Presentation to: Presentation to:

Portfolio Committee on Public Portfolio Committee on Public

EnterprisesEnterprises

31 October 200731 October 2007

Content

• Opening Remarks and Introduction

• Background on Alexkor

• Latest Health and Safety Statistics

• Summary of 2007 Financial Year Results

• Overview of Corporate Plan and its Implications on Alexkor

• Initiatives Taken to Improve Performance and Challenges

• Operational Conclusion and Options Considered

• Positive Developments Related to Settlement of Land Claim

• Social Contribution and Employment Statistics

• Update on Litigation Matters

• Introduction

• Report back on issues in previous briefing:

• Alexkor required to present a clear and longer term strategic plan in

2007 briefing

• Alexkor expected to show steady improvements in its performance

since the last briefing

• Additional information related to tonnages, costs and income per

mining area to be provided with future briefings

• Report on progress made with implementation of the company’s

strategic objectives

Opening Remarks and Introduction

• Alexkor is an incorporated company that owns mining rights on land and

sea and extracts rough diamonds for sale on the open-market.

• Various ancillary services/operations evolved over the years in support of

the local economy, local community and surrounding regions. These

include agricultural and maricultural activities, airport, town maintenance

and provision of potable water.

• In lieu of Alexkor’s long-term strategy, the above ancillary

services/operations have been identified as non-core activities as part of

an appropriate exit strategy.

Company Background

Organisational Structure

Citrus

Crops

Fodder

Dairy

Ostrich

Mariculture

Agriculture

Alexander Bay Mining(ABM)

Alexkor Ltd(Administration)

Land Mining

Sea Mining

Alexander Bay Trading (ABT)

Non-Core

Airport

Town

Guesthouse

Fuel Station

Vision

To transform Alexkor into a competitive and sustainable mining company that

will contribute positively towards the needs of all stakeholders.

Mission

To maximise profits from the sustainable exploitation of the resource, thereby

ensuring satisfactory returns to its shareholder and make a contribution towards

the socio-economic upliftment of the region. This will be achieved in

accordance with all statutory and regulatory requirements.

Alexkor Mining Rights

Primary Source of Income and Cash Flows

Annual Changes in Carat Production - Total AlexkorIndex Based on 1992 Carat Production (Highest in the last 16 yrs)

0

50

100

150

200

250

300

350

400

450

1992 1994 1996 1998 2000 2002 2004 2006 2008

Period

Ind

ex

Total

1992 Base

Land

Sea

Index Land: 100 = 166201 Marine: 100 = 19262Total: 100 = 185563

Health and Safety Statistics

• Regretfully, a diver died in an underwater incident that occurred on 27 September 2007

• Achieved 1000 DME FFPS in May 2007, the second in three years;

• Improvement in the Northern Cape open-cast mine competition from position 13 (last) to position 7 since previous FY;

• Significant decrease in number of LTI and RI YTD

RI LTI Fatal Dressing FFPS Total

2005/2006 Number of Injuries 4 7 2 14 559 27

Rate (Injuries/mmhrs) 0.41 1.13 0.21 2.57

2006/2007 Number of Injuries 7 8 0 9 816 24

Rate (Injuries/mmhrs) 0.77 1.65 0 0.60

2007/2008 Number of Injuries 2 1 2 2 5

YTD Rate (Injuries/mmhrs) 0 0.5 0.25 0.5 1.24

Injury Classification

Summary of 2006/07 Financial Results• Diamond production decreased by 21.9% from 43,207 carats to 33,765 carats.

• Total revenue down 13.6% to R133.7m from R154.8m in 2006.

• Diamond production income decreased by 15.3% from R129.1m during 2005/06 to

R109.3m during 2006/07.

• The operating loss decreased to R27.3m (2006: R209.7m).

• Impairment of assets by R235.7m in anticipation for lower compensation value for

assets earmarked for transfer to the community

• Major non-cash adjustments made:

– Increase in Environmental rehabilitation liability by R19.9m (2006: R160.0m)

– Decrease in Post-retirement medical liability of R30.6m (2006: increase R15.7m)

• ABT operating loss increased to R6.5m (2006: R4.1m)

• Non-core activities loss increased to R11.9m (2006: R6.9m)

Consolidated Financial Performance at 31 March 2007Restated

Notes

Revenue 133 657 847 154 758 244

Cost of sales (156 390 750) (143 485 302)

Gross operating (loss)/profit (22 732 903) 11 272 942

Administration expenses and other operating costs (52 819 128) (51 444 846)

Loss on disposal of assets - ( 273 594)

Other income 13 37 600 186 6 334 242

Provision for retirement benefit obligations 9 30 550 575 (15 667 673)

Provision for environmental rehabilitation liability 10 (19 915 847) (159 877 283)

Operating loss 14 (27 317 117) (209 656 212)

Investment income 15 4 456 459 4 134 317

Finance cost 16 ( 12 315) ( 12 977)

Net loss before taxation (22 872 973) (205 534 872)

Taxation 17 3 778 784 -

Net loss after taxation (19 094 189) (205 534 872)

2006R

2007R

Consolidated Financial Position as at 31 March 2007Restated

2007 2006

Notes R RASSETS

Non-current assets 223 579 627 473 812 613

Property, plant and equipment 2 203 525 906 457 340 674 Biological assets 5 1 703 100 1 816 800 Cash held in rehabilitation trust 10 18 350 621 14 655 139

Current assets 111 658 927 65 247 242

Inventories 6 17 059 688 23 393 244 Trade and other receivables 7 16 588 805 6 274 249 Cash and cash equivalents 18.2 78 010 434 35 579 749

Non-current assets classified as held for sale 1 500 000 2 500 000 Diamond boats 4 1 500 000 2 500 000

TOTAL ASSETS 336 738 554 541 559 855

EQUITY AND LIABILITIES

Capital and Reserves (32 978 782) 221 825 560 8Share capital 8 50 000 000 50 000 000 Accumulated loss (253 793 673) (234 699 484) Revaluation reserve 170 814 891 406 525 044

Non-current liabilities 287 102 266 301 456 419 Retirement benefit obligations 9 73 737 000 108 007 000 Environmental rehabilitation liability 10 213 365 266 193 449 419

Current liablities 82 615 070 18 277 876 Trade and other payables 11 31 081 659 13 344 283 Other liabilities 12 51 533 411 4 933 593

TOTAL EQUITY AND LIABILITIES 336 738 554 541 559 855

Consolidated Cashflow Statement as at 31 March 2007Restated

2007 2006

Notes R R

Cash flows from operating activities

Cash flow from operating activities 18.1 (7 068 466) (11 157 677) Interest received 4 456 459 4 134 317 Interest paid ( 12 315) ( 12 977) Taxation received 3 778 784 -

Net cash generated by operating activities 1 154 462 (7 036 337)

Cash flows to investing activities

Replacement of property, plant and equipment (1 253 853) (5 828 323) Proceeds on disposal of property, plant and equipment - 164 500 Expenses to dispose of assets - ( 438 094) Contribution to the rehabilitation trust fund (3 695 482) (3 375 304)

Net cash utilised in investing activities (4 949 335) (9 477 221)

Cash flows from/(to) financing activities - -

Net decrease in unrestricted cash and cash equivalents (3 794 873) (16 513 558)

Unrestricted cash and cash equivalents at the beginning of the year 25 456 288 41 969 846

Unrestricted cash and cash equivalents at the end of the year 21 661 415 25 456 288

Movements in restricted cash and cash equivalents

Restricted cash and cash equivalents at the beginning of the year 10 123 461 9 580 049 Movements for the yearLegal funds (expenses net of interest earned) (2 572 725) 543 412 Government funds (monies received including interest earned) 48 798 281 -

Restricted cash and cash equivalents at the end of the year 56 349 017 10 123 461

Breakdown of Financial Performance

Alexander Bay Mining

Alexander Bay Trading

Town Hospital Other non-

core - Total

Revenue 114 968 672 7 180 852 2 767 075 2 134 118 6 607 130 133 657 847

Gross Revenue 114 968 672 14 569 525 2 767 075 2 139 238 7 747 431 142 191 941 Less: Internal Revenue - (7 388 673) - ( 5 120) (1 140 301) (8 534 094) Cost of sales (119 397 985) (13 551 678) (10 719 319) (5 338 059) (7 383 709) (156 390 750) Gross cost of sales (119 727 071) (21 104 817) (11 132 787) (5 448 979) (7 414 704) (164 828 358) Less: Internal cost of sales 329 086 7 553 139 413 468 110 920 30 995 8 437 608 Gross operating loss (4 429 313) (6 370 826) (7 952 244) (3 203 941) ( 776 579) (22 732 903)

Administration expenses and other operating costs (52 819 128) Other income 37 600 186 Government Funding - financial assistance 32 900 000 Government Funding - specified expenditure 1 208 500 Adminsittrative income 3 491 686 Provision for retirement benefit obligations 30 550 575 Provision for environmental rehabilitation liability (19 915 847) Investment income 4 456 459 Finance costs ( 12 315) Taxation refunded 3 778 784 Net loss after tax (19 094 189)

Alexander Bay Mining

Alexander Bay Trading Town Hospital

Other non-core

Administration Total

Assets attributable to each segment 5 734 961 374 785 197 570 403 8 034 64 177 1 273 546 205 025 906

Revaluation/Impairment adjustments made to Revaluation Reserve (39 945 498) (5 191 203) (183 698 902) - - (6 874 550) (235 710 153)

Revenue Mix

Revenue Mix - 2006/07

Other non-core9%

Alexander Bay Trading

5%

Alexander Bay Mining

86%

Revenue Mix - 2005/06

Alexander Bay Trading

5%

Alexander Bay Mining

87%

Other non-core8%

2006/2007 R133.7 2005/2006 R154.8

Land & Marine Mining – Carat Mix (33,765 ct)

Plan Actual Var Plan Actual VarLand Mining Witvoorkop 2,420 462 (80.91%) 5,200 - (100.00%) Muisvlak 12,269 - - 13,884 71 (99.49%) Alexkor (Own Mining) 17,450 10,506 (39.79%) 9,424 6,759 (28.28%) Contract Mining 4,800 4,932 2.75% 7,100 6,330 (10.84%)

Marine Mining 48,110 17,865 (62.87%) 58,645 30,047 (48.76%)

Total shortfall FY 85,049 33,765 (60.30%) 94,253 43,207 (54.16%) Income (Rm) 232.8 109.3 (112.99%) 241.0 129.1 (86.68%)

CaratsCarats2006/07 2005/06

CARAT MIX 2006 Witvoorkop

0% Muisvlak

0% Marine Mining69% Alexkor (Own

Mining)16%

Contract Mining15%

CARAT MIX 2007

Muisvlak0%

Witvoorkop1%

Contract Mining15%

Alexkor (Own Mining)

31%

Marine Mining53%

Land & Marine Mining – Revenue Mix (R109.3m)

Plan Actual Var Plan Actual VarLand Mining Witvoorkop 9,822,780 3,761,574 (61.71%) 17,576,000 - (100.00%) Muisvlak 12,247,172 741 (99.99%) 11,731,980 96,297 (99.18%) Alexkor (Own Mining) 30,920,808 24,045,794 (22.23%) 16,106,968 9,510,976 (40.95%) Contract Mining 9,741,600 16,338,228 67.72% 11,537,500 17,913,696 55.26%

Marine Mining 170,022,047 65,156,484 (61.68%) 184,081,137 101,536,503 (44.84%)

Total shortfall FY 232,754,407 109,302,821 (53.04%) 241,033,585 129,057,472 (46.46%)

RevenueRevenue2006/07 2005/06

REVENUE MIX 2007 Witvoorkop

3%

Muisvlak0%

Contract Mining15%

Alexkor (Own Mining)

22%

Marine Mining60%

REVENUE MIX 2006 Witvoorkop

0% Muisvlak0%

Contract Mining14%

Alexkor (Own Mining)

7% Marine Mining79%

Overview of 2008 Corporate Plan

• 2008 Corporate Plan based on continuation of current activities

(excluding Health Care Services);

• Budgeted Operating Loss – R70.9m;

• Budgeted Net Loss before Tax – R92.5m (Including provisions);

• Forecasting a R40.0m unfunded shortfall in working capital for the

next twelve months.

Divisional Overview – 2008 Corporate Plan Budget

ABM 123.97 (150.31) (26.34)

Land Mining 53.99 (105.89) (51.90) Own Mining 36.71 (93.25) (56.54) Land Contractors 17.28 (12.64) 4.64

Marine Mining 69.98 (44.42) 25.56

ABT 24.54 (28.29) (3.74) Other Non-Core 4.08 (9.87) (5.79)

Town 2.84 (8.81) (5.97) Hospital - - - Airport 0.14 (0.28) (0.14) Guesthouses 1.10 (0.78) 0.32

Subtotal 152.59 (188.47) (35.87)

Administration (1) 2.85 (37.91) (35.06) Total 155.44 (226.38) (70.93)

1 Security costs have been decentralised from the adminsitration budget.

Revenue ExpenditureOperating

Profit/(Loss)

Personnel expenses (18,110,660) Consumables and Maintenance (1,050,372) General Expenditure (8,217,112) Depreciation (2,205,877) Revenue Split Contractors - Security Services (6,961,176) Legal Costs (600,000) Other Specialised Service (363,708) Internal Charges (398,136)

Current Forecast – 2007/08 Financial YearINCOME STATEMENT

FY2008

Forecast

Revenue 165,423,097

Operating expenses (186,705,267)

Personnel Expenses (47,481,933) Consumables and Maintenance (40,114,876) General Expenditure (15,824,689) Depreciation (13,397,479) Revenue Split Contractors (54,265,429) Security Services (13,096,003) Legal Costs (512,902) Other Specialised Services (2,011,955)

-

Operating loss (21,282,170)

Plus: Interest received 2,552,908

Less: Provisions (Rehab & PRMA) (23,850,000) Plus: Transfer payment (DPE) - Plus: Restructuring -

Net loss before taxation (42,579,262)

CASHFLOW

FY2008

Forecast

Cash Flows From/(To) Operating Activities (12,210,001) Cash receipts from customers 182,631,636 Cash paid to suppliers and employees (197,394,545) Cash generated by operating activities (14,762,909) Interest received 2,552,908 Interest paid -

Cash Flows From/(To) Investing Activities (3,208,652) Replacement of Property, Plant & Equipment (58,301) Contribution to the Rehabilitation Trust Fund (3,150,351)

Cash Flows From/(To) Financing Activities -

Transfers received/(utilised) from Government -

Net Increase/(Decrease) In Cash (15,418,653) Opening Cash And Cash Equivalents 21,661,416 Closing Cash And Cash Equivalents 6,242,763

Available Cash as at 22 October 2007

-10

0

10

20

30

40

50

60

70

80

Apr-0

5

May

-05

May

-05

Jun-

05

Jul-0

5

Aug-0

5

Sep-0

5

Oct-0

5

Nov-0

5

Dec-0

5

Jan-

06

Feb-0

6

Mar

-06

Apr-0

6

May

-06

Jun-

06

Jul-0

6

Aug-0

6

Sep-0

6

Oct-0

6

Nov-0

6

Dec-0

6

Jan-

07

Feb-0

7

Mar

-07

Apr-0

7

May

-07

Jun-

07

Jul-0

7

Aug-0

7

Sep-0

7

Oct-0

7

Ra

nd

mill

ion

s

Breakdown of Closing Cash as @ 22/10/2007

Government Funds set aside for:

• Township establishment: R 18.6m

• Implementation of Deed of Settlement R 20.8m

• Boegoeberg Rehabilitation R 2.4m

Alexkor Funds in trust R 7.8m

Working Capital R 5.1m

Total R54.7m

Impact of Forecast Operational Losses on Alexkor

• Would have been factually insolvent by end of August 2007 - unable to pay salaries and

creditors going forward;

• Reckless trading by Board of Directors;

• Long-term provisions such as post-retirement medical aid (R73.7m) and rehabilitation

(R213.4m) become payable immediately;

HOWEVER

• Alexkor submitted a request for shareholder support for R44.7m, comprising R34.7m to

cover operating losses and R10m for working capital funding, in order to sustain the

operations until 31 March 2008;

• Shareholder facilitated financial support to sustain operations until 31 March 2008;

• PSJV to develop long-term business plan in the interim

Strategic Objectives Defined in December 2005:

1. Establishing a mineral reserve base followed by a LOM plan and reliable business plan

2. Increasing production through full utilisation of existing plants, equipment and labour

3. Reducing units costs and cut-off grade to R26/ton and 1.5ct/100 cubics respectively

4. Assisting in capacity building & amalgamation of marine contractors

5. Developing a proper succession planning and fill in key management positions (i.e. Mine Manager, Metallurgical Mgr, Environmental Mgr)

6. Improving the level of diamond marketing to realise more value from the product

7. Establishing accurate and reliable IT and Financial Control Systems

8. Ring-fencing and transfer of Non-Core Assets – eliminating cross subsidisation

9. Introducing Remote Mining Techniques to reduce over-reliance on diving operations

• Implemented three shift operations for own mining during 2006;

• Initiated diamond sales in open market during April 2006;

• Introduced remote mining vessel during July 2006

• Initiated restructuring of marine contractors to optimise performance

during March 2006;

• Identified an exploration plan for land and marine concessions;

• Identified capital expenditure requirements to sustain current

operations as well as expand production capacity.

Initiatives by Alexkor to Improve Primary Source of Income

Not achievable due to lack of funding

Some Success from the Initiatives are:

• Three shifts resulted in 55% increase in diamond production for own mining in 2007

compared to 2006 results, and commensurate increase of 152% in revenue

• Reduction in unit cost from R 68 in 2006 to R 54 in 2007

• Open market prices: Diamond income only declined by 15%, despite a 23% and

42% decline in carat production and special stone carats respectively

• Reduction in number of contractors from 73 in 2006 to 50 in 2007

• Transfer of the Hospital to NC Health Dept. resulted in savings of R1.5m YTD

However,

• No success from remote mining technique as the technology failed to meet

expectations

• Subsidisation of ABT, town and airport from mining income continued in 2007

Processing results

Noordsif & Voltas Procesing Results

0

10000

20000

30000

40000

50000

60000

70000

Apr May June July Aug Sept Oct Nov Dec Jan Feb Mrt

Month

To

ns

Act FY 05/06 Act FY 06/07 Act FY 07/08 Bud FY 07/08

Alexkor own carats

Total Land "Alexkor" Carats

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Month

Car

ats

Act FY 05/06 Act FY 06/07 Act FY 07/08 Bud FY 07/08

Establishing Financial Control Systems

Risk Identified Actions taken

Historical information difficult to obtain as data not stored at central location and not backed up regularly.

Moving data to a central network location to facilitate ease of access to information and the safeguarding of information through frequent back up of network drives.

Lack of key reports in set systems, i.e. JDE including standard financial statement reports.

Standardisation and implementation of key reports.

Lack of standardisation of management reports in set systems, management report structures and reporting format.

Standardisation of key reports and implementation of process of upgrading the monthly and quarterly reporting pack to ensure the provision of accurate, relevant and timeous management information.

Lack of automation of processes and data manipulation.

Shift focus to systems based reporting.

Lack of detailed reporting timelines to all stakeholders, including SARS, DME, DPE, StatsSA and Reserve Bank

Monthly reporting timetable developed.

Loss of institutional knowledge through loss of long serving staff members.

Aim to implement process of systems “How To” documents to reduce risk of severe interruptions to operations through loss of staff.

Main Operational Challenges

• Mining an inferred resource with

no exploration impacting on grade;

• No production at Muisvlak due to claim;

• Mining operations using old equipment;

• Continuous decline in sea-days

• Continued subsidisation of non-core business activities;

• Fixed cost structure with regards to salaries and town maintenance;

• Recruitment and retention of qualified and skilled human resource

Average Age Of Equipment (hrs) And Number In Use*

0 10 20 30 40

Dump Trucks

Front-End Loaders

Excavators

Dozers

Road MaintenanceEquipment

Rigid trucks

Hours (Thousands)

Equipment Life and Capital Expenditure

Capital Expenditure - Additions

0

10

20

30

40

50

60

70

80

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Periods (Years)

Ran

d (

Mil

lio

ns)

2

2

2

4

6

9

*Includes only running (active) equipment

Decline in Sea-Days

79

61

44

34

23

7

0

10

20

30

40

50

60

70

80

90

2002/03 2003/04 2004/05 2005/06 2006/07 2007/08

Da

ys

Actual Sea Days

Marine Mining Impacted by:

Sea-Day Forecast (Example) – 22 to 28 October 2007

A Sea-day is determined by: Swell

Visibility

Currents

Wind

Operational Conclusion

• For now, initiatives under the control of Alexkor have been exhausted;

• Upside potential that can be realised from current initiatives is limited;

• Only intervention to sustain the operations is through recapitalisation

of the business;

• Recapitalisation linked to land claims case;

• Alexkor forecasts to continue making losses without recapitalisation

Alternative Options Considered

• Board acknowledged that the financial status of the company was not

sustainable;

• Developed a restructuring plan during March 2007 to deal with loss-making

activities:

– Discontinuing Alexander Bay Trading;

– Placing land mining on care and maintenance;

– Retrenchment programme involving approximately 85% of workforce @ a cost of

R16m.

– Budgeted operating loss during 2007/08 reduced from R 70.9m to R18.5m.

• Submitted Section 54 application to obtain Shareholder approval on 13 March

2007;

• Application not approved due to negative impact on land claim negotiations.

Positive Developments

• The Court ratified the Deed of Settlement on 08 October 2007

• The Deed of Settlement signed by the Government, Alexkor and the

Richtersveld Community (RVC) is being implemented;

• A Pooling and Sharing Joint Venture (PSJV) is currently being established to

develop a long-term business plan for the mining operations;

• The transfer of the agricultural division (Alexander Bay Trading – ABT) to the

RVC is in process;

• The process for the recapitalisation of Alexkor is expected to start as soon as

the Deed of Settlement has been made an Order of Court

Salient Features of Settlement Agreement

• Transfer of land and buildings to appropriate community entity – with

compensation

• Township establishment and transfer of Alexander Bay town to municipality

• Alexkor retains right to occupy residential property

• Transfer of Land Mining Rights to RVC

• Establishment of PSJV and subsequent recapitalisation of mining operations

• Alexkor’s rehabilitation liability to be guaranteed by the State

• ABT to be transferred to RVC

Social ContributionEducation

• ABET training provided for employees and community members up to level 4 in English,

Mathematics and Numeracy

• School buildings for Primary and Secondary School sponsored by Alexkor

Municipal Services

• Provision of Municipal Services to Alexander Bay

• Provision of Portable water to Alexander Bay and Port Nolloth

• Provision of subsidized accommodation to residents of Alexander Bay

• Process for the establishment of Alexander Bay as municipality in progress

HIV/AIDS

Prevalence Survey conducted in April 2003 – Infection rate of 2.8% attributable to the

introduction of a Health Care Plan which includes:

• Voluntary testing and awareness programmes;

• Continuous training of Peer Educators with more emphasis on psychological development of Peer Educators

• Facilitating the introduction of Anti-Retroviral Drugs

Training & Development

• Learnerships programme on technical trades in line with JIPSA in progress

• Artisan-Assistant Development Programme in progress –

to date 2 factotums and Artisan-Assistants qualified as

artisans

• Continuous Multi-Skilling of Earth Moving Operators continuing

• Commercial Diver training in conjunction with UCT presented in Alexander Bay with intake from the community

Female Empowerment Initiatives

• Allocated 6 bursaries in mining related disciplines – 3 female

• Appointed 12 apprentices of which 2 are female – one female successfully qualified as artisan

• Trained 5 females as heavy earthmoving and Infield Screening operators

• 33% Female representation in Senior Management positions

• The Witvoorkop women empowerment project, which commenced operating in October 2006, has resulted in a payout of R 624k to date to the groups

• Female shareholding in shallow water contractors of 18%

Employee Statistics

X

Division FY 06 FY 07 CurrentChange

Since 03/06% Change Since 03/06

Mining 246 228 199 47 19%

Farming 110 89 80 30 27%

Health Services 25 22 0 - -

Municipal Services 31 21 21 10 32% *

Temporary (Contracts) 39 62 20 19 49%

Marine Contractors 1164 663 704 460 39%

Other Contractors 236 241 166 70 30%

TOTAL 1851 1326 1190 636 36% **

* Staff transferred to ABM with introduction of 3 Shifts

** Change excludes hospital employees

The loss of critical skills is a major concern

Latest Employment Demographics

X

Occupational Level No. of

Incumbents

Male Female% of

Designated GroupA C W I C W

Senior Management 5 1 0 2 1 1 0 60%

Professionally Qualified 5 1 2 2 0 0 0 60%

Skilled Employees 60 0 26 28 0 4 2 53%

Semi-skilled Employees 164 7 121 13 0 19 4 92%

Unskilled Employees 66 7 37 0 0 22 0 100%

TOTAL 300 16 186 45 1 46 6 85%

It is Evident that the Attraction and Retention of Skilled Personnel is Crucial

Preferential Procurement

Annual preferential procurement for the 2006/07 financial year amounted to 68% of total spending

Preferential Procurement2006/07

2017

13 1411

1420

16

25

1519 20

15

11

9 9

7

11

15

10

18

11

12 11

0

5

10

15

20

25

30

35

40

45

Ra

nd

(m

illio

n)

Total Spending Preferential Spending

Litigation Status Update

Matter Description Status Cost to Date

Nabera Claim Claim of R4.3m against Alexkor for outstanding management fee and chargeable costs, which is in dispute.

Claim of R119m against the State and Alexkor arising out of the alleged value-add over the duration of the management contract

Nabera agreed to give security for Alexkor’s costs, the amount still to be fixed by agreement or by the court registrar. Pleadings have closed and a trial date can be applied for.

R455 000

Ruslyn Mining Claim

A claim of R15,7m by Ruslyn for

alleged breach of its screening

contract

Alexkor counter-claiming R18m for

damages suffered from unlawful

termination of the contract.

Matter was set down for trial during 13 – 16 May 2008. Awaiting notice of set-down.

R196 703

THANK YOU