AFRICA’S GOLD MINING INDUSTRY… Looking back 20 years – can we learn from the past? Who are the stakeholders? Looking ahead – opportunities and impediments

Commodity prices…the past 20 Years

1200

Commodity prices indexed to 100

1000 800 600 400 200 0

London Gold (PM Fixing $/ozt)

Brent Crude Oil (ICE $/bbl)

Copper (LME Cash $/t)

Iron Ore 62% Fe, FOB

Past 20 years of mining… 1000

Equity index prices indexed to 100

900 800 700 600 500 400 300 200 100 0

HUI Gold Index Dow Jones Global Oil & Gas Total Stock Market Index Copper Index Iron Ore Index

Market cap of mining sector…value creation or destruction? The mining sector experienced a ~50% contraction from its peak of ~$2.3T in 2011 to just over $1.1T in mid-2013 and has retreated further to just below ~$1.0T today  approaching bottom of Global Financial Crisis

US$ billion

$2.3T

$2 500 $2 250

Diversifieds / Base Metals

$2 000

Gold / Silver

$1 750

$2T

Other

$1 500

$1.1T

$1 250 $1 000

$985B

$750 $500

$235B

$250

$735B 30% CAGR (2003 to 2011)

11% CAGR (2003 to present)

-2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Scotiabank

World gold mine production…a shift in geography and risk profile

1993

2013

Africa...will it overtake China and other emerging markets as the global economic engine? Stronger trade and economic ties 8 of continent’s fastest growing economies not dependent on oil or mining

Democracy spreading through the continent African leaders made more accountable for providing basic services and infrastructure More efficient financial services

Growth supported by high commodity prices and increased foreign investment African global growth likely to increase with slowdown of China

OBSTACLES Political volatility and corruption Transparency and compliance Legislative and regulatory issues Infrastructure and Power Skills shortage

Investing in Africa…barriers to beat Productivity – industry pursuing volume growth at any cost during the boom in commodity prices Capital access – a critical challenge for junior miners and effective capital allocation – not a once off reaction to market conditions but a continuous cycle of review Social licence to operate – balancing immediate stakeholder demands with inherent value of being a socially and environmentally reliable operator Resource nationalism – balance between promoting investment and maximising in country benefits Capital projects – failure to keep them on time and on budget Price and currency volatility – changes in customer buying preferences Infrastructure access – financing, ownership Skilled rather than unskilled workers – focus on increasing productivity Access to water and energy – unreliable power supply and rising energy costs

Africa…are we prepared to waste 20 years of progress? 1995

2015 GDP growth

Perception of political risk Labour employment Communication Infrastructure Emerging markets – World Bank and UN driven End of ‘Cold War’ End of apartheid – no business into Africa BRIC absent Market cap based on intangibles

Skills development and innovation Scramble for resources - commodity prices, tax models Return to democracy – more accountable politics Boom in communication Infrastructure development – social changes New trade zones Satellite technology and new ways of doing business Energy sources

Africa’s future needs the mining sector and long term economic plans… Responsible and accountable politics with along term outlook

Low commodity prices

High commodity prices

Social media driven, populist politics with a short term outlook

Viability of Africa’s Mining industry… lost opportunities Overview of companies covered

US$ billion 100 90

AFRICA

80 70 60 50 40 30 20 10

Mining code legislation changes Mining codes currently under review Sources: EY Research, Deloitte, Randgold

0 Market Cap Outstanding Impairments (Feb 2015) Debt 2013 + 9 mnths 2014 Source: Barclays / Company Reports

Together we can deliver a better future… Responsibility of mining companies:

Governments

Responsibility of Governments:

NGO’s and Attract first world finance Guard against Regulators exploitation of equity markets at expense of host country Deal honestly and transparently with governments Create jobs Mining Transfer skills Companies Employees Support local and and suppliers Investors Communities Have meaningful social responsibility programmes Mine profitably, pay taxes

Provide enabling platform for business Provide or incentivise development of infrastructure Mining legislation to enable investment, conducive to fiscal and legal stability, as well as good governance Provide regional safety and security