Transforming Gold Mining in South Africastonewallresources.com/wp-content/uploads/2017/04/20160725... · Transforming Gold Mining in South Africa | 2016 Immediate implementation of

ASX: SWJ

Transforming Gold Mining in South Africa Investor Presentation – July 2016

Transforming Gold Mining in South Africa | 2016

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This Presentation has been prepared by and issued by Stonewall Mining Limited (ASX.SWJ) (Stonewall or Company) is to assist in informing interested parties about the Company and should not be considered as an offer or invitation to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in the Company will be entered into on the basis of this Presentation. This Presentation is limited to persons who are sophisticated investors for the purposes of s708(8) or professional investors for the purposes of s708(11) of the Corporations Act 2001 or persons who hold Australian financial services licences and any of their representatives. By attending and/or receiving this presentation you warrant to Stonewall that you are such a person. This Presentation may contain forward looking statements. Whilst Stonewall has no reason to believe that any such statements, forward looking statements and projections are either false, misleading or incorrect, it cannot and does not warrant or guarantee that through either the passage of time or actions beyond the control of Stonewall they will not become so. You should not act and you must refrain from acting in reliance on any of this Presentation material. Nothing contained in this presentation constitutes investment, legal, tax or other advice. This overview of Stonewall does not purport to be all inclusive or to contain all information which its recipients may require in order to make an informed assessment of the Company’s prospects. Before making an investment decision, you should conduct, with the assistance of your broker or other financial or professional adviser, your own investigation in light of your particular investment needs, objectives and financial circumstances and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this presentation prior to making any investment decision. You must make yourself fully aware and all risks associated with this offering and that you do not rely upon warranties or representations by Stonewall and/or its officers. Neither the Company nor its advisers has verified the accuracy or completeness of the information, statements and opinions contained in this presentation. Accordingly, to the maximum extent permitted by law, the Company makes no representation and gives no assurance, guarantee or warranty, express or implied, as to, and take no responsibility and assume no liability for, the authenticity, validity, accuracy, suitability or completeness of, or any errors in or omissions, from any information, statement or opinion contained in this presentation. The contents of this presentation are confidential. This presentation is being provided to you on the condition that you do not reproduce or communicate it or disclose it to, or discuss it with, any other person without the prior written permission of the Company. This Presentation contains information, ideas and analysis which are proprietary to Stonewall. By agreeing to receive this information you also agree to respect the confidential nature of this entire presentation. Specifically you agree not to reproduce in any manner or distribute any part of the information contained herein without the prior written consent of the Company.

The information in this Presentation that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Daniel van Heerden, who is currently employed as a Director and as Principal Mining Engineer by Minxcon Projects (Pty) Ltd. His qualifications include a B.Eng. (Mining) from the University of Pretoria in 1985 and a M.Com.(Business Administration) from Rand Afrikaans University (now UJ) in 1993. He is a member in good standing of the Engineering Council of South Africa and is registered as a Professional Engineer with registration no. 20050318 as well as a Fellow in good standing of the South African Institute of Mining and Metallurgy with Membership No. 37309 which is a Recognised Overseas Professional Organisation’ (ROPO) included in a list promulgated by the ASX from time to time. He has worked as a Mining Engineer for more than 28 years with more than 15 years directly associated with gold mining specifically..Daniel van Heerden is employed by Minxcon and has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking 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’. Daniel van Heerden consents to the inclusion in this Presentation of the matters based on his information in the form and context in which it appears.


Disclaimer

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Corporate Overview

LONG TERM DEBTS Beatle Rock A$ 0.45m 8/16 BMIL Loan A$ 0.25m 9/16 Tasman Convertible (fixed $0.009) A$ 1.65m 6/17 APCIG A$ 4.75m 10/16 KEY MANAGEMENT & DIRECTORS George Jenkins CEO and Director of SWM – Metallurgist (Australian/South African) Trevor Fourie Director/Acting Chairman – (Australian) Stephen Gemell Director – Mining Engineer (Australian) Bill Richie Yang, Director (Australian)

COMPANY SECRETARY

Peter Hunt


ASX code: SWJ

Current share price: AUD $0.013

Market Capitalisation: AUD $23.5

million

(Source: ASX website)

Mineral Resources: 2.99Moz

Free floating shares: 1.81 billion

MAJOR SHAREHOLDERS

Tasman Funds Management Pty Ltd

High Gift Investments Ltd

Best Wealth Winner Ltd

Smart Vision Investment Group Ltd

Khan International Ltd

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Immediate implementation of the Pre-Mined Residue Project (PMR)

• In-house project study near completion

• Pre-explored, pre-developed, pre-drilled, pre-blasted material.

• To re-commence production at 40,000 tpm by Q1 of 2017,

• Low all in cash cost with exchange rate advantages.

• Low capital to start utilising existing infrustructure, plant and

processing facilities.

• Short lead time to production.

Compelling Near Term Production Opportunity in South

Africa’s “New” Gold Province

Investment Summary: Exploiting South Africa’s new “Gold Province” outside of the Witwatersrand and Greenstones

• Large fully permitted acreage in prolific gold producing region with large JORC compliant

Mineral Resource of 2.99Moz (see page 39 “Resource Table”)

• Compelling near term PMR project plus Hard Rock projects

• Long term plan for an additional brand new Biox-Plant for a 150,000 – 200,000 oz pa

Operation

• Targeting additional exploration ounces of 0.34 to 3.07 Moz (Hard Rock) plus 0.7Moz to

2.4Moz (PMR) (see tables on page 40 & 41)

• Transforming gold mining in South African

Description Value

All in Sustainable Cost per Tonne (Over Stage One)

US$57/t

All in Sustainable Cost per Tonne 2017

US$42/t

Initial CapEx (20% Contingency) US$15.1m

Stage One LOM 10 Years

4

* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.

Exploiting South Africa’s “New” Gold Province Sabie / Pilgrim’s Rest Gold Firlds

TGME – Pilgrim’s Rest / Sabie Mines: Large fully permitted South African Acreage 62000 Ha. (75km North to South and 25km East to West)


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TGME Projects – Locations in South Africa’s “New” Gold Province


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TGME Projects – Locations in South Africa’s “New” Gold Province

Northern

Central

Southern

TGME CIL Au Plant

Three Broad Areas

• Northern

– Resources, PMR targets

• Central – Pilgrim’s Rest Township (Area of Focus for Proposed PMR start up)

– Resources, PMR targets

– CIL Gold Plant,

– Full elution circuit,

– Existing tailing dams on-site

• Southern – Sabie Township

– Resources, PMR targets,

– Existing tailings

7 Transforming Gold Mining in South Africa |

2016

History – Gold Production in South Africa


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History – Gold Production in South Africa


• In 1873 the first payable gold field was discovered in South Africa’s Eastern Gold-Fields in the Sabie area,

some 300kms from the Witwatersrand (WITS) which, at the time, had no identity.

• The Sabie-Pilgrims Rest gold-field produced the first genuine gold rush in South Africa. It also produced

the first gold coins (The Burger’s sovereign).

• Around this time, the Transvaal Gold Mining and Estates (TGME) company was born which produced

gold for over 100 years.

• Gold was discovered in WITS in 1886 on farm Langlaagte which later became Johannesburg

• WITS became the largest goldfield in the world and by 1925 made up over 50% of Global gold sales

• Four distinct stages of development on WITS:

o 1880 – 1910 : Discovery to formation of Union of South Africa. Rapid growth with interruption during Boer War

o 1911 – 1951 : Slower rate of growth with interruptions or effects from local and global events (Witwatersrand

Rebellion and First and Second World Wars)

o 1952 – 1965 : Rapid growth through introduction of mines on farther reaches of WITS complex as well as improved

deep mining technologies

o 1966 – Present : Decline in production due to depletion of reserves and increased environmental management

costs of acid mine drainage water and high cost on mining

o Some analysts predict that only 33 years of minable underground reserve left in the WITS fields

The rebirth of the “New” Gold Province in the Sabie-Pilgrim’s Rest Gold Fields.

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Historical Production – the tip of the iceberg

Northern & Central

• 1872 - 1972 : ≈ 4.27 million ounces

• 2005 - 2014 : ≈ 0.23 million ounces

Southern

• 1872 – 1972 : ≈ 2.15 million ounces

• Glynns Lydenburg : ≈ 1.2 million ounces

• Elandsdrift : ≈ 78,000 ounces

Area also produced significant volumes of copper,

silver, superphosphates (fertilizers) and pyrites (for

sulphuric acid production)


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Historical Production – Zoom In

General Area Operations Description Period Ounces

Northern

12 Mines plus alluvial workings 1893 – 1930 152,400

18 mines in the Pilgrims Rest area 1889 – 1972 3,940,000

TGME Mines 2005 – 2014 233,765

Central Graskop Area 1873 – 1958 32,000

Alluvial Workings 1873 - 1958 144, 779

Total 4,502,944


2016

Historical Production


General Area Operations Description Period Ounces

Southern

15 Mines in Sabie Area plus alluvial workings

1872 – 1958 2,110,881

Spekboom Alluvial 1873 – 1958 37,179

Other South of Sabie, Rietvlei Mine 1928 - 1933 5,000

Total 2,153,060

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Historical Production: TGME Limited - Established 1896


• First 20 years above 10 g/t

• Next 45 years around 8 g/t

• PMR has been produced at mining grades of between 8 and 10 g/t mined hence the high value of the material

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History – Stonewall’s TGME (Sabie / Pilgrim’s Rest)


• The Transvaal Gold Exploration Company was established in 1883

• Company reconstituted as Transvaal Gold Mining Estates Ltd (TGME) and registered as a company on 16 May

1895

• By 1896, all the small workings consolidated and owned and managed by TGME

• Production initially from extensive alluvial diggings followed by open cast mining of oxidized primary reefs then

into underground mining of oxidized reef and then fresh un-oxidized reef

• 1955 TGME acquires Glynn’s Lydenburg Ltd. (in operation since 1898 and now called Sabie Mining (PTY) Ltd).

Sabie is a subsidiary of Stonewall along with TGME

• Between 1895 and 1970 TGME and Sabie Mines produced 5moz of gold at an average recovered grade of 10.35

g/t

• Large-scale Mining ceased in 1971.

• The primary mineralisation characterised by narrow, flat-reefs generally less than a meter thick with grades

from 1-50 g/t

• Typically ore bodies mined in the past had grades of 20-25 g/t over average reef thickness of 40-45 cm (800-

1125 cmg/t)

• The payability of historic development averaged 30% (Fowler, 1968)

• From 1968 to 2010 TGME tenements portfolio were collectively owned and operated by Rand Mines Properties

Limited, Randgold & Exploration Ltd and Simmer & Jack Mines Ltd.

• In August 2010, Stonewall Mining Pty Ltd purchased 100% of the equity in TGME and Sabie Mines

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• PMR discovered in 2013 as part of data review during exploration activities

• Discrepancy identified between milled volumes and volumes of “mined out” stopes. Waste rock dumps should have been larger than what they actually were. Question asked where this material had gone to

• Inspections underground revealed that material had been placed into the mined out stopes

• Sampling and analysis indicated that material had grade, particularly in the fine fractions and the PMR project was born

• Extensive sampling completed in Beta and Poniekranz Mines indicated sufficient grade to pursue conversion into production

• Bulk mining trials completed in early 2015 with lessons learnt for further implementation planning

• Project halted in May 2015 due to illegal strike by workers

• Company recapitalised throughout second half of 2015

• Project reviewed in Q3 of 2015 and revised strategy of risk reduction, extended production timeframes and a broader view on PMR mines available for production implemented

• Internal study is complete. Document currently being finalised

• A PMR resource delineation sampling program scheduled for Q3/Q4 2016, funding required

PMR Project - Introduction


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PMR Project – History of PMR Material


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• Gold deposits that outcropped on surface were mined into the underground sections following gold “veins”

• As the mining progressed into underground sections the stopes were low in height and followed a general 5 phase mining approach



• A stabilised mine area is clean of material, has a retaining “Stonewall” built and is now ready to mine for gold ore

Phase 1 Drill and Blast Ore : The ore is drilled and blasted into void and is ready for high grading through hand sorting

Phase 2 Hand Sorting : Hand sorting removes visible and large sized high grade material leaving a residue

Lighting equipment used for hand sorting was primitive (candle and paraffin headlamps) resulting in an ineffective hand sorting process which also did not cater for effective fines removal. The fines carry the higher values and was left in the stopes

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Phase 4 Drill and Blast Waste : The waste is drilled and blasted into the void and is now ready for packing against “Stonewalls”

Phase 5 Clean Up : The waste is packed against “Stonewalls” and support is put in place for the next cycle of mining

Phase 3 Residue Packing : The residue is packed against “Stonewalls”

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Production for Central Division in proximity of existing Plant and infrustructure:

• Successfully Trialled in 2015

• In house project study completed

• Targeting 40,000 tpm mined, 27,000 tpm milled

• Commissioning of project in Q1 of 2017 and full production by Q2 of 2017

PMR Production Strategy


Northern

Central

Southern

TGME CIL Au Plant

Mine

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

20

26

Beta

Dukes

Browns Hill

Dukes South

Poniekranz

Theta

Clewer

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* This is a strategic target only, not a forecast or

projection. Refer forward looking statement on

page 2.

PMR – Production Chain


Mining Pre-Concentration

• Two PMR mines operational at 19,500 tonnes per month per mine

• Material pre-concentrated using wet screening.

• 90% of gold concentrated into 68 % of mass.

• Targeted screen size 17mm. • + 17mm discarded. • - 17mm material to plant.

• Target 27,000 tpm of Material from Pre-Concentration step into plant, milled, thickened and processed through CIL plant.

• Once through CIL section gold is recovered in Elution circuit and then smelted into bars for sale.

Processing

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PMR Production Data Description Value

Average annual mining volume 445,000 t

Initial Life of project 10 years

Average Mined Grade

Subject to PMR Resource

Delineation Program in

Q3 2016

• Low per tonne unit cost

• Technically of low Risk

• Stage One 10 Year initial life of project developed

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• Low initial Capital requirement

• Sustaining Capital spread over life of project (10 years)

PMR Study Data Description Value

Initial Capital (2016/2017) US$ 15.1 Million

Sustaining Capex (2018 – 2026) US$ 6.1 Million

Total LOM Project Capital Requirement US$ 21.2 Million

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• The PMR project plan is focussed on maximising mechanisation. The following equipment has been selected :

o Conveyors to clear material from the mine( to replace scrapers used in trial mining)

o Scrapers in stopes to remove bulk of material and transfer onto conveyors (no hand lashing of material)

o Transvac machines to remove bulk of fines and deposit onto conveyors (no hand lashing)

o High pressure water for final clean up of fines and pumping of water and fines out of mine

• Conditions at diferent mines dictate selection of the mechanised equipment for the mining process

• The company owns LHD’s that may be used in some of the sections of some of the mines

• Hydraulic reclamation will also be trialed as a mining technique to be tested in mines with space restrictions of certain mines

– Capital cost is low however operational risk is high hence this technique not being proposed as the mining method commencement of the project; however

– Hydraulic reclamation is expected to reduce capital and operating costs and require fewer personnel. The process will be reviewed after trial mining section is completed

PMR Project – Focussed on Mechanisation


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• Labour compliment reflects compromise between capital expenditure and operating expenditure

• Investment of additional capital for larger equipment for underground and Pre-Conditioning sections presents opportunity to reduce number of personnel and therefore operating costs. Less shifts required to get same volumes

• Increased capital expenditure on larger equipment should reduce labour requirements and cost.

• Careful,management of labour is intended to mitigate issues that mining companies typically experience with the lower level employees within the workforce

• Remuneration policies have been considered in order to improve productivity e.g. production and performance bonuses

PMR Project – Labour (foundation for years to come)


Staff Functional Area Salaries Wages Total

Corporate 5 - 5

Finance and Administration 9 - 9

Safety 1 - 1

HR, Training and Health - - -

Environment 3 6 9

Security 1 - 1

Stores 1 1 2

Technical Services - - -

Mining 17 97 114

Maintenance 7 8 15

Pre-Conditioning and Plant 7 43 50

Total 51 155 206

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PMR Implementation Schedule

• Mining rights for Beta approved, awaiting official notification from DMR. Amended Mine Works Programme to be submitted to DMR for review currently Hard Rock Mining Proposed

• Mining rights for Dukes approved. Amended Mine Works Programme to be submitted to DMR for review currently Hard Rock Mining Proposed

• Environmental Permitting approved for greater TGME area including PMR project mines

• Future amendments to mining rights and permitting to be completed as part of normal operational processes

• Implementation schedule and assumes fully funded position to run activities concurrently as well as cater for redundancy

• Detailed planning and engineering prior to commencing with capital expenditure

Description M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M13

Resource Delineation

Drafting, Submission and Approval of

Amended Mines Works Programme for Beta

and Dukes

Detailed Mine Design Beta and Dukes

Detailed Engineering Design Mines and Plant

Mine Equiping

Plant Upgrade/Refurbishment

Commissioning (Gold Sales Commence M10)

Full Production

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• Market Review shows project is well positioned in South African industry

• Review considered a cross section of mines in WITS and Barberton Areas

PMR Peer Review NOTE: The data below reflects the 2015 costs of the other producers and no escalations have been applied to these mines when considering the comparison


Here we are

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Peers’ Mine Locations


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Central / Northern Divisions (Pilgrim’s Rest)

• Phase 1

– Bring PMR into production

• Phase 2

– Bring Blyde Tailings dam into production

– New Processing Plant Required, no crushing or milling

• Phase 3

– Bring 5 hard rock mines into production at 10 ktpm per mine

– New Processing Plant Required including crushing and milling

– Mines 1 and 2 will feed new plant

– Second new Processing Plant Required including crushing and milling

– Mines 3 & 4 will feed second plant

– Mine 5 will require crushing and milling and the Tailings plant will be utilised to process this ore

Our Long Term Production Strategy


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Southern Division (Sabie)

• Phase 1

– Bring PMR into production

– New processing plant required

• Phase 2

– Bring Glynns Lydenburg Tailings dam into production

– New Processing Plant Required, no crushing or milling

• Phase 3

– Bring hard rock mines into production at 10 ktpm per mine

– New Processing Plant Required including crushing, milling and BIOX

– Mines 1 and 2 will feed new plant

– Second new Processing Plant Required including crushing and milling and extension to BIOX

– Mines 3 & 4 will feed second plant

– Bring additional tailings into production

Our Long Term Production Strategy


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Northern / Central - Pilgrim’s Rest


Production Target Ounces: From PMR to Primary Ore

Southern - Sabie


Ore source 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

PMR Subject to Proposed Resource Delineation

Tailings - 3,500 4,800 4,000 3,900 2400 - - - -

Primary - - 13,400 28,800 44,200 66,600 77,200 77,200 77,200 77,200

Subtotal (Excluding PMR) - 3,500 18,200 32,800 48,100 69,000 77,200 77,200 77,200 77,200

Ore source 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

PMR Subject to Proposed Resource Delineation

Tailings - - 4,300 4,300 4,300 4,300 4,300 200 - -

Primary - - - 13,400 28,800 44,200 59,700 61,700 61,700 61,700

Subtotal (Excluding PMR) - - 4,300 17,700 33,100 48,500 64,000 61,900 61,700 61,700

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TOTAL – Pilgrims and Sabie


Production Target Ounces: From PMR to Primary Ore


Ore source 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

PMR Subject to Proposed Resource Delineation Tailings - 3,500 9,100 8,300 8,200 6,700 4,300 200 - -

Primary - - 13,400 42,200 73,000 110,800 136,900 138,900 138,900 138,900

Total - 3,500 22,500 50,500 81,200 117,500 141,200 139,100 138,900 138,900

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TGME Gold Fields

• 7 Mining Rights

• 6 Prospecting Rights

• 62,000 Ha in the Eastern Goldfields of South Africa

• 2.99 Moz Au resource (see table on page 39)

• Hard Rock Exploration Target of 0.33 – 3.07 Moz (see table on page 40)

• Estimated PMR material between 0.72 - 2.44 Moz Au (see table on page 41)

• Gold fields divided in Northern (Vaalhoek), Central (Pilgrim’s Rest) and Southern Sections (Sabie)

• Existing plant in Central section

• Proposed future MEGA plant at Sabie


2016

Sabie/Pilgrim’s Rest – Regional Geological Setting


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Geology • Situated in the Sabie-Pilgrim’s Rest Goldfield where

gold occurs in sedimentary host rocks of the

Transvaal Supergroup.

• TGME mineralization hosted in northeast-striking

disconcordant carbonate reefs in Malmani

Dolomites in flat, bedding parallel shears located

mainly on shale partings.

• Gold mineralization at Rietfontein is hosted in

granites within a shear zone.

• Different operations exploit different reefs in the

area, e.g. Frankfort – Bevett’s and Theta Reefs, Beta

– Beta Reef, Duke’s Hill – Rho Reef. Hermansburg,

DG2 and DG1 target surface gold mineralisation.

• Vaalhoek Rock Dump comprises untreated material

from the historical Vaalhoek Mine. Glynn’s

Lydenburg and Elandsdrift tailings dumps comprise

historically mined out and processed tailings from

various regional gold mines.


2016


Geology – Significant Gold Mineralisation and Reefs’

35

Geology continued


• Similar sections may be expected in Vaalhoek and Glynn’s Lydenburg Area – horizontal reefs

• Rietfontein represents shear zone gold mineralization in granites rather than the typical carbonate veins – vertical reefs

36

Arbitration Update: Shandong Qixing Iron Tower Co.

The Arbitration against Shandong Qixing Iron Tower Co., Ltd is complete, awaiting an award, likely by

end August 2016

Where: Hong Kong International Arbitration Centre

The Claim: US$118.5 million

Costs: Litigation funding Consortium (funded)

• Funders share is 45 percent of a successful claim

• Stonewall retains 55 percent of a successful claim

Key Process and Timeline：

• Stonewall’s Statement of Claim submitted (May 2015)

• Qixing’s Statement of Defense submitted (July 2015)

• Stonewall’s Claimants response submitted (November 2015)

• Qixing’s Response submitted (December 2015)

• Tribunal hearing completed (11 to 14 March 2016)

• Final decision (by 1 September 2016 – as indicated by Tribunal)

• Enforcement through the courts in China (if necessary)


37

Corporate Chart


Stonewall Resources Pty Ltd (ASX: SWJ)

(the “Company”)

Stonewall Mining (Pty) Ltd

(“Stonewall”)

Transvaal Gold Mining Estate (Pty) Ltd

(“TGME”)

Sabie Mines (Pty) Ltd (“Sabie”)

Bosveld Mines (Pty) Ltd (“Bosveld”)

100%

74% 74% 74%

Australian

Parent

South African

Subsidiary

companies

38

(The other 26% interest in the subsidaries are owned by the local BEE groups)

Resources Table – June 2014


Mineral Resource

Category

Type of

Operation

Tonnage Gold Grade Gold Content

Mt g/t Kg 000 oz

Measured

UG 0.170

4.77

811

26.1

Surface 0.151

1.59

240

7.7

Tailings 2.294

0.77

1,770

56.9

Total Measured 2.615

1.08

2,821

90.7

Indicated

UG 2.903

5.82

16,902

543.3

Surface 3.173

0.88

2,811

90.4

Tailings 0.012

0.58

7

0.2

Total Indicated 6.088

3.20

19,720

633.9

Total Measured & Indicated 8.703

2.59

22,541

724.6

Inferred

UG 16.151

3.90

63,028

2,026.5

Surface 0.801

0.80

642

20.7

Tailings 2.124

3.06

6,503

209.0

Rock Dump 0.121

1.59

192

6.2

Plant Floats 0.041

0.54

22

0.7

Beta Main 0.109

0.81

88

2.8

Total Inferred 19.346

3.64

70,475

2,266.0

39

Further Immediate Exploration Target


• Completed first phase of surface exploration at Beta

• 6,601m drilled in 2013/2014, lab testworks halted due to 2014/2015 corporate restructure.

Continued Lab testwork for drill cores planned for Q2 of 2017

• Drilling at Vaalhoek intersected extensive sulphide mineralisation

• Some existing mines characterised by multiple reefs

• Exploration strategy expected to increase resources by an estimated 0.34 Moz to 3.07 Moz

o Glynn’s and Rietfontein reef extensions

o Vaalhoek reef and strike extensions

40

Project SW

Minimum

Tonnage

Maximum

Tonnage

Minimum

Grade

Maximum

Grade

Minimum

Ounces

Maximum

Ounces

Cm Mt Mt g/t g/t Moz Moz

TGME Mines:

Vaalhoek 100 3.5 1.0 4.00 3.50 0.12 1.41

Beta 100 3.5 3.5 0.95 3.50 0.11 0.40

Sabie Mines

Rietfontein 100 0.5 3.0 2.02 6.51 0.03 0.63

Glynn's 100 2.5 6.5 1.00 3.00 0.08 0.64

Total 100 10.1 24.1 1.03 3.97 0.33 3.07

The information in this Presentation that relates to Exploration Results, Exploration Targets, Mineral Resources or Ore Reserves is based on information compiled by Daniel van Heerden, who is currently employed as a Director and as Principal Mining Engineer by Minxcon Projects (Pty) Ltd. His qualifications include a B.Eng. (Mining) from the University of Pretoria in 1985 and a M.Com.(Business Administration) from Rand Afrikaans University (now UJ) in 1993. He is a member in good standing of the Engineering Council of South Africa and is registered as a Professional Engineer with registration no. 20050318 as well as a Fellow in good standing of the South African Institute of Mining and Metallurgy with Membership No. 37309 which is a Recognised Overseas Professional Organisation’ (ROPO) included in a list promulgated by the ASX from time to time. He has worked as a Mining Engineer for more than 30 years with more than 20 years directly associated with gold mining specifically. Daniel van Heerden is employed by Minxcon and has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Daniel van Heerden consents to the inclusion in this Presentation of the matters based on his information in the form and context in which it appears

Conceptual ounces in the exploration target

Refer forward looking

statement on page 2.

The Exploration Target is

conceptual of nature, with low

confidence and does not

imply a resource



41

Competent Person:

Vaalhoek - the two exploration targets that have been determined from the historical resource block

data. The widths of these target areas are based on the historical blocks with a value greater than 300

cmg/t. The average widths are 750 m and 1 120 m for the two target areas. The extent of the

extension uses a maximum of 1 500 m and a minimum of 500 m which is roughly the width of the

historical mining. This results in a potential tonnage of between 3.55 Mt and 10.96 Mt for the two

target areas. The minimum grade has been based on the lowest category for the historical resource

blocks (0 - 100 cmg/t) and the maximum grade is based on the highest category for the historical

resource blocks (+400 cmg/t).

Beta - The conceptual exploration target is based on the lateral extension of the Beta reef to the

south. The area is estimated to be 983 000 m2 (between the yellow and purple lines). The grade is

expected to range between 95 cmg/t and 350 cmg/t (average of two drill holes in the area; from the

current estimation model in that area).






imply a resource



42

Competent Person:

Rietfontein - These target areas and ounces are

based mainly on historical resource block information

and the areas that have been targeted are those with

historical resource data indicating values greater

than 300 cmg/t or 3.00 g/t over a stoping width of

100 cm. This "cut off" was used as it is a possible

economic cut off for this type of mining at shallow

depths. The ranges or lateral or down dip extent of

these conceptual target areas are not based on semi-

variogram ranges of the mineralised zones but rather

optimistic forecasts of potential pay areas above 300

cmg/t or 3.00 g/t over a stoping width of 100 cm.

Glynn's - The conceptual exploration targets (best

potential at Glynn's), at Compound Hill and

Malieveld, are based on the historical resource block

data that was available. The lateral extent of these

target areas are based on the historical blocks with a

value greater than 300 cmg/t. The lengths for the

three are 2 160 m, 630 m and 525 m respectively. The

down dip extension is based on a minimum of 200 m

which is approximately the extent of the historical

mining and an average maximum of 500 m which is

the optimistic view. The minimum value has been

based on the lowest category for the historical

resource blocks (0 - 100 cmg/t) and the maximum

value is based on the highest category for the

historical resource blocks (+300 cmg/t).






imply a resource


• Although not yet included in the Company’s resource statement, significant sampling, mapping and accesses to multiple mines (more than 1,500 samples) and testing for both grade and fractional analysis has shown the prevalence of the material across the mines

• The estimation of the conceptual exploration target is based on an in situ grade range of between 1.28 g/t and 2.13 g/t albeit that this may vary from one area to the next

Conceptual PMR Target

Area

Historical

Mined

Area @ 93

%

Minimum

Tonnage

Maximum

Tonnage

Minimum

assumed

Grade

Maximum

assumed

Grade

Minimum

Estimated

Gold

Maximum

Estimated

Gold

Minimum

Estimated

Gold

Maximum

Estimated

Gold

000 000 m² Mt Mt g/t g/t Kg Kg Moz Moz

Northern

Division 1.87 2.55 5.17 1.28 2.13 3,250 10,992 0.104 0.353

Central

Division 4.52 6.15 12.49 1.28 2.13 7,846 26,537 0.252 0.853

Southern

Division 6.54 8.89 18.05 1.28 2.13 11,341 38,359 0.365 1.233

Total 12.94 17.60 35.71 1.28 2.13 22,436 75,888 0.721 2.440

43

Refer forward looking statement on page 2.

The numbers is conceptual of nature, with low confidence and does not imply a resource


Conceptual PMR Target

44

Refer forward looking statement on page 2.

The numbers is conceptual of nature, with low confidence and does not imply a resource

Competent Person: PMR Exploration Target Methodology

TGME has undertaken a study on the residual broken rock that historically had been packed in the old mining stopes. The historical mines that were

accessible have been investigated to get an understanding of the potential of the "residue mining" in the historical operations. The investigations

undertaken by the mine personnel at Beta and Theta mine revealed old mining areas packed with broken rock which has been sampled in places.

Grade

• Some 1,500 samples have been taken in such areas. The samples were analysed for gold grade. This sampling was done randomly without

consideration given to obtain a representative sample.

• The grade range of between 1.28 g/t to 2.13 g/t is based upon a 25% variance from the mean of all sampled values combined to achieve a mean

of 1.7 g/t.

Volume

• The area was determined for the individual mines from the historical mining plans and reduced by 7% to account for the open development areas

already existant in the current mining void. All historical mining areas have been assumed to contain material based on the areas investigated

although it was not possible to investigate all the areas due to access restrictions.

• The height of the broken rock has been estimated to range from 80 cm to 120 cm and is based based on stoping widths of 90 cm to 140 cm which

were factorised by a packing of 80% for the stoping width and swelling factor of an additional 5%.

• The density applied to for the residue has been ranged from 1.7 to 2.3 t/m³, and is based upon a variance of 15% from the mean of 2.0 t/m³. It

has been assumed that the broken density of the PMR represents approximately 65% of the possible unmined rock density of the reef (2.7 t/m³).

Content

• Mathematical calculations: – Kg = Tons x Grade /1000

• Kg to ounces conversion factor – 32.15075 ounces/kg


Extraordinary Value Proposition

Market Capitalisation – Where are we heading?

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000

History & Future Value of Stonewall

Debt

MarketCapitalisation

• 2011 Acquiring phase: Market Valuation - AUD90m; Long term debt - AUD Nil

• 2012 Listing phase: Market Cap – AUD108m; Long term debt – AUD4m

• 2013/4 Transaction phase: Market Cap – AUD120m; Long term debt – AUD7m

• 2015 Consolidation phase: Market Cap – AUD10 - 15m; Long term debt – AUD12m

• 2016 -> Transitioning phase: Market Cap – AUD20m - ??m; Long term debt – AUD6m

45

?


Thank You

Trevor Fourie Australian Director Mobile: +61 414 324 960 [email protected]

Bill Richie Yang Australian Director Mobile: +61 404 831 804 [email protected]

46

www.stonewallresources.com.au

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