as part of the purchase price under

the TMT Sale Agreement. The advance, which has been made as at 31 December 2010, does not attract interest and is only

repayable in certain circumstances (namely, the failure of the conditions precedent set out in the Subscription Agreement,

as  defi ned below);

(c) Nelesco would lend the sum of ZAR 22.5 million to Mkhombi, to be applied as paying the balance of the purchase price under the

TMT Sale Agreement. The advance, which has been made as at 31 December 2010, does not attract interest and is repayable in

certain circumstances (namely, the failure of the conditions precedent set out in the Subscription Agreement, as defi ned below);

(d) Mkhombi Investments would issue shares and/or Nelesco will transfer some of its shares in Mkhombi Investments so that

11.54% of Mkhombi Investment’s shares on issue are held by a trust representing the locally impacted community, with the

resulting shareholdings being AmaMato 60%, Nelesco 28.46%, and the locally impacted community 11.54%; and

(e) AmaMato will, subject to the conditions precedent to the Subscription Agreement, as defi ned below, sell its entire right,

title  and  interest in, and all of its claims against, Mkhombi Investments to Nelesco for ZAR 7.5 million (A$1,036,500).

A subscription agreement was entered into between the Company and AmaMato on 4 November 2010 (the “Subscription Agreement”). On completion of the Subscription Agreement (subject to the fulfi lment of the conditions precedent to that agreement), AmaMato will subscribe for such number of shares in the Company as is equal to 7.8% of the issued shares at that time (the “First Subscription”). The price payable for the subscription for the Shares under the First Subscription will be ZAR 7.5 million.

AmaMato will also, on or before the later of: (i) the date falling 10 business days after the Closing Date (as defi ned in the Subscription Agreement) and (ii) 30 November 2011 (the “Subscription Period”), which period will be extended by the Company for a period of 1 year in the event that it raises not less than ZAR7.5 million in 2011, subscribe for a further 7.8% of the issued shares of the Company (calculated by reference to the issued share capital of the Company at the time of the First Subscription adjusted for any subsequent share splits, consolidations or bonus capitalisations) for a further ZAR 7.5 million.

The conditions precedent to the Subscription Agreement which must be fulfi lled by 21 December 2011, include no insolvency event occurring, the granting of a mining right in respect of the Project, necessary South African Reserve Bank approvals and shareholder and other approvals required under the Corporations Act and the AIM/ASX listing rules, including shareholder approval.

In the event that the conditions precedent to the Subscription Agreement are not fulfi lled by 21 December 2011, then AmaMato will have the right, for 60 days, to require Nelesco to purchase all of AmaMato’s rights, title and interest in, and all its claims against, Mkhombi Investments for the price of   ZAR 12.5  million.

Kofi Morna, a Director of the Company, is also a director of AmaMato and of Mkhombi Investments. He  became  a Director of the Company during the period for the purposes of the above transaction. He holds a indirect non-controlling interest in AmaMato.

Upon completion of the Subscription Agreement, the Company will legally own directly and indirectly through its wholly owned subsidiary, Mkhombi Investments, 97% of TMT, with the remaining 3% held by the GaSeleka Community. AmaMato will own 15.6% of the Group.

In the opinion of the Directors, the conditions precedent to the Subscription Agreement are essentially procedural in nature, following the completion of the Company’s capital raising of 10 million pounds Sterling (“GBP”) (equal to approximately AUD 16 million) before expenses, completed on 16 December 2010. As such, while the Company’s legal interest in the Moonlight Iron Ore Project increased from 74% to approximately 81.5%, the Directors hold an effective interest in the underlying project of 97% as at 31 December 2010 as  a  result of the minority purchase obligation.

179

Notes to the fi nancial statements (continued)

Note 14: Financial liability

2011 2010 $ $

CurrentFinancial liability at fair value through profi t and loss – forward subscription agreement 8,416,623 –

8,416,623 –

The above liability will be settled in the company’s shares and not in cash.

As described above, in the opinion of the Directors, the remaining procedural conditions precedent under the Subscription agreement will be fulfi lled within one year from balance date. Under the Subscription Agreement, the Company has agreed to issue shares to AmaMato equal to 15.6% of the issued share capital of the Company for ZAR15 million. The above fi nancial liability, measured at fair value through profi t and loss, represents the Company’s best estimate of the fair value of this contractual arrangement. Refer to Note 26 for the Group’s exposure to equity price risk on this amount. The loss on revaluation of the fi nancial liability during the period amounts to $1,623,385 which has been recognised through the profi t and loss.

Note 15: Provisions

2011 2010 $ $

Employee benefi ts 6,794 10,474

Note 16: Issued capital

2011 2010 2011 2010 Number of Number of $ $ shares shares

(a) Share capitalOrdinary sharesOrdinary shares fully paid 298,691,705 177,754,699 27,392,728 12,146,950Employee share plan shares (6,445,000) (3,870,000) (509,905) –

292,246,705 173,884,699 26,882,823 12,146,950

Capital management When managing capital (which is defi ned as the Company’s total equity), management’s objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefi ts for other stakeholders. Management also aims to maintain a capital structure that ensures the lowest cost of capital available to the entity. As the equity market is constantly changing management may issue new shares to provide for future exploration and development activity. The Company is not subject to any externally imposed capital requirements.

(b) Movements in ordinary share capital

Date Details Number of shares $

1 July 2010 Opening balance 177,754,699 12,146,9508 July 2010 Issued shares resulting from 1:10 exchange of listed options 8,012,006 –7 October 2010 Issued at 12 cents per share 10,000,000 1,200,00030 November 2010 Issue of treasury shares with non-recourse loans 2,925,000 579,15015 December 2010 Issued at 16 cents per share 100,000,000 15,419,411 Costs associated with share issues – (1,952,783)

End of the fi nancial period 298,691,705 27,392,728

Employee share plan shares on issue (6,445,000) (509,905)

292,246,705 26,882,823

180

Notes to the fi nancial statements (continued)

Note 16: Issued Capital (continued)

(b) Movements in ordinary share capital (continued)

If, at any time during the exercise period, an employee ceases to be an employee, all share options held by that employee will lapse one month after the employment end date. Therefore above employee shares are recognised in issued capital when issued to the employees.

(c) Movements in employee share plan shares issued with limited recourse employee loans

Date Details Number of shares $

1 July 2010 Opening balance 3,870,000 – Issued during the year 2,925,000 579,150 Employee shares sold during the year and repayment of loan (350,000) (69,245)

On issue at end of year 6,445,000 (509,905)

This account is used to record the value of shares issued under the Executive Share Incentive Plan (ESIP). The ESIP is accounted for as an “in-substance” option plan due to the limited recourse nature of the loan between employees and the Company to fi nance the purchase of ordinary shares. The total fair value of the “in substance” options issued under the plan is recognised as a share-based payment expense over the vesting period, with a corresponding increase in equity. Information on the valuation of shares issued under the ESIP during the period is disclosed in note 20.

Note 17: Listed Options

2011 2010 Number of Number of options options

OptionsAt year-end the following options were on issue:

– 31 December 2013 Options exercisable at 40 cents per share 21,496,727 101,616,729

Movements in 31 December 2013 Options Beginning of the fi nancial year 101,616,729 52,187,500Options issued during the year – 49,429,229Options cancelled during the year (80,120,002) –

End of the fi nancial year 21,496,727 101,616,729

Note 18: Reserves

Share- based Foreign payment Option exchange Equity reserve reserve reserve reserve Total $ $ $ $ $

At 1 March 2009 – 1,136,062 83,220 – 1,219,282Foreign currency translation – – 26,235 – 26,235

At 30 June 2010 – 1,136,062 109,455 – 1,245,517

Share-based payments expense 340,602 – – – 340,602Share-based payments transferred to issued capital (579,150) – – – (579,150)Repayment of employee loans 69,245 – – – 69,245Options-based payments expense – 268,363 – – 268,363Currency translation differences – – 4,397 – 4,397Acquisition of non-controlling interest – – – (11,218,637) (11,218,637)Share-based payment to locally impacted community – – – 1,092,565 1,092,565

At 30 June 2011 (169,303) 1,404,425 113,852 (10,126,072) (8,777,098)

181

Notes to the fi nancial statements (continued)

Note 18: Reserves (continued)

Nature and purpose of reserves

Share-based payments reserve

This reserve is used to record the value of equity benefi ts provided to employees, consultants and directors as part of their remuneration.

Options reserve

This reserve is used to record the value of options issued, other than share-based payments to directors, employees and consultants as part of their remuneration.

Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of  the fi nancial statements of foreign subsidiaries.

Equity reserve

The equity reserve is used to record the acquisition of the non -controlling interest by the Group and to record differences between the carrying value of non -controlling interests and the consideration paid/received, where  there has been a transaction involving non -controlling interests that do not result in a loss of control.

The reserve is attributable to the equity of the parent.

Note 19: Accumulated losses

2011 2010 $ $

Accumulated losses at the beginning of the fi nancial year (12,375,940) (4,971,394)Net loss for the reporting period (8,141,794) (7,404,546)

Accumulated losses at the end of the fi nancial year (20,517,734) (12,375,940)

Note 20: Share-based payments

Expenses arising from share-based payment transactions

Total expenses arising from share-based payment transactions recognised during the year were as follows:

2011 2010 $ $

Options issued in consideration for services (i) 268,363 –Amounts expensed for shares issued under the Company’s Executive Share Incentive Plan (ii) 340,602 –Share -based payment – in respect of Moonlight Iron Ore Project (refer note 13) 1,092,565 –

1,701,530 –

(i) Options issued in consideration for services

On 30 November 2010, the Company issued 2,950,000 options with an exercise price of 19.80 cents to employees as approved by then shareholders meeting held on 30 November 2010. There are no voting rights attached to the options and they may be exercised from 7 December 2011.

Fair value of options granted

The fair value at grant date of options issued is determined using a Binomial option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the non-tradable nature of the option, the share price at grant date and expected price volatility of the underlying share, the  expected dividend yield and the risk-free interest rate for the term of the option.

182

Notes to the fi nancial statements (continued)

Note 20: Share -based payments (continued)

(i) Options issued in consideration for services (continued)

The table below summarises the model inputs (post consolidation) for options granted during the period year ended 30 June 2011:

Options granted for no consideration 2,950,000Exercise price (AUD cents) 19.80Issue date 30 November 2010Expiry date 7 December 2013Underlying security spot price at grant date (AUD cents) 18Expected price volatility of the Company’s shares 92.0% – 95.0%Expected dividend yield 0%Expected life 1.51 – 2.27Risk-free interest rate 4.80% – 4.85%Binomial model valuation per option (AUD cents) 7.8 – 9.3

The expected price volatility is based on the historic volatility of the Company’s share price in the market.

(ii) Shares issued under the Executive Share Incentive Plan (ESIP)

Executive Share Incentive Plan

Under the plan, eligible employees are offered shares in the Company at prices determined by the Board. The Board has the ultimate discretion to impose special conditions on the shares issued under the ESIP and can grant a loan to a participant for the purposes of subscribing for plan shares. Shares issued under loan facilities are held on trust for the benefi t of the participant and will only be transferred into the participant’s name once the loan has been fully repaid. ESIP participants receive all the rights associated with the ordinary shares.

Loans granted to participants are limited recourse and interest free unless otherwise determined by the Board. The loans are to be repaid via the application of any dividends received from the shares and/or the sale of the plan shares. Where the loan is repaid by the sale of shares, any remaining surplus on sale is  remitted to the participant while any shortfall is borne by the Group.

During the reporting period, the Company issued the following shares under the ESIP:

1. 350,000 shares at 19.8 cents per share to Mr Robert Van der Laan, Chief Financial Offi cer, on 30 November 2010 after shareholder approval.

2. 350,000 shares at 19.8 cents per share to Mr Lindsay Cahill, Mine Services Manager, on 30 November 2010 after shareholder approval.

3. 500,000 shares at 19.8 cents per share to Mr Grant Button, Non-executive Director, on 30 November 2010 after shareholder approval.

4. 75,000 shares at 19.8 cents per share to Ms Theresa Miloseski, Administration Offi cer, on 30 November 2010 after shareholder approval.

5. 500,000 shares at 19.8 cents per share to Mr Robert Hair, Company Secretary, on 30 November 2010 after shareholder approval.

6. 350,000 shares at 19.8 cents per share to Mr Christian Kunze, Engineering Manager, on 30 November 2010 after shareholder approval.

7. 200,000 shares at 19.8 cents per share to Mr Andrew Nealon, Joint Company Secretary, on 30 November 2010 after shareholder approval.

8. 600,000 shares at 19.8 cents per share to Mr Ed Nealon, Non-Executive Chairman, on 30 November 2010 after shareholder approval.

The above shares vest as follows:

• one-third of shares vest after 12 months;

• one-third of shares vest after 24 months; and

• one-third of shares vest after 36 months.

183

Notes to the fi nancial statements (continued)

Note 20: Share - based payments (continued)

(ii) Shares issued under the Executive Share Incentive Plan (ESIP) (continued)

If any time during the exercise period an employee ceases to be the employee, all options held by that employee vest immediately and will lapse one month after the employment end date. As such, there is not considered to be any service conditions attaching to the grant of shares under the ESIP, and the full expense is recognised at grant date.

Fair value of shares granted

Shares granted under the ESIP are accounted for as “in-substance” options due to the limited recourse nature of the loan between the employees and the Company to fi nance the purchase of ordinary shares. The fair value at grant date for the various tranches of shares issued under the ESIP is determined using a Binomial model using the following model inputs:

Shares issued 2,925,000Loan price per share (AUD cents) 19.80Valuation date 7 December 2010Loan expiry date 7 December 2014Underlying security spot price at valuation date (AUD cents) 18Expected price volatility of the Company’s shares 89%Expected dividend yield 0%Expected life 4.02Risk-free interest rate 4.95%Binomial model valuation per share (AUD cents) 11.6

Note 21: Commitments

(i) The Company has certain obligations with respect to tenements and minimum expenditure requirements on areas, as follows:

2011 2010 $ $

Within 1 year 35,722 520,0001 to 2 years – 550,000

35,722 1,070,000

The Company disposed of its Australian tenements during the year and whilst the Company still holds tenements in South Africa, expenditure commitments in relation to these tenements have been met. The Company is in the process of converting their South African prospecting rights to mining licenses and applying for new prospecting rights over adjacent land. Once these applications are complete, the  Company will be subject to new commitments in relation to mining and prospecting expenditure.

The Company’s Australian commercial property sub-lease expired on 1 June 2011 and the Company is currently negotiating the terms and conditions of its new lease premises. These negotiations were still being fi nalised as at the date of this report. A subsidiary entered into a 12-month commercial offi ce lease on 1 April 2011 for the head offi ce in Johannesburg, South Africa.

Note 22: Contingent liabilities

There are no contingent liabilities as at 30 June 2011 other than an obligation under the BEE transaction (detailed in note 13) to buy out the BEE shareholding in Mkhombi Investments for ZAR 12.5 million, should one or more of the subscription agreement conditions not be met by the Company. Should this occur and the Company not make alternative arrangements, the Company’s holding in the Moonlight Iron Ore Project could cease to be in compliance with the BEE requirements of the MPRDA. The Company believes this to be an unlikely scenario and in any event would endeavour to make alternative arrangements in order to remain compliant with the MPRDA.

184

Notes to the fi nancial statements (continued)

Note 23: Related party transactions

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

Subsidiaries

The consolidated fi nancial statements include the fi nancial statements of Ferrum Crescent Limited and the subsidiaries listed in the following table:

% Equity InterestName Country of Incorporation 2011 2010

Ferrum Metals Pty Ltd (a) Australia 100 100Batavia Ltd (b) Mauritius 100 100Nelesco 684 Pty Ltd South Africa 100 100Turquoise Moon Trading 157 Pty Ltd (c) South Africa 97.14 74Mkhombi Investments Pty Ltd (c) South Africa 89.46 –

Ferrum Crescent Limited is the ultimate Australian parent entity and the ultimate parent of the Group. Transactions between Ferrum Crescent Limited and its controlled entities during the year consisted of loan advances by Ferrum Crescent Limited. All intergroup transactions and balances are eliminated on consolidation.

Loans to related parties

The following transactions were undertaken between the Company, executive offi cers and director-related entities during 2011 and 2010

2011 2010 $ $

Consulting secretarial fees were paid to Athlone International Consultants Pty Ltd, a company with which Andrew Nealon is associated 71,667 14,583

Consulting secretarial fees were paid to Camcove Pty Ltd, a company of which Robert Hair is a director and shareholder 164,364 78,000

Consulting fees were paid to T.C Droste Investments Pty Ltd, a company of which Ted Droste is a director and shareholder 82,500 10,000

Director fees were paid to Nesongozwi Mining Corp Ltd, a company of which Matodzi Nesongozwi is a director and shareholder 18,000 30,000

Director fees were paid to Umthombo Resources (Pty) Ltd, a company of which Matodzi Nesongozwi is a director and shareholder – 36,000

Consulting fees were paid to Torbinup Resources Pty Ltd, a company of which Lindsay Cahill is a director and shareholder 90,119 46,139

No consulting fees were paid to Nion Business Consulting Pty Ltd during 2011, a company of which Richard Jarvis is a director and shareholder – 11,855

No consulting secretarial fees were paid to Lanza Holdings Pty Ltd during 2011, a company of which Michael Langoulant is a director and shareholder – 6,097

No director fees were paid to Iron Ore Research Pty Ltd, a company of which Philip Kirchlechner is a director and shareholder – 20,000

No director fees were paid to Umthombo Resources (Pty) Ltd, a company of which Matodzi Nesongozwi is a director and shareholder – 36,000

Loan of 362 South African Rand owed by Scott Huntly loan is interest free and has no fi xed date of repayment. The equivalent Australian dollar amount at 30 June 2011 is $50.

Kofi Morna, a Director of the Company, is also a director and shareholder of Mkhombi AmaMato, who, prior to entering into the BEE subscription agreement had a majority interest in Mkhombi Investments. Upon completion of the subscription agreement detailed in the review of operations section and note 13, Mkhombi AmaMato will directly own 15.6% or approximately 55,208,419 shares in the Company.

185

Notes to the fi nancial statements (continued)

Note 25: Cash fl ow information

2011 2010 $ $

Reconciliation of cash fl ow from operations with (loss)/profi t from ordinary activities after income tax:

Loss from ordinary activities after income tax (8,141,794) (7,404,546)Expenses settled via equity issues – 478,479Goodwill written off – 2,019,188Impairment of available -for -sale investments – 1,573,981Depreciation 17,586 6,911Bad debt expense – 23,440Loss on sale of plant and equipment 2,240 2,124Profi t on sale of available -for -sale fi nancial assets (665,242) –Loss on movement in fi nancial liability 1,623,385 –Share-based payment compensation 1,701,530 –Net exchange differences 73,398 –

Changes in assets and liabilities

Increase in receivables (141,937) (90,868)

Increase in other operating assets (74,422) –Increase in payables 583,056 470,741Increase in other operating liabilities 21,134 –Decrease in provisions (94,688) (162)

Cash fl ows from operations (5,095,754) (2,920,712)

Note 26: Financial risk management objectives and policies

The Group’s principal fi nancial instruments comprise cash, short-term deposits, held-for-trading and derivative investments.

The main purpose of the fi nancial instruments is to fi nance the Group’s operations. The Company also has other fi nancial instruments such as trade debtors and creditors which arise directly from its operations.

The main risks arising from the Group’s fi nancial instruments are interest rate risk, foreign currency risk, equity price risk and credit risk. The board reviews and agrees policies for managing each of these risks and they are summarised below:

(a) Interest rate risk

The Group’s exposure to interest rate risk, which is the risk that a fi nancial instrument’s value will fl uctuate as a result of changes in market interest rates and the effective weighted average interest rate for each class of fi nancial assets and fi nancial liabilities, is set out in the following table. Also included is the effect on profi t and equity after tax if interest rates at that date had been 10% higher or lower with all other variables held constant as a sensitivity analysis.

The Group has not entered into any hedging activities to manage interest rate risk. In regard to its interest rate risk, the Group continuously analyses its exposure. Within this analysis consideration is given to potential renewals of existing positions, alternative investments and the mix of fi xed and variable interest rates.

186

Notes to the fi nancial statements (continued)

Note 26: Financial risk management objectives and policies (continued)

(a) Interest rate risk (continued)

Weighted Average Effective Floating Fixed Non- Interest Rate Risk Sensitivity Interest Interest Interest Interest- –10% +10% Rate Rate Rate Bearing Total Profi t Equity Profi t Equity % $ $ $ $ $ $ $ $

2011Financial AssetsCash 3.37 6,646,480 – 1,469,529 8,116,009 (201,587) – 201,587 –Trust deposits – – 42,842 42,842Receivables – – 283,725 283,725

Total Financial Assets 6,646,480 – 1,796,096 8,442,576

Financial LiabilitiesTrade and other payables – – 2,099,706 2,099,706Financial liability – – 8,416,623 8,416,623Loans and borrowings – – 50 50

Total Financial Liabilities – – 10,516,379 10,516,379

2010Financial AssetsCash 3.15 413,664 – 115,561 529,225 (912) – 912 –Receivables – – 141,790 141,790Available-for-sale investments – – 909,678 909,678

Total Financial Assets 413,664 – 1,167,029 1,580,693

Financial LiabilitiesTrade and other payables – – 510,024 510,024Loans and borrowings – – 11,246 11,246

Total Financial Liabilities – – 521,270 521,270

A sensitivity of 10% has been selected as this is considered reasonable given the current level of both short-term and long-term Australian dollar interest rates. A -10% sensitivity would move short-term interest rates at 30 June 2011 from around 3.37% to 3.03% representing a 34 basis point downwards shift (23.80 basis points net of tax).

Based on the sensitivity analysis only interest revenue from variable rate deposits and cash balances is  impacted resulting in a decrease or increase in overall income.

187

Notes to the fi nancial statements (continued)

Note 26: Financial risk management objectives and policies (continued)

(b) Liquidity risk

The Group manages liquidity risk by maintaining suffi cient cash reserves and marketable securities required to meet the current exploration and administration commitments, through the continuous monitoring of actual cash fl ows.

Ultimate responsibility for liquidity risk management rests with the board of directors, who have built an appropriate liquidity risk management framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements.

Less than 1 – 3 3 months – 1 – 5 5+ 1 month months 1 year years years Total % $ $ $ $ $

2011Liquid fi nancial assets:Cash 8,116,009 – – – – 8,116,009Trust deposits – – – 42,842 – 42,842Receivables 283,725 – – – – 283,725

8,399,734 – – 42,842 – 8,442,576

Financial liabilities:Non-interest-bearing – (1,063,206) (1,036,550) – – (2,099,756)

– (1,063,206) (1,036,550) – – (2,099,756)

Net cash infl ow/(outfl ow) 8,399,734 (1,063,206) (1,036,550) 42,842 – 6,342,820

2010Liquid fi nancial assets:Cash 529,225 – – – – 529,225Receivables 141,790 – – – – 141,790Available-for-sale investments – – 909,678 – – 909,678

671,015 – 909,678 – – 1,580,693

Financial liabilities:Non-interest-bearing – (550,024) (11,246) – – (561,270)

– (550,024) (11,246) – – (561,270)

Net cash infl ow/(outfl ow) 671,015 (550,024) 898,432 – – 1,019,423

The above table does not include the forward subscription agreement liability as the amount will be settled in shares and not in cash.

(c) Credit risk

Credit risk arises in the event that counterparty will not meet its obligations under a fi nancial instrument leading to fi nancial losses. The Company is exposed to credit risk from its operating activities, fi nancing activities including deposits with banks. The credit risk control procedures adopted by the Company is to assess the credit quality of the institution with whom funds are deposited or invested, taking into account its fi nancial position and past experiences.

The maximum exposure to credit risk on fi nancial assets of the Company which have been recognised on the statement of fi nancial position is generally limited to the carrying amount.

Cash is maintained with National Australia Bank.

188

Notes to the fi nancial statements (continued)

Note 26: Financial risk management objectives and policies (continued)

(d) Foreign exchange risk

The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fl uctuations arise. The carrying amount of the Group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date is as follows, excluding forward subscription agreement obligation the sensitivity for which is disclosed in section (f) below:

Liabilities Assets 2011 2010 2011 2010 $ $ $ $

Great British Pounds (GBP) – – 831,023 –South African Rand (ZAR) 1,904,801 104,073 2,508,485 155,701United States dollars (US) 25,222 4,508 2,922 3,347

Foreign currency sensitivity analysis

The Group is exposed to Great British Pound (GBP), United States (US) and South African Rand (ZAR) currency fl uctuations.

The following table details the Group’s sensitivity to a 10% increase and decrease in the Australian Dollar (AUD) against the relevant currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates.

The sensitivity analysis includes cash balances held in GBP, external loans as well as loans to foreign operations within the Group held in ZAR and US but denominated and repayable in AUD which give rise to a foreign currency gain or loss on revaluation. A positive number indicates an increase in profi t and other equity where the AUD strengthens against the ZAR. In relation to cash balances held in GBP a positive number indicates an increase in profi t and other equity where the Australian Dollar strengthens against the respective currency. For a weakening Australian Dollar against the respective currency there would be an equal and opposite impact on the profi t and other equity and the balances below would be negative.

2011 2010 Equity Equity increase/ increase/ Profi t/(loss) (decrease) Profi t/(loss) (decrease) $ $ $ $

AUD strengthens 10% ZAR 125,148 (125,148) 5,163 (5,163) GBP 82,057 (82,057) – – US 2,230 (2,230) 116 (116)

AUD weakens 10% ZAR (125,148) 125,148 (5,163) 5,163 GBP (82,057) 82,057 – – US (2,230) 2,230 (116) 116

Note: foreign currency gains or losses on inter-company loans are transferred to equity in accordance with note 18. Therefore there is no impact on profi t.

189

Notes to the fi nancial statements (continued)

Note 26: Financial risk management objectives and policies (continued)

(e) Equity price risk

In the prior year, the Group was exposed to equity price fl uctuations arising from its available-for-sale investment.

The following table details the Group’s sensitivity to a 10% increase and decrease in the share price of Northern Uranium Limited (“Northern”). A 10% sensitivity rate represents management’s assessment of the possible change in Northern’s share price given the relatively illiquid nature of such small cap stocks. The sensitivity analysis includes only the shares held in Northern as at 30 June 2010 and adjusts the price at 30 June 2010 for a 10% change. The shares held in Northern were sold during the year.

2011 2010 Equity Equity increase/ increase/ Profi t/(Loss) (decrease) Profi t/(Loss) (decrease) $ $ $ $

+ 10% – – 88,166 (88,166)– 10% – – (88,166) 88,166

(f) Fair value

The fair value of a fi nancial asset or fi nancial liability is the amount at which the asset could be exchanged or liability settled in a current transaction between willing parties after allowing for transaction costs.

The fair values of cash, trade and other receivables and trade and other payables approximate their carrying values, as a result of their short maturity or because they carry fl oating rates or interesting.

(i) Fair value of fi nancial instruments measure at fair value

During the year the Group entered into a forward subscription agreement, details of which are provided in note 14. This agreement requires the Company to issue a variable number of shares in exchange for ZAR 15 million. A change in the Group’s share price impacts the value of the subscription agreement obligations and as a result the Group is exposed to equity price risk.

In the prior year, the Group held shares in Northern, which were valued using quoted market prices.

For fi nancial instruments carried at fair value the Group adopts various methods in estimating fair value. The methods comprise:

Level 1 – the fair value is calculated using quoted prices in an active market;

Level 2 – the fair value is estimated using inputs other than quoted prices included in the Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices);

Level 3 – the fair value is estimated using inputs for the asset or liability that are not based on  observable market data.

For fi nancial instruments not quoted in active markets, the Group uses valuation techniques such as other relevant models used by market participants which may include inputs derived from quoted prices in an active market (Level 2). This valuation techniques use both observable and unobservable market inputs. The fair value of this the forward subscription agreement is based on this valuation technique.

The following table details the Group’s sensitivity to a 10% increase and decrease in the share price of the Company (AUD) against the forward subscription agreement obligation (2011: $8,416,623: 2010: Nil), which is designated as “Level 2”. 10% represents management’s assessment of the possible change in the Company’s share price. The sensitivity analysis includes only the forward subscription obligation which is equity settled and adjusts the obligation at the period end for a 10% change in the share price of the Company.

190

Notes to the fi nancial statements (continued)

Note 26: Financial risk management objectives and policies (continued)

(f) Fair value (continued)

2011 2010 Equity Equity increase/ increase/ Profi t/(Loss) (decrease) Profi t/(Loss) (decrease) $ $ $ $

+ 10% (1,048,960) 1,048,960 – –– 10% 1,048,960 (1,048,960) – –

The following table details the Group’s sensitivity to a 10% increase and decrease in the AUD/ZAR exchange rate against the forward subscription agreement obligation. 10% represents management’s assessment of the possible change in foreign currency rates. The sensitivity analysis includes only the forward subscription obligation which is equity settled and adjusts the obligation at the period end for a  10% change in foreign currency rates.

2011 2010 Equity Equity increase/ increase/ Profi t/(Loss) (decrease) Profi t/(Loss) (decrease) $ $ $ $

+ 10% (188,452) 188,452 – –– 10% 188,452 (188,452) – –

The following table details the Group’s sensitivity to a 25% increase and decrease in the share price of   the available-for-sale investments (2011: Nil; 2010: $909,678), which is designated as “Level 1”. The   reasonably possible change of 25% has been selected as it is considered reasonable given the current and recent trend and volatility of both Australian and international stock markets.

2011 2010 Equity Equity increase/ increase/ Profi t/(Loss) (decrease) Profi t/(Loss) (decrease) $ $ $ $

+ 25% – – 227,419 227,419– 25% – – (227,419) (227,419)

Note 27: Parent entity information

2011 2010 $ $

Current assets 7,308,975 1,410,992Total assets 7,310,598 1,415,893Current liabilities 198,013 319,908Total liabilities 8,614,636 319,908Issued capital 31,440,500 16,194,722Retained earnings (35,992,192) (17,279,768)Reserves 3,247,654 –Total shareholders’ equity 11,430,110 1,095,985Loss of the parent entity (18,702,775) (13,704,311)Total comprehensive income (18,702,775) (13,704,311)

191

Notes to the fi nancial statements (continued)

Note 27: Parent entity information (continued)

On 30 November 2009, Ferrum Crescent Limited (formerly Washington Resources Ltd) (“FCL”) completed the legal acquisition of Ferrum Metals Limited (formerly Ferrum Crescent Limited) (”FML”). Under the terms of AASB 3: Business Combinations (Revised), FML was deemed to be the accounting acquirer in the business combination. The transaction has therefore been accounted for as a reverse acquisition. The Parent entity therefore has issued capital of $31,440,500 as opposed to the Group’s consolidated issued capital of $27,392,728. For further details please refer to the disclosures contained within the 30 June 2010 fi nancial report.

There have been no guarantees entered into by the parent entity in relation to any debts of its subsidiaries.

The parent entity has no contingent liabilities as at 30 June 2011 (2010: Nil).

Note 28: Subsequent events

There were no reportable subsequent events to balance date.

II. ADDITIONAL INFORMATION REQUIRED BY THE JSE

Additional information required by the JSE Listings Requirements which does not form part of the historical fi nancial information:

Headline earnings reconciliation 2011 2010

Loss attributable to ordinary equity holders of the parent entity (8,141,794) (7,404,546)

Add back: Goodwill written off 2,018,018 Add back: IAS 16 loss on the disposal of plant and equipment 2,240 – Add back: Impairment of available -for -sale fi nancial assets – 1,573,981 Less: Profi t on sale of available -for -sale investments (665,242) (5,378) Less: Profi t on sale of Tenements (600,000) Total tax effects of adjustments – – Total non-controlling interest effects of adjustments – –

Headline earnings (9,404,796) (3,817,925)

Basic loss (8,141,794) (7,404,546) Weighted average shares in issue 245,275,224 126,346,059 Basic loss per share (0.03) (0.06)

Headline loss (9,404,796) (3,817,925) Weighted average shares in issue 245,275,224 126,346,059 Headline loss per share (0.04) (0.03)

Net asset/(liability) value (1,902,104) 1,016,527

Total number of shares in issue 292,246,705 26,882,823

Net asset/(liability) value per share (0.01) 0.04

Net tangible asset/(liability) value (1,902,104) 1,016,527

Total number of shares in issue 292,246,705 26,882,823

Net tangible asset/(liability) value per share (0.01) 0.04

192

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196

ANNEXURE 8

ACQUISITIONS OF COMPANIES, BUSINESSES AND PROPERTIES

ACQUISITIONS

As at the last practicable date, Ferrum Crescent and its subsidiaries had entered into the following agreements for the acquisition of companies, businesses and properties since the acquisition by the company of Ferrum Metals in December 2009:

Tenement Sale Agreement between the Company with Northern Uranium Limited and dated 15 November 2010 (“sale agreement”)

The company entered into an agreement with Northern Uranium Limited (“Northern”), a company listed on the ASX, whereby Northern acquired all of the company’s interests in exploration or mining tenements in Australia. The agreement is dated 15 November 2010 and was subject to the receipt of any necessary approvals under relevant mining legislation in Western Australia and the Northern Territory (of Australia).

Under the sale agreement, the company transferred any legal title that it held or in which it had an interest and assigned its benefi cial interest in all tenements that it did not hold legally. Upon completion of the sale agreement, Northern assumed the company’s obligations in respect of any joint ventures in which the company had an interest, and the parties entered into deeds of assignment and assumption in respect thereof. The company delivered all technical information in its possession in respect of the interests that were transferred (“mining information”).

The purchase price for the package was A$600 000.

The company gave the following representations and warranties to Northern under the sale agreement:

“• To the best of its knowledge, the tenements are in full force and effect in accordance with the Corporations Act and any other applicable laws and in particular, but without limitation, all rentals, rates, taxes, payments and work required to be paid or done in connection with the tenements have been paid and done and all conditions and obligations specifi ed or relating to the tenements have been duly complied with except where expenditure exemptions have been granted or applied for;

• Except as provided in the sale agreement, the tenements are free of all third party interests arising through the company;

• Except as provided in the agreement, no person other than the company has any right to explore for or mine for minerals in any part of the tenements;

• There is no dispute or litigation, arbitration or other legal proceedings concerning the tenements pending or threatened of which the company has had notice or is otherwise aware, or ought on reasonable enquiry to be aware, and which may impair in any way any rights in respect of the tenements;

• There are no environmental liabilities relating to or affecting the tenements, nor are there any circumstances relating to the tenements which may reasonably be expected to give rise to future environmental liabilities;

• To the best of its knowledge, the mining information is complete and accurate in all material respects; and

• To the best of its knowledge, all native title procedures required to be followed in relation to the grant of the tenements have been complied with in all respects.”

Northern acknowledged that it acquired the tenements subject to any native title claim in relation to them and that the company makes no warranty as to whether native title exists over any of the tenements.

The company indemnifi ed and will keep indemnifi ed Northern from and against all actions, claims, demands, suits, losses, damages, costs, expenses (including all reasonable legal costs and expenses) and any other liabilities whatsoever which may be incurred, suffered or sustained by Northern arising in consequence of any of the above representations or warranties being incorrect.

There is a two-year time limitation on making a claim in respect of such indemnity and the company’s liability is limited to the aggregate of the sale consideration (A$600 000).

Northern’s address is: Level 1, 26 Greenhill Road, Wayville, SA, 5034, Australia.

197

Heads of Agreement for Farm-in Joint Venture Agreement between Red Desert Minerals Pty Ltd, a company listed on the ASX, (“RDM”) and FCR dated 23 April 2008 (“HOA”)

Although described as a “Heads of Agreement” (“HOA”) this document is expressed to be executed as an agreement and the parties acknowledge the creation of legally binding rights and obligations in relation to the subject matter. The HOA recites that RDM wishes to form an unincorporated contractual joint venture with the company to explore for all minerals other than the Excluded Minerals (as defi ned in the HOA) and, if warranted, develop mining operations on the tenement which is the subject matter of application for exploration licence EL25434 in Australia made by the company.

Under the terms of the HOA:

(a) RDM (a wholly-owned subsidiary of Western Desert Resources Limited) can earn up to an 80% interest in the joint venture by funding exploration expenditure totalling A$1.05 million within fi ve years of date of grant of the tenement;

(b) The company has no obligation to contribute to joint venture expenditure until RDM earns a 51% interest in the joint venture by sole funding AUD350 000 of Allowable Expenditure (as defi ned in the HOA) by the second anniversary of the date of the grant of the tenement (subject to RDM then exercising an option to sole fund an additional A$700 000 of Allowable Expenditure within three years of the date of the exercise of the option to earn an additional 29% interest in the joint venture);

(c) If a party is required to contribute to expenditure of the joint venture but does not wish to contribute it may elect to dilute. If the interest of either party reduces to less than 10% then the relevant party must assign the interest to the other party for no consideration and the fi rst party will become entitled to a 1.5% Net Smelter Return royalty upon assignment of the interest; and

(d) A party must not assign to any third party its rights, interests and obligations under the HOA or transfer its interest in the joint venture without fi rst offering the rights on the same terms and conditions to the other party and (except an assignment by a party of its rights to a related body corporate) obtaining the other party’s written consent to the proposed assignment (such consent not to be unreasonably withheld or delayed). Where the assignment to the third party is proposed to be for non-cash consideration, the offer to the other party must include a cash alternative which is equivalent in value to the non-cash consideration. The assignee must enter into a deed of assignment and assumption with the assignor and the other party.

The relevant tenement has yet to be granted in respect of this HOA.

Western Desert Resources Limited’s address is: Unit 10, Level 2, 12 – 14 Thelma Street, West Perth, Western  Australia, 6005.

198

ANNEXURE 9

MATERIAL CONTRACTS

As at the last practicable date, Ferrum Crescent and its subsidiaries had entered into the following material agreements since the acquisition by the company of Ferrum Metals in December 2009.

1. AGREEMENT WITH RICHMOND RESOURCES PTY LTD

By way of letter dated 30 March 2010 from Robert Van der Laan on behalf of Richmond Resources Pty Ltd (“Richmond”), the company has entered into a services agreement with Richmond pursuant to which it has been granted a licence to occupy the premises leased by Richmond at Unit 1, 135 Great Eastern Highway, Rivervale WA 6103. The agreement has been terminated by mutual agreement.

The letter specifi es that:

(a) The company is licensed from time to time as required, while Richmond holds a lease of the premises, to occupy offi ces and workspaces within the premises for the purpose of maintaining its registered offi ce and principal place of business;

(b) Richmond will provide to the company offi ce facilities, including consumables and utilities, furniture, photocopiers, computers and servers, telephones and scanners and the services of administrative support personnel as required;

(c) The company is licensed to store corporate records on the premises;

(d) The company will pay to Richmond a licence fee of A$4 000 per month for the above licence (indexed to the CPI for Perth, Western Australia) and a fee for the above services which are based upon their cost to Richmond plus 5%. Richmond will charge a rate of A$65.00 per hour for administrative staff and a rate of A$67.50 per hour for geological staff;

(e) The company agrees to indemnify and hold harmless Richmond in respect of any loss or damage to Richmond arising out of the negligence or default of the company or its offi cers, agents or licensees arising through their use or occupation of the premises. The company must maintain public liability insurance cover of not less than A$1 000 000 in respect of its occupation of the premises and must ensure that Richmond is noted as a benefi ciary under that policy.

2. BEE ACQUISITION AGREEMENT

On 4 November 2010, a company within the group, Nelesco, entered into agreements whereby its interest in the Moonlight Iron Ore Project will be increased from the current level of 74% to approximately 82%. The details of the agreement are set out in paragraph 7 of this pre-listing statement.

On 22 June 2011 Ferrum Crescent announced that the company had entered into an off-take agreement with Duferco, a leading private company in the trading, mining, and end use of iron and steel products and raw materials for the steel industry, which is based in Switzerland.

The off-take agreement with Duferco covers up to 6Mt of anticipated iron ore pellet production from Ferrum Crescent’s Moonlight Iron Ore Project. Under the agreement, Ferrum Crescent will sell Duferco all of its production available for export (in total 4.5Mt) and will give Duferco a fi rst right of refusal over an additional 1.5Mt per year to the extent that the product is not sold domestically.

The off-take agreement has an initial fi ve year term commencing when the Moonlight Iron Ore Project plant   operations reach full production, and the term is automatically renewed for a further period of fi ve   years unless one of the parties elects to terminate the agreement within the fi nal six months of  any  fi ve year period. The agreement contains termination mechanisms in the case of specifi ed failure to perform or a party’s insolvency.

In addition, either party may terminate the agreement in the case where a single shareholder holds 50% or more of Ferrum Crescent’s voting capital.

The agreement contains standard commercial terms and provisions customarily set out in such contracts.

199

ANNEXURE 10

GUARANTEES GRANTED BY FERRUM CRESCENT AND ITS SUBSIDIARIES

The group has given the following guarantees:

Ferrum Metals

Ferrum Metals has undertaken by way of a guarantee dated 17 June 2008 to the DMR that it will, upon the grant of the application under section 11(1) of the MPRDA to which Nelesco is a party, guarantee the due, proper and punctual payment and/or performance by Nelesco of its guarantee in favour of TMT in respect of all of its obligations to the DMR arising from and/or in connection with the prospecting right LP30/5/1/1/4/402PR relating to the Moonlight Iron Ore Project.

Under section 124(1) of the Corporations Act, Ferrum Metals has the legal capacity and powers of an individual both in and outside this jurisdiction (including the power to give a guarantee).

Nelesco

Nelesco has provided a guarantee in favour of the DMR dated 17 June 2008 for the due, proper and punctual payment and/or performance by TMT of all of its obligations to the DMR arising from or in connection with the prospecting right LP30/5/1/1/4/402PR relating to the Moonlight Iron Ore Project. The obligations under this guarantee are both fi nancial and performance-based (for example, the DMR can oblige Nelesco to carry out the rehabilitation obligations required pursuant to the prospecting right LP30/5/1/1/4/402PR).

TMT

The rehabilitation and closure costs of the exploration activities of TMT (on an unplanned closure basis) have been estimated by Metago Environmental Engineers Pty Ltd (being the fi rm commissioned by TMT to update the fi nancial provision associated with TMT’s exploration activities) at an amount of ZAR271 155. As security for this rehabilitation obligation, TMT has deposited an amount of ZAR12 000 in a rehabilitation trust in accordance with the requirements of the DMR. Pursuant to a revised rehabilitation liability assessment made by Metago Environmental Engineers Pty Ltd, the DMR’s requested that TMT increase this rehabilitation security and, accordingly, TMT deposited a further ZAR265 000 in its rehabilitation trust in satisfaction of the DMR’s requirements.

200

ANNEXURE 11

DIRECTORSHIPS IN OTHER COMPANIES IN THE PAST FIVE YEARS

Other directorships held by the directors of Ferrum Crescent during the previous fi ve years, not already set  out in paragraph 13 of the pre-listing statement, are set out below:

Name of director Directorships Status

Edward Nealon Tanzanite One Ltd Current Condoto Platinum NL Current Sylvania Resources Ltd Resigned Almaretta Pty Ltd Resigned Danwell Holdings Pty Ltd Resigned Athlone International Consultants Pty Ltd Resigned

Robert Hair Batavia Ltd Current Belena Investments Pty Ltd Current Camcove Pty Ltd Current Carpentaria Exploration Ltd Current Elsinore Energy Pty Ltd Current Foreks Pty Ltd Current Global Carbon Credits Pty Ltd Current Shelter Management Pty Ltd Current Shelter Management USA Inc Current Sigma Resources Pty Ltd Current Foreks (UK) Ltd Resigned Northern Uranium Ltd Resigned

Kofi Morna Aquarius Platinum Ltd Current Platinum Mile Pty Ltd Current Ridge Mining Pty Ltd Current Watervale Platinum Pty Ltd Current Savannah Platinum Pty Ltd Current Malibongwe Platinum Pty Ltd Current Savannah Resources Pty Ltd Current Hall Core Drilling Pty Ltd Current Mkhombi Mining Pty Ltd Current Mkhombi Holdings Pty Ltd Current Mkhombi Services Pty Ltd Current Mkhombi Investments Pty Ltd Current Mkhombi AmaMoto Pty Ltd Current Metanza Furnace Technologies Pty Ltd Current Metanza UG2 Processors Pty Ltd Current Delta Iron Ore Pty Ltd Current

Theodore Droste Bay Precision and Mining Pty Ltd Current Hatch Africa Pty Ltd Current TC Droste Investments Pty Ltd Current

Klaus Borowski AMT CC Pty Ltd Current Krupp SA Pty Ltd Resigned IMS Pty Ltd Resigned IMG Pty Ltd Resigned Cabris Pty Ltd Resigned Britech Pty Ltd Resigned

201

Name of director Directorships Status

Grant Button Magnum Mining and Exploration Ltd Current Sylvania Platinum Ltd Current Sylvania Resources Pty Ltd Current Realm Resources Ltd Current Wilberforce Pty Ltd Current Daydreamers Pty Ltd Current Twinloop Nominees Pty Ltd Current SA Metals Pty Ltd Current Pan Palladium Australia Pty Ltd Current Great Australian Resources Pty Ltd Current Tantalite Valley Estates (TVE) Current Tameka Shelf Company Four Pty Ltd Current Namibian Tantalite Investments (NTI) Current Alamar Resources Ltd Resigned

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ANNEXURE 12

DIRECTORS’ SERVICE CONTRACTS

Certain directors of Ferrum Crescent provide services to the company by way of service agreements. The  key  terms of each of their agreements are summarised below:

Executive directors

Mr Edward Nealon

This agreement is constituted by way of letter dated 15 October 2010 from the company addressed to Mr Nealon by which the company engages the services of Mr Nealon as executive chairman.

The agreement provides that:

(i) Mr Nealon is responsible for promotion of the company and assisting the managing director in the running of the general operations and fi nancial business of the Company, in accordance with the delegated authority of the board;

(ii) Mr Nealon’s salary will, unless otherwise agreed or varied, from 1 January 2011 be A$80 000 per annum plus applicable compulsory superannuation, payable monthly;

(iii) The company will reimburse Mr Nealon the costs associated with carrying out business for the company, including the costs of travel and accommodation away from home and the costs of telephone and other communications incurred in carrying out such business;

(iv) Mr Nealon will be offered participation in any employee incentive plan that may be approved by the directors and shareholders of the company, if and when such plan may be implemented;

(v) The services may be terminated by either party without cause by giving not less than three months’ notice, provided that in the event that Mr Nealon wishes to terminate he must use all reasonable endeavours to assist the company to procure the services of a person to take over his duties on a permanent basis.

Mr Robert Hair

This agreement is by way of letter dated 13 July 2011 in terms of which, Camcove (Pty) Ltd (“Camcove”) (a company associated with Mr Hair) is invited to provide the services of Mr Robert Hair as managing director of the company.

The agreement provides that:

(i) Mr Hair is responsible for the leadership and management of the company and assisting the executive chairman in the promotion of the company, in accordance with the delegated authority of the board;

(ii) Camcove’s fee will, unless otherwise agreed or varied, from 1 July 2011 be A$22 000 per month plus applicable goods and services tax, payable monthly;

(iii) The company will reimburse Camcove the costs associated with carrying out business for the company, including the costs of travel and accommodation away from home and the costs of telephone and other communications incurred in carrying out such business;

(iv) Camcove will be offered participation in any employee incentive plan that may be approved by the directors and shareholders of the company, if and when such plan may be implemented;

(v) The services may be terminated by either party without cause by giving not less than six months’ notice, provided that in the event that Camcove wishes to terminate it must use all reasonable endeavours to assist the company to procure the services of a person to take over his duties on a permanent basis.

Non-executive directors

Mr Klaus Borowski

This agreement is by way of letter dated 1 September 2010 from the company addressed to Mr Borowski by which the company confi rms Mr Borowski’s appointment as a non-executive director of the company. The letter has been signed by Mr Borowski.

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The agreement provides that:

(i) Mr Borowski will discharge the duties of a non-executive director in accordance with the company’s constitution;

(ii) Mr Borowski’s director’s fee will be A$40 000 per annum and he is entitled to fees and other amounts as the board determines where special duties or services outside the ordinary scope of the duties of a director have been performed;

(iii) The company will reimburse Mr Borowski for the costs associated with carrying out his directorship;

(iv) The directorship will become vacant if Mr Borowski is prohibited from being or ceases to be a director under the Corporations Act, becomes bankrupt, is of unsound mind, resigns, is not re-elected or is removed pursuant to the Company’s constitution.

The agreement further sets out the responsibilities of Mr Borowski’s role and contains provisions relating to the declaration of interests as a director, compliance with the company’s policy for trading in company securities, protection of confi dentiality and an agreement not to compete with the company.

Mr Kofi Morna

This agreement is by way of letter dated 15 October 2010 from the company addressed to Mr Morna by  which  the company confi rms Mr Morna’s appointment as a non-executive director of the company. The  letter has been signed by Mr Morna.

The agreement provides that:

(i) Mr Morna will discharge the duties of a non-executive director in accordance with the company’s constitution;

(ii) Mr Morna’s director’s fee will be A$40 000 per annum and he is entitled to fees and other amounts as the board determines where special duties or services outside the ordinary scope of the duties of a director have been performed;

(iii) The company will reimburse Mr Morna for the costs associated with carrying out his directorship;

(iv) The directorship will become vacant if Mr Morna is prohibited from being or ceases to be a director under the Corporations Act, becomes bankrupt, is of unsound mind, resigns, is not re-elected or is removed pursuant to the company’s constitution.

The agreement further sets out the responsibilities of Mr Morna’s role and contains provisions relating to the declaration of interests as a director, compliance with the company’s policy for trading in company securities, protection of confi dentiality and an agreement not to compete with the company.

Mr Theodore Carl Droste

This agreement is by way of letter dated 3 May 2010 under the terms of which, TC Droste Investments (Pty) Ltd  (“Droste Investments”) (a company associated with Mr Droste) is invited to provide services to the company effective from 1 May 2010. Droste Investments will through Mr Droste (or, if he personally is not available either permanently or from time to time, through another individual nominated by Droste Investments who is acceptable to the board) carry out the role of technical and commercial consultant for  the  company.

The agreement provides that:

(i) Droste Investments is responsible to the managing director and to the board for the provision of services in relation to government, marketing of product, advice on processing alternatives and working closely with engineers and other technical personnel on the company’s projects and fi nancial personnel in relation to feasibility studies and fi nancing;

(ii) The fees payable to Droste Investments will, unless otherwise agreed or varied, be A$7 500 per month (excluding VAT, where applicable) engaged in providing the services. It is acknowledged and agreed that the fees payable are calculated on the basis that Droste Investments will supply Mr Droste’s services as and when required for the company to carry out its strategic plans to become an iron product producer in South Africa and that Mr Droste will be so available to provide the services, with a notional availability of 30 hours per month;

(iii) The consultancy may be terminated by either party without cause by giving not less than three months’ notice, provided that in the event that Mr Droste wishes to terminate he must use all reasonable endeavours to assist the company to procure the services of a person to take over his duties on a permanent basis.

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The agreement also sets out the responsibilities of the role and contains provisions relating to the protection of confi dentiality and of the company’s intellectual property.

The company has also entered into an agreement by way of letter dated 15 October 2010 from the company addressed to Mr Droste by which the company confi rms Mr Droste’s appointment as a non-executive director of the company. The letter has been signed by Mr Droste.

The agreement provides that:

(i) Mr Droste will discharge the duties of a non-executive director in accordance with the company’s constitution;

(ii) Mr Droste’s director’s fee will be A$40 000 per annum and he is entitled to fees and other amounts as the board determines where special duties or services outside the ordinary scope of the duties of a director have been performed;

(iii) The company will reimburse Mr Droste for the costs associated with carrying out his directorship;

(iv) The directorship will become vacant if Mr Droste is prohibited from being or ceases to be a director under the Corporations Act, becomes bankrupt, is of unsound mind, resigns, is not re-elected or is removed pursuant to the company’s constitution.

The agreement further sets out the responsibilities of Mr Droste’s role and contains provisions relating to the declaration of interests as a director, compliance with the company’s policy for trading in company securities, protection of confi dentiality and an agreement not to compete with the company.

Mr Grant Button

This agreement is by way of letter dated 15 October 2010 from the company addressed to Mr Button by  which  the company confi rms Mr Button’s appointment as a non-executive director of the company. The letter has been signed by Mr Button.

The agreement provides that:

(i) Mr Button will discharge the duties of a non-executive director in accordance with the company’s constitution;

(ii) Mr Button’s director’s fee will be A$40 000 per annum and he is entitled to fees and other amounts as the board determines where special duties or services outside the ordinary scope of the duties of a director have been performed;

(iii) The company will reimburse Mr Button for the costs associated with carrying out his directorship;

(iv) The directorship will become vacant if Mr Button is prohibited from being or ceases to be a director under the Corporations Act, becomes bankrupt, is of unsound mind, resigns, is not re-elected or is removed pursuant to the company’s constitution.

The agreement further sets out the responsibilities of Mr Button’s role and contains provisions relating to the declaration of interests as a director, compliance with the company’s policy for trading in company securities, protection of confi dentiality and an agreement not to compete with the company.

PRINTED BY INCE (PTY) LTD REF. W2CF13 253

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