SEPFLUOR NFM PROJECT DEVELOPMENT AND OBJECTIVES

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Johan BritsProject Director NokengProject Construction and Progress

Kevin DabinettGeneral Manager NokengOperational Readiness

Rob WagnerCEO

October 2018

SEPFLUOR NFM PROJECT DEVELOPMENT AND

OBJECTIVES

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DISCLAIMER

16 October 2018SEPFLUOR NFM PROJECT DEVELOPMENT AND

OBJECTIVES2

The information contained in this presentation or subsequently provided to the recipient of this presentation whether orally or in writing by or on behalf

of SepFluor or its subsidiaries, directors, officers, employees, agents, advisors or consultants ('information') is provided to the recipients on the terms

and conditions set out in this disclaimer.

The presentation contains reference to certain intentions, expectations and plans of SepFluor. Those intentions, expectations and plans may or may

not be achieved. They are based on certain assumptions which may not be met or on which views may differ. The performance and operations of

SepFluor may be influenced by a number of factors, many of which are outside the control of SepFluor. No representation or warranty, express or

implied, is made by SepFluor, its subsidiaries, directors, officers, employees, agents, advisers or consultants that any intentions, expectations or plans

will be achieved either totally or partially or that any particular rate of return will be achieved.

This presentation does not purport to contain all the information that any existing or prospective investor may require. It is not intended to be a

complete or accurate statement of material information. In all cases, before acting in reliance on any information, recipients should conduct their own

investigation and analysis in relation to the business opportunity and should check the accuracy, reliability and completeness of the Information and

obtain independent and specific advice from appropriate professional advisers.

Recipients should not treat the contents of this presentation as advice relating to legal, taxation or investment matters and should consult their own

advisers. SepFluor, its subsidiaries, directors, officers, employees, agents, advisers and consultants take no responsibility for the contents of the

presentation, and makes no representation or warranty (express or implied) as to the accuracy, reliability or completeness of the information.

SepFluor, its subsidiaries, directors, officers, employees, agents, advisers or consultants shall have no liability (including liability to any person by

reason of negligence or negligent mis-statement) for any statements, opinions, information or matters (express or implied) arising out of, contained in

or derived from, or for any omissions from the presentation, except liability under statute that cannot be excluded.

If you reside in a jurisdiction which disallows you from participating in any capital-raising process or investment in SepFluor, you may not read or rely

on this information or participate in any such activity or process.

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FACTS AND LOCATION

16 October 20183

Sepfluor is a privately held company whose primary mineral asset is the Nokeng Fluorspar Mine in Gauteng, South Africa (100% owned)

• Located ±80km north of Pretoria, adjacent to the Vergenoeg mine

• Previously explored by Gold Fields in the 1970s and BHP Billiton in early 2000’s

• Two high quality adjacent haematite-fluorspar deposits being Plattekop and Outwash Fan with a 12.18Mt high quality SAMREC-compliant reserve

• All regulatory and mining licence approvals in place

• Mining right area: 1 309ha

• Mine financing concluded (June 2017) and construction commenced July 2017

• Planned production of 180 000tpa acidspar and 30 000tpa metspar to commence in February 2019

NFM PROJECT DEVELOPMENT

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PROCESS DEVELOPMENT

16 October 20184

Geology

• Lebowa Granite Suite of the Bushveld Complex - Volcanogenic type forming intrusive pipe and

extrusive strati form deposits. The eroded volcano resulted in fluorspar hematite deposits:

• Plattekop: A channel lag feeder to the Vergenoeg vent, is a bedded to finely laminated 20 m thick

layer of fluorspar-hematite occuring south of the Vergenoeg Pipe

• Outwash Fan: A strati-form fluorspar deposit occurring 3 km to the south of Plattekop, formed as a

result of sedimentary deposition after erosion of the pyroclastic rock suite.

Mineralogy

• XRD analysis - presence of fluorspar; hematite and REE’s phases

• SEM analysis - fluorspar coarse grained and the fine fraction intergrown with hematite

• MLA analysis - identified a group of arsenic bearing minerals as fully liberated and associated with

iron sulphides

• PIXE analysis – arsenic association with iron sulphide confirmed & coined at Nokeng as arsenised-

pyrite

Challenges

• Plant feed consistency due to sourcing from two distinct orebodies

• Separation of fine intergrown fluorspar from hematite

• Maximising recovery at product specification of >97,2% CaF2

• Minimising entrained iron in product to <1%FeO


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PROCESS DEVELOPMENT

16 October 20185

Controls

• Design with blending stockpile, breakage along grain boundaries, flotation at

elevated temperature, multi stage regrinding and wet magnetic separation

• Modern and proven equipment selection

• Back-up capability of Metspar circuit

• Product storage and blending capacity

• Quick analytical turnaround from on-site analytical laboratory

PROJECT DEVELOPMENT AND CONSTRUCTION

Open pit mining

Crushing &

screening

Multi-stage

grinding

Flotation –fluorspar

concentration

Tailings

storage

facility

Fluorspar concentrate for shipping

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PHASED PROJECT EXECUTION

16 October 20186

Mine planning and pit

establishment

Utility supply

Power

Water

Process plant design and

erection

Permit and Environmental

compliance

Tailings storage facility

Training and operational readiness

Shallow resources

Feasibilities

Permitting and environmental considerations

Test work and process

definition

Exploration

Project Funding

Nokeng Mine Project

20 months

R1250m Direct Costs

180ktpa Acidspar

30ktpa Metspar

Community/

Stakeholder engagement

Product to

market

February 2019

Pre Construction

Construction

outputs

Legend:


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CONSTRUCTION PROGRESS

16 October 20187

Statistics

* Updated 8 Oct 2018

Challenges experienced

• Finalising the complex funding agreements

• Remote location concrete supplies

• Variable Geo-Tech considerations

• Concurrent multiple structural steel fabricators

• Delays with construction of electricity supply

• Local community expectations and demands

Design Status* Units

Concrete 10,291 9,332 m3

Steel 1,343 1,018 t

Piping 17,315 6,505 m

Cabling 87,545 18,035 m

Racking 4,380 2,651 m

Total construction personnel: 820

Man-hours worked to date: 1.5mill

LTI’s to date: 1


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MILESTONES AND BUDGET

16 October 20188

Programme – 20 months (608 days)

• On track to achieve completion and handover by 7 Feb 2019

• Expenditure to date: ≈65.6% of direct costs expended to date

• Expenditure within budgeted capital costs


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MINE SITE JULY 2017

9 16 October 2018NFM PROJECT DEVELOPMENT

For reference Initial

site clearance

commencing in July

2017

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MINE SITE LOOKING WEST TO EAST

16 October 201810 NFM PROJECT DEVELOPMENT

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CONCENTRATOR

16 October 201811 NFM PROJECT DEVELOPMENT

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OPERATIONAL READINESS

16 October 2018OPERATIONAL READINESS 12

So what is it?

• A good definition of operational readiness (OR) is “the capability to efficiently

deploy, operate, and maintain the systems and procedures” required to effectively

operate a new asset.

• Operation Readiness includes the management practices for performing pre-start-

up reviews, identifies organisational tasks, roles and responsibilities including but

not limited to the following:

• Recruitment of a new workforce

• Training

• Setting up stores systems and stocks

• Maintenance systems

• Key systems

• Basic procedures and safe operating practices

• Alignment of all processes including outsourced contracting

• On and off site logistics

• Social responsibilities to surrounding Communities

?

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OPERATIONAL READINESS


Why is it necessary?

• Operational Readiness (OR) is often neglected because OR activities are usually

not part of the project lifecycle. The job of the project manager and of the project

team is essentially completed when the project is “Handed Over”. At this point

operational management takes over.

• This takeover represents the biggest risk to the successful conclusion/transition of

the project into continuous operations. Lenders, shareholders and sponsors regard

this transition as the most risky period for a project as it is the key transition from

the theory of a project to reality and has the potential to destroy significant value.

“it is often the 'people' side of delivering the operation that

presents the greatest challenge”

“up to 30% of the potential value of a major project can be

destroyed as a result of operational readiness failure”Deloitte case studies

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CRITICAL ISSUES


There are numerous examples of these OR failures including some in the Fluorspar space which have created significant “value destruction” and huge “credibility gaps”

To this end Nokeng has devoted significant focus on OR and achieving a competent startup in a fluid project environment. We have:

• Set up a dedicated OR process run in parallel with the Project Construction Management

• Outsourced several process packages to expert providers to simplify management focus

• Identified key positions and skills and recruited early

• Engaged communities from an early stage and in a holistic manner to create buy in and involvement

• Initiated key training initiatives well in advance of production start

• Identified and commenced implementation of key systems well in advance of handover

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OUTSOURCING


The following has been outsourced or falls outside the direct management activities of

the mine operational team simplifying and focusing management inputs

• Marketing and Sales (Sepfluor)

• Mining to Andru Mining

• Initiated 6mths ahead of startup

• Open both orebodies

• Complete infrastructure development

• Steam generation and Boiler operation to Dryden

• Coal supply

• Permitting

• Specialized technical maintenance and operation

• Metspar briquetting and plant design and build to Picko

• Binder optimization

• Plant design and construction

• Expert operator

• Logistics of final product shipping from mine to port to Traxys

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RECRUITMENT AND TRAINING


A sequence of recruitment was commenced in late 2016 to:

• Identify key positions and skills

• Phase recruitment around key technical and management skills

• Integrate new recruits in the project construction phase

• Cascade recruitment from management down over 18mths

• Develop key sourcing networks in the mining /process field as well as into the neighboring communities

• For short term construction based employment

• Long term permanent employment

• Enforce similar amongst our outsourced providers

• Develop training mechanisms to ensure wide effective skills base

• Built and outsourced a Community based engineering skills training Centre (year ahead of operations)

• Recruited key technical/management skills to mentor new employees

• Retain core industry expertise as mentor/coach’s 6 months post handover (Minopex)

• Pre-screen new employees through community/construction engagement over project timeframe.

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SYSTEMS


Systems design and implementation is very time consuming and it was important to

decide and commence early with this.

• Early decision to implement integrate ISO management systems for Quality,

Environment and Safety. Implementation commenced late 2017 and first audit will be

targeted for late 2019. Well progressed and forms core of management systems.

• Development of Codes of Practice, operating procedures well advanced

• Issue with OEM information late

• Legal/Safety compliance a significant driver

• ERP system selected in 2017 and live from Mid September 2018

• Development of IT backbone to support the above completed and site office “Live”

• Key stores inventories identified and all long lead orders placed

• Key supply of utilities concluded

• New Eskom power supply complete and to be commissioned November

• Water supply wellfield built, tested and operational

• Potable water supply operational

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OTHER OPERATIONAL READINESS ISSUES


Environmental

• Offshore shareholders and lenders with global expectations

• Early establishment of systems for statutory compliance. Already being managed

and monitored

• Establishment of baselines and history vital

• Access to expert independent contractors

Community

• Critical to build relationships built on deliveries and trust over time. Years in the

making

• Nokeng complex with multiple communities and municipalities and widely

dispersed

• People poor with massive real and politically driven expectations

• Both formal and informal communication networks critical (developed over the last

5 years)

• Need to maintain and grow these relationships through the startup into operations

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TECHNICAL AND COMMISSIONING


The plant is technically complex and given a green workforce even with significant

experience it will take time for them to understand the intricacies. To accomplish this:

• Mine operations staff relocated to site with effect from 3 September 2018

• All key operational staff will be in employ by October 2018

• The balance of the new employees recruitment being some maintenance staff

will be complete by January 2019

• Plant commissioning will commence in the concentrator front end from late

September and run though to Performance Completion tests in late January/early

February 2019 and during this period

• Mine staff will assist with operation of all equipment

• Be part of the commissioning process

• Punch list defects with the EPC Contractor

• Perform any maintenance required during this phase

• Undergo any OEM specific training required on key equipment

• Learn the process flows and key measurables

They will be competent and effective by handover

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CONCLUSION


The secret is

Start Early And then

Plan Review, Re-plan, Review, …………

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STRATEGIC GOALS AND PROGRESS

21 16 October 2018SEPFLUOR OBJECTIVES

Vertical Integration of the Nokeng and Wallmannsthal Mines with a Fluorochemicals plant is value accretive and provides significant returns

Welgelegen / Welgevonden

Kruidfontein

Fluorochemical

beneficiation plant

Nokeng

North West

Wallmannsthal

Limpopo

Mpumalanga

Gauteng

Free StateKwaZulu-Natal

Fluorspar deposit / mine

Beneficiation plant▪ High quality reserve – 12.2Mt; 19-year

life of mine (“LOM”) at 630,000 run-of-

mine (“ROM”) tonnes per annum (“tpa”)

▪ High grade – 27% CaF overall; 42% for2

Plattekop

▪ Quality deposit – low phosphorus, low

arsenic

▪ Cheap to mine – Open pit; Virtually no

overburden; low cost of production

▪ Concentrator – 180,000 tpa acidspar

and 30,000 tpa metspar fluorspar

1. Nokeng

▪ High quality chemical products

generated at low cost

▪ Anhydrous hydrogen fluoride (AHF) –

60,000 tpa (19 000 tpa surplus)

▪ Anhydrite (CaSO4) – 216,000 tpa

▪ Aluminium fluoride (AIF3) – low silica;

60,000 tpa

▪ 12,000 tpa metspar

▪ State of the art technology – Licence

agreement concluded with CHENCO

GmbH

2. SepChem

▪ High tonnage estimated resource –

One deposit of 30Mt at 15-20% CaF2

and a second deposit of 2.8Mt at 28%

CaF2 (early exploration)

▪ Cheap to mine – Open pit; low cost of

production

▪ Prospect permit granted in 2018 with

100% ownership. Exploration program

planning In progress

4. Kruidfontein

▪ Early exploration

▪ Grade – 22% CaF2

5. Welgelegen / Welgevonden

Phase I development

Phase II development

▪ Quality resource – 7.9Mt (deposit open

at depth); 16 year LOM

▪ High grade – 46% CaF

▪

▪

2

Quality deposit – low arsenic, low silica

Cheap to mine – Open pit; low cost of

production

▪ Pre-feasibility Study – Completed July

2013 (2018 update in progress)

▪ Mining Licence granted 2018

▪ 100,000 tpa acidspar and 15,000 tpa

metspar

3. Wallmannsthal

Future exploration

SepFluor’s key strategic Pillars:

• Complete construction, commission and

operate the Nokeng Mine (early 2019)

• In progress and athough tight on time

and budget currently

• Complete the DFS for the Wallmannsthal

Mine and commence construction.

(4Q2020)

• Key land purchases being executed

• Further reserve definition planned

• Mining Right and Water Use license

obtained

• Develop a significant fluorspar resource

base (ongoing)

• Key geotechnical and early

exploration work completed on Wilton

Deposit on Nokeng site. Drilling

program pending regulatory

environmental approval

• Prospect permit granted for

Kruidfontein target. 5 year exploration

program planned

• New 2018 BFS and Market Study completed for downstream

Aluminium Tri-Fluoride plant with positive outcomes. Key

financing initiatives formally commenced with a view to

concluding these in order to be ready to commence construction

by late 2H2019

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CONTACTS

16 October 201822

Nokeng Fluorspar Mine (RF)(Pty) Ltd

Tel: +27 (12) 622-9400 (Switchboard)

R&A Strategic Communications

Tel: +27 11 880 3924

Rob Wagner

Chief Executive Officer

Email: [email protected]

Olwen Auret


Chris Mulder

Legal Manager


Jolandi Nel

Public Relations Officer


Johan Brits

Project Director


Kevin Dabinett

General Manager Nokeng


SEPFLUOR NFM PROJECT DEVELOPMENT AND

OBJECTIVES

SEPFLUOR NFM PROJECT DEVELOPMENT AND OBJECTIVES

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