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OBJECTIVES OF THE PRESENTATION

PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE FOR MINERAL RESOURCES ON THE ALEXKOR DEVELOPMENT FOUNDATION 27th OCTOBER 2010. OBJECTIVES OF THE PRESENTATION. The following will be covered: 1. BACKGROUND ON THE ALEXKOR DEVELOPMENT FOUNDATION.

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OBJECTIVES OF THE PRESENTATION

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  1. PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE FOR MINERAL RESOURCES ON THE ALEXKOR DEVELOPMENT FOUNDATION 27th OCTOBER 2010

  2. OBJECTIVES OF THE PRESENTATION The following will be covered: 1. BACKGROUND ON THE ALEXKOR DEVELOPMENT FOUNDATION

  3. BACKGROUND ON THE ALEXKOR DEVELOPMENT FOUNDATION (ADF) • ADF was created through a Trust Deed dated 30 November 1993 • Alexkor was the promoter of the foundation and the beneficiaries were the communities of Namaqualand • Namaqualand shall refer to the boundaries of the Namaqualand Regional Services Council • In terms of the Trust Deed, Alexkor was to contribute 30% of its after tax profits to the trust

  4. NAMAQUALAND DISTRICT

  5. ADF BACKGROUND • The objective was to apply the trust income solely for the socio- economic upliftment of underprivileged persons of all communities in Namaqualand • Initially, 4 trustees appointed by Alexkor and 11 trustees appointed by the beneficiaries • Alexkor was entitled to appoint chairperson up to the third annual meeting after which the board would appoint the chairperson at each AGM • Trust would continue indefinitely and may be terminated only by a resolution adopted by a majority of not less than three fourths of the trustees in which case the assets of the trust shall revert to Alexkor • In the event of termination Alexkor’s obligations fall away and are not transferrable to any other trust or institution • Alexkor undertook to pay to the trust an amount equivalent to 30% of after-tax profits annually

  6. ADF BACKGROUND • The Trust was a discretionary trust as far as the allocation and employment of the property of the trust and income • The trustees were required to keep proper accounts and financial statements of the affairs of the trust which would be audited every year • A full annual report was required to be submitted to an annual meeting consisting of representatives of Alexkor and the beneficiaries (including reports on activities supported by statements of income received and payments made) • For the first three years (1993-1996), the management and administration of the trust was to be undertaken by Alexkor. • After expiry of the three years, the trust was to appoint an administrator. Notwithstanding the appointment of the administrator, the overall responsibility for the proper administration of the trust remains vested in the trustees.

  7. ALEXKOR GRANTS TO ADF

  8. ADF BACKGROUND • As a result of the restructuring of Alexkor in 2002/03, a Strategic Equity Partner (SEP) was envisaged to be introduced in the company • It was resolved that Alexkor would withdraw its undertaking to pay the 30% of profits to the trust • In return the Trust, its objectives and responsibilities would be incorporated into an entity known as Namaqualand Development Agency (NAMDA), a Section 21 company to be registered by the Northern Cape Provincial Government and NAMDA would be allocated 10% equity stake in Alexkor • This was premised on the successful restructuring of Alexkor, which did not proceed as anticipated and was discontinued

  9. ADF BACKGROUND • In 2002, ADF was granted a mining contract by Alexkor at Witvoorkop mine dump to generate some income, since the Trust was no longer going to benefit from an after tax profit contribution by Alexkor

  10. ADF INCOME STATEMENT During the period that Alexkor was administering the trust

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