Gold grades

Based on the results of Taung Gold’s own drilling and geophysical exploration efforts and combined with that of previous owners of the Jeanette property, Taung has applied for a consolidation of our neighbouring properties with Jeanette, such that a large scale, coherent mine can be established and worked. Once that is approved, the target is a 9.6Moz JORC/SAMREC compliant Indicated Resource on the Basal Reef and with feasibility work done thus far has resulted in a compliant Probable Reserve of 7.1 Moz in ore that can be brought to surface at an average gold grade of 11.5g/t. Planning is currently at the pre-feasibility level and will progress to a bankable feasibility study. The mine will enjoy cash costs in the lowest quartile on the industry cost curve.

Jeanette has the added advantage of having some infrastructure already in place. We can return the existing ventilation shaft to full operation, initially in part to gain access to the Basal Reef horizon allowing a prompt start to underground development and connection to the mine's new main shafts.

Taung Gold is fortunate in that the Jeanette gold resource is untouched, meaning that its exploitation can be planned and implemented holistically. The mining method to be employed at Jeanette will be highly mechanised and will enable class leading productivity levels to be achieved. Jeanette will become a new generation South African gold mine and our initial estimates are that Jeanette can look forward to a mining life exceeding 30 years.

Jeanette gold mine [photo]

The Khaki Shale

Mining of the gold bearing Basal Reef in other neighbouring areas has been problematic as a result of the thick Khaki Shale that overlies the gold-bearing reef. However, the Khaki Shale in the Jeanette area averages just 1.7 metre in thickness (compared to up to 6 metres elsewhere) and that can be safely removed prior to extraction of gold-bearing ore, resulting in lower levels of dilution. Essentially, a historical challenge will be turned into a very substantial opportunity.

Instead of trying to support the narrow band of Khaki Shale above the narrow gold reef as was unsuccessfully attempted at other mines when mining techniques were less advanced, we will first mine out the shale and use it to backfill the areas where ore is being extracted. It is a novel technique developed by Taung Gold's independently led Khaki Shale Committee, headed by Professor Jim Porter of the University of the Witwatersrand's Centre for Mining and Mechanisation Systems and supported by various recognised industry experts. Apart from removing what would have, several decades ago, been a potential safety hazard; removing the shale leaves more headroom for miners extracting the narrow reefs of gold-bearing ore and opens up the opportunity to produce a much higher grade of hoisted ore as dilution can be minimised.

South African gold mines [graph]

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