fd bushveld minerals initiation 21st march 2013

7/27/2019 Fd Bushveld Minerals Initiation 21st March 2013

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Target Price: 0.Target Price: 0.Target Price: 0.Target Price: 0.28282828

Bushveld Minerals (BMN LN) BUY

Mining - Initiating Coverage 21 March 2013

This is a marketing communication. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of thedissemination of investment research. Non-US research analysts who have prepared this report are not registered/qualified as research analysts with FINRA, may not be associated persons of the member organisation and may not besubject to NASD/NYSE restrictions on communications with a subject Company, public appearances and trading securities held by a research analyst account. Disclosures can be found at the end of the report.

Fox-Davies Capital

Stock Data

Share Price: 0.13

12 M. TargetPrice:

0.28

Market Cap (M): 35.9

EV (M): 37.9

Iron and Tin in South Africa

Investment caseInvestment caseInvestment caseInvestment case

We are initiating our coverage of Bushveld Minerals (Bushveld or The Company) with

a BUYBUYBUYBUY recommendation and a 28p target price. Bushveld Minerals has licences over the

Mokopane VTM and Mokopane tin projects in the Limpopo province of South Africa.

The experienced team has accumulated some exciting prospects with huge potential. The

Mokopane iron deposit constitutes a JORC compliant resource of 818Mt in the titanium-

rich P-Q layer and the vanadium-rich Main Magnetite Layer (MML). The P-Q layer hosts

the bulk of the current resource with 752Mt at 32% Fe, 10.5% TiO2 and 0.19% V2O5including a high grade zone with 184Mt at 39% Fe, 14% TiO2and 0.25% V2O5. Of the 752Mt

P-Q layer resource 378Mt occurs within 200m from surface. The MML comprises of 66Mt at

37.1% Fe, 9.2% TiO2and 1.24% V2O5. The deposit is also located within a prolific mining

district which boasts extensive infrastructure, a rare thing for a junior iron ore explorer.

There is plenty of upside in the iron story, with only 5.5km of a potential 18km strike length

having been drilled and defined as a resource. The recent addition of two new farms to the

license has increased the strike length of known mineralisation by 64%. The titanium

content, inherent in the iron ore, is also a possible metal credit although further

metallurgical test work is required to confirm the scale of this. The Company also owns the

Mokopane tin project located South West SW of the iron asset and comprising five

targets with known mineralisation in close proximity to each other. The Groenfontein

target has a JORC compliant resource of 3.99 Mt at 0.15% Sn (5,990t of contained tin). In

addition, the targets include Zaaiplaats, which was once South Africas second largest tin

producer with a large remaining lower grade ore which should be relatively straightforwardto bring back into production using bulk mining methods. Exploration upside can be

found along strike from the current resource and also in possible high grade pipe features

that were missed by historical mining activities, especially in the deeper parts of the

deposit.

We believe that the value of this Company will increase rapidly as it de-risks its projects. A

further resource upgrade and a scoping study are expected later this quarter for the iron

project which should enable us to put some realistic production figures around the current

plans, before the Company starts a feasibility study in 2Q13. Meanwhile the Company

expects to prove up over 20kt of Sn and advance at least one tin deposit towardsproduction in the relatively short term.

Price Chart

52 Week Range

11.5p 12.6p 23p

Company DescriptionBushveld Minerals is a junioriron ore and tin explorer with a64% interest in the Mokopane

VTM project and theMokopane tin projects nearJohannesburg, South Africa.

The Companys near futurefocus is to continue to explorethe iron asset with a viewtowards advancing it toproduction.

MAIN

SHAREHOLDERS HOLDING

Obtala Resources Ltd 46.0%

Oak Nominees (MWI) 29.6%

Oak Nominees (VML Res.) 11.5%

Blackrock Invest. Man. 7.0%

Source: Bushveld Minerals March12

Research:

Mark Heyhoe

[email protected]

www.fox-davies.com

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Bushveld Minerals Initiating Coverage 21 March 2013

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Table of ContentsExecutive Summary 3Background 5Mokopane VTM Project 6

Background 6Geology 6Exploration 12Resources 13Exploration Upside 14Metallurgical Test Work 15Mining and Processing Options 18Marketing and Product Sales 20Infrastructure 20Future work programme 23

Tin Greenhills Resources 24Background 24Geology 25Groenfontein Target 25Zaaiplaats Target 26Mining and Exploration History 26Current Exploration 27Resources 29Exploration Potential 30Mining and Processing 31

Valuation 32Risks 34Appendix A - Corporate Structure & Shareholders 36Appendix B Directors 37Appendix C Overview of South Africa 38Appendix D - Commodity Outlook 40Research Disclosures 54Fox-Davies Capital Coverage 55


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Executive Summary

What Does Bushveld Minerals Have?

Bushveld Mineralss primary asset is the Mokopane VTM Project located approximately 260km north of the mining centre

of Johannesburg. After drilling 5.5km of a potential 18km strike length the Company has recently released a revised

JORC resource statement of 818Mt and believes there is potential for well over 1Bt. The majority of the resource (752Mt)is from the titanium-rich 45m thick P-Q layer at an average grade of 32% Fe, 10.5%TiO2, 0.19% V2O5, including 184Mt at

39% Fe within a 12m thick sub-layer of the P-Q layer. Over 54% of the total resource is within 200m of surface and

amenable to open cut mining. In addition, a resource of 66Mt at 37.1% Fe, 9.2% TiO2 and 1.24% V2O5 has been

established on the 8m thick, vanadium-rich Main Magnetite Layer. The Company also has exploration licences over the

Mokopane tin deposit located to the SW of the Mokopane iron project. A 2011 drilling campaign verified the historical

drilling and led to a JORC compliant resource of 4 Mt at 0.15% Sn (5,990 tons of Sn metal) being defined in one of five

target areas.

Blockbuster Management Team

Perhaps the most promising feature of this story is the quality of the technical team. The Viljoen brothers are very well

known and respected in the South African mining industry. The management team, which includes Professors Richard

and Morris Viljoen, have a proven track record of successful target generation and development of projects including the

discovery of the Akanani Platinum project which was sold to Lonmin for US$444M after spending under US$10M. The

Viljoen brothers each have over 30 years in the mining industry developing many significant projects, either directly or as

consultants, including the Central Witwatersrand Project, the Witwatersrand South Reef Project, Doornkop mine project,

the Amalia and Blaaubank lode gold deposits and the Trekkopie uranium project.

What are VTMs?

Vanadiferous titano-magnetites or VTMs are a type of magnetite that contains vanadium and titanium oxides in addition

to iron. Bushveld Minerals hope to produce a concentrate which can be used in the production of iron metal with a

vanadium and titanium bearing slag by-product. Metallurgical pre-reduction testwork has yield recoveries of up to 86.5%

for a 54.8% FeTproduct from the massive magnetite and 61.5% recovery for a 55.1% Fe

Tproduct on disseminated ore are

achievable for the P-Q zone.

Is Infrastructure a Problem?

Iron ore plays are as much about the access to infrastructure as they are about the deposit. Bushveld Minerals projects

are located within the Bushveld Complex, the heart of South Africas mining industry, and therefore benefits from the

mining infrastructure at its doorstep. The area is serviced by existing rail infrastructure, linking the coal mines of the

region to several ports on the east coast although bottlenecks in the rail infrastructure means that access can be limited.

The closest railway link to the VTM project is at Mokopane, only 45km away. The project is located in close proximity to

the Waterberg coal fields, Soutpansberg coal fields and the Springbok Flats coal fields, from which it can source both

thermal and coking coal for the metallurgical treatment of the ore and power generation (if necessary). A dual 400kV dualtransmission line from the relatively nearby Matimba power station, a proposed 132kV transmission line from the Medupi

power station currently under construction and a proposed substation all within 25km of the project area ensure that it is

well serviced in terms of power.

What is the Upside?

The production of an iron concentrate from this type of ore is a well known technology, as is the production of pig

iron/steel and vanadium. However, the economic recovery of a saleable titanium slag from this ore is yet to be proven.

Encouragingly, initial bench-scale smelting test work shows potential for a high TiO2grade slag. There is also a significant

phosphorous enrichment layer (more than 30m thick in parts) in the form of an apatite-bearing magnetite gabbro which

occurs immediately above the P-Q layer and could have economic significance. The Company also intends to acquire

additional farms adjacent to the existing project area, over an additional strike length of approximately 12km which couldmore than double the current resource. Upside also exists in the multi element nature of the deposit and potential

credits.


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What are the Risks?

We see metallurgy and sales to market as the key risks to the project. Both of these studies are currently being

undertaken by Bushveld Minerals and will determine the commercial viability of the project. The production of an iron

concentrate uses well-known technology and the production of a vanadium and titanium by product is also possible with

several Chinese smelters producing titanium slag. There is a limited domestic market for iron and vanadium, but

international markets may be the most likely destination for the ore. This would incur additional transport costs so wesuspect Bushveld would need to do some pre-reduction for what is essentially a low value per unit product.

Shares in Issue

The Company has 283,969,110 shares in issue and no options or warrants.

Valuation

Because of the early stage nature of the projects we have not constructed a DCF model for the project. Instead we have

compared the EV per tonne of metal of the resource based on a selection of comparable companies. The average EV per

tonne of metal in the ground for the Companys peer group in US$0.74 and US$268.7 for iron and tin respectively. Based

on the attributable resources and cash, this values Bushveld at 79.4M or 28p per share.


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BackgroundBushveld Minerals primary asset is the Mokopane VTM Project located approximately 65km west of the town of

Polokwane in the Mokopane District, South Africa. It also has exploration licences over the Mokopane tin deposit

covering five known areas of tin mineralisation located SW of the Mokopane VTM project. The location of the project

area in relation to existing infrastructure is shown in Exhibit 1.

Exhibit 1:Exhibit 1:Exhibit 1:Exhibit 1: Location of the Project ALocation of the Project ALocation of the Project ALocation of the Project Areareareareassss in South Africain South Africain South Africain South Africa in Relation to Existing Coal Deposits, Railway Infrastructure & Portsin Relation to Existing Coal Deposits, Railway Infrastructure & Portsin Relation to Existing Coal Deposits, Railway Infrastructure & Portsin Relation to Existing Coal Deposits, Railway Infrastructure & Ports

Source:Source:Source:Source: Bushveld Minerals


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Mokopane VTM Project

Background

The Mokopane VTM project covers a total area of 7,409ha and is located in the central portion of the Northern Lobe of

the Bushveld Complex, approximately 45km NNW of the town Mokopane, or approximately 260km NNE of

Johannesburg. It consists of a group of six adjacent farms namely Vogelstruisfontein 765LR, Malokong 784LR, Vliegekraal783LR, Vriesland 781LR and the recently added Schoonoord 786 LR and Bellevue 808 LR (Exhibit 2). The area is

characterised by flat lying to gently sloping ground, punctuated by a series of northerly trending hills in the east and the

higher plateau of Bushveld granite to the west. Fox-Davies personnel last visited the project area on 7thFebruary 2013

during an analyst and investor site visit.

ExhibitExhibitExhibitExhibit 2222: Location of t: Location of t: Location of t: Location of thehehehe SSSSixixixix FFFFarmsarmsarmsarms CCCComprising the Mokopaneomprising the Mokopaneomprising the Mokopaneomprising the Mokopane PPPProjectrojectrojectroject AAAArearearearea inininin RRRRelation to the MML & PQelation to the MML & PQelation to the MML & PQelation to the MML & PQ MMMMagnetiteagnetiteagnetiteagnetite LLLLayersayersayersayers

Source:Source:Source:Source: MSA

Geology

The Mokopane project occurs within the Bushveld Complex (BC or The Complex). The BC is the worlds largest

layered complex and is known for the remarkable geological and geochemical continuity of the magmatic igneous

stratigraphy. It can be separated into three main arcuate areas referred to as the Eastern, Western and Northern Lobes.

The BC is dated at 2055 Million years (Ma) and consists of a series of interconnected intrusive complexes comprising an

ultramafic-mafic succession of layered rocks known as the Rustenburg Layered Suite (RLS), quasi-contemporaneous

granites (the Lebowa Granite Suite) and felsic extrusives (the Rooiberg Group). The RLS is stratigraphically divided into

five main units; the Marginal Zone, Lower Zone, Critical Zone, Main Zone and Upper Zone (Exhibit 3).

The mafic to ultramafic layers of the BC have undergone a differentiation process which has resulted in the formation of

magnesium, chromium, nickel, copper and precious metal rich units found largely in the critical zone within the lower part

of the Complex with iron, titanium, vanadium and phosphorus rich layers developed in the Upper Zone. Gentle tilting

due to tectonic processes and subsequent erosion has caused the entire stratigraphic sequence to be exposed on

surface in the form of shallow westerly dipping units and layers.


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Exhibit 3Exhibit 3Exhibit 3Exhibit 3:::: Generalised StratigraphyGeneralised StratigraphyGeneralised StratigraphyGeneralised Stratigraphy of the Bushveld Complexof the Bushveld Complexof the Bushveld Complexof the Bushveld Complex

Source:Source:Source:Source: Implats

ExExExExhibithibithibithibit 4444:::: Geology of the Bushveld Complex with theGeology of the Bushveld Complex with theGeology of the Bushveld Complex with theGeology of the Bushveld Complex with the Location of the Project ALocation of the Project ALocation of the Project ALocation of the Project Area in the Northern Loberea in the Northern Loberea in the Northern Loberea in the Northern Lobe



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The Mokopane VTM deposit occurs within the Upper Zone of the Rustenburg Layered Suite Units of the Northern Lobe

(Exhibit 4). The Upper Zone is approximately 1,250m thick and dips 15 to 25 to the west. It is characterised by the

pervasive occurrence of VTM, present in disseminated form in highly variable amounts (1% to >20%), and as semi-

massive and massive layers of variable thicknesses. The geology of the Upper Zone consists of gabbronorite, gabbro, Ti-

magnetite gabbro (ferro-gabbro), olivine-diorite, ferro-diorite, anorthosite and minor norite and contains intervals of

disseminated, semi-massive and massive VTM. The rocks show remarkable continuity and individual layers can generallybe traced along strike for tens of kilometres.

The Mokopane deposit is comprised of two well defined layer units corresponding to the generally accepted

nomenclature of the Upper Zone; the P-Q Zone and the Main Magnetic Layer (MML). These two units, along with the

licence boundaries and boreholes drilled are shown in Exhibit 5. Fault zones rarely outcrop but displacement of strata

can generally be interpreted from aeromagnetic data.

ExhibitExhibitExhibitExhibit 5555: P: P: P: Poooosition of thesition of thesition of thesition of the PPPP----Q and MML LQ and MML LQ and MML LQ and MML Layersayersayersayers,,,, Farm BFarm BFarm BFarm Boundariesoundariesoundariesoundaries and Exploration Boreholes Dand Exploration Boreholes Dand Exploration Boreholes Dand Exploration Boreholes Drilledrilledrilledrilled ((((not including recentlynot including recentlynot including recentlynot including recently

addedaddedaddedadded Schoonoord 786 LR and Bellevue 808 LRSchoonoord 786 LR and Bellevue 808 LRSchoonoord 786 LR and Bellevue 808 LRSchoonoord 786 LR and Bellevue 808 LR farms adjacent to Vriesland)farms adjacent to Vriesland)farms adjacent to Vriesland)farms adjacent to Vriesland)


P-Q Zone

The P-Q Zone (Exhibit 6) occurs near the top of the Upper Zone. The layer occurs in the wide, soil-covered plains

between the Main Zone lithologies to the east and the Nebo granite plateau to the west (Exhibit 5) and is therefore not

easily recognised in the field other than by the presence of a distinctive reddish-brown soil containing abundant Ti-

magnetite (Exhibit 7).


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The P-Q Layer is approximately 25m thick and consists of the two semi-massive to massive VTM layers (P and Q)

which are separated by a 7m thick, low VTM grade, leuco-gabbro-norite parting with gradual contacts with the foot

and hanging wall rocks. The foot and hanging wall lithologies of the P-Q Layer contain considerable amounts of

disseminated Ti-magnetite which increase the total thickness of the wider mineralised zone to between 40m and 80m.

The P-Q Layer also shows considerable internal fluctuations in its VTM content. Apatite-bearing rocks with P2O5

concentrations of between 2% and 5% occur immediately above the P-Q Layer and are a common feature in theoverlying, uppermost portion of the Upper Zone.

ExhibitExhibitExhibitExhibit 6666:::: GGGGeological Model of theeological Model of theeological Model of theeological Model of the PPPP----Q layerQ layerQ layerQ layer


Exhibit 7: TheExhibit 7: TheExhibit 7: TheExhibit 7: The MokMokMokMokoooopanepanepanepane VTM Iron PVTM Iron PVTM Iron PVTM Iron Projectrojectrojectroject PPPP----Q ZoneQ ZoneQ ZoneQ Zone Exposed at Surface and TiExposed at Surface and TiExposed at Surface and TiExposed at Surface and Ti----Magnetite Rich Soil CMagnetite Rich Soil CMagnetite Rich Soil CMagnetite Rich Soil Coveroveroverover



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With the additional drilling and more detailed logging of the P-Q layer during 2012 the Company was able to define a

more detailed stratigraphy for the P-Q layer. This can be correlated along strike and down-dip between all the holes and

across the entire area drilled to date. These various stratigraphic zones have been defined based on clear changes in the

magnetite content of the ore and other geological information. Once the new stratigraphic system was defined all

previous holes in the P-Q layer were re-logged accordingly.

TableTableTableTable 1111:::: Stratigraphic SStratigraphic SStratigraphic SStratigraphic Subdivision of theubdivision of theubdivision of theubdivision of the PPPP----Q LQ LQ LQ Layerayerayerayer

STRATIGRAPHIC ZONESTRATIGRAPHIC ZONESTRATIGRAPHIC ZONESTRATIGRAPHIC ZONE

CODECODECODECODE

NAMENAMENAMENAME APPROXIMATE THICKNESSAPPROXIMATE THICKNESSAPPROXIMATE THICKNESSAPPROXIMATE THICKNESS DESCRIPTIONDESCRIPTIONDESCRIPTIONDESCRIPTION

PQHWPQHWPQHWPQHW P-Q hanging wall Variable All zones above the hanging wallmarker, including the phosphate horizon

HWMHWMHWMHWM Hanging wall marker 0.2m- 2.0m Pyroxenitic/more mafic horizon wherephosphate zone begins

Q3Q3Q3Q3 Q3 upper low-grade zone Generally 10m - 15m, but maybe up to 50m

Upper Q-Ti-Magnetite ore zone,generally semi-massive to disseminatedore. Contains significant internal waste inplaces

Q2Q2Q2Q2 Q2 lower high-grade zone 10m - 15m Lower Q-Ti-Magnetite ore zone,generally massive ore.

Q1Q1Q1Q1 Q1 basal disseminated zone 3m - 4m Basal zone of disseminated Ti-Magnetiteore below the more massive Q2 horizon

PQPARTPQPARTPQPARTPQPART Parting between the P and QMagnetites

~5m Barren zone of gabbronortie separatingthe P and Q Magnetite layers

PMAGPMAGPMAGPMAG P Magnetite 2m - 4m P-magnetite zone, generally massive,but with some internal waste and oftencontaining more sulphides than the Qhorizon

PFWDIPFWDIPFWDIPFWDISSSSSSSS P-Magnetite disseminatedfootwall mineralisation

5m - 15m A zone of disseminated mineralisation inthe footwall to the more massive P-

Magnetite, lower grade but nonethelesssignificant

PQFWPQFWPQFWPQFW P-Q footwall 5m - 20m Barren gabbronorite footwall below thedisseminated footwall

OMAGOMAGOMAGOMAG O-Magnetite 0.2m -0.5m Narrow Magnetite marker band

OFWOFWOFWOFW O-magnetite footwall 0.5m -3.0m Barren zone between the N and OMagnetites

NMAGNMAGNMAGNMAG N-Magnetite 0.2m -2.0m Magnetite marker band

NFWNFWNFWNFW N-Magnetite footwall Variable Barren footwall to the N-Magnetite


Main Magnetic layer (MML)The MML lies in the lower portion of the Upper Zone and has been mined at the Mapochs VTM Mine in the Eastern

Bushveld Lobe since the 1960s and is currently owned by Evraz Highveld Steel and Vanadium Ltd. It consists of an upper

VTM-rich interval which is separated from the lower VTM-rich interval by a low VTM grade parting. The down hole width

for the entire MML package (upper and lower magnetite layers and parting) ranges between 8m and 10m and has an

average true thickness of 8.4m.

The entire MML package has an average vanadium content of approximately 1.3% V2O5with maximum concentrations of

1.5% to 1.7% V2O5in the massive VTM bands. These values compare favourably with the reported V2O5grades from the

Mapochs Mine (operated by Evraz Highveld Steel and Vanadium. Isolated (


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ExhibitExhibitExhibitExhibit 8888: Regional Aeromagnetic Map with Interpreted S: Regional Aeromagnetic Map with Interpreted S: Regional Aeromagnetic Map with Interpreted S: Regional Aeromagnetic Map with Interpreted Structuraltructuraltructuraltructural FFFFeatureseatureseatureseatures


Structure

Fault zones rarely outcrop in the area, but displacement of strata can be interpreted from aeromagnetic data and is

supported directly in some cases with evidence of displaced geological units encountered during mapping. Faulting is

characterised by major regional NE-SW to ENE-WSW striking sub-vertical fault zones (up to 2600m), and local ENE-WSWto E-W striking sub-vertical fault zones (up to 1400m). The project area is also intruded by two dolerite dyke sets. An

earlier E-W trending dyke set is crosscut by a later ENE-WSW trending dyke set (Exhibit 8).


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Exploration

Historic

The first detailed historical investigations on the project site were carried out in the 1970s and included mapping, ground

geophysics, trenching and limited drilling south of the Mokopane project. This work focussed mainly on the MML

because of its high vanadium content. The project area has not been previously explored for its Ti-magnetite potentialbut was covered by a regional geochemical soil sampling and mapping programme by the Council for Geoscience

(CGS).

During 1979 and 1980, the Mining Corporation Ltd (MCL), a South African government company, completed

geological mapping, magnetic surveys, and drilling over the five contiguous farms to the south of the Mokopane project.

The main focus was the vanadium potential of the MML layer and a non-JORC-compliant mineral resource along a 16km

strike of 419Mt of VTM-rich material containing 6.5Mt of V2O5was reported. The tonnages represent the total estimated

amount of Ti-magnetite concentrate potentially extractable from the Main Magnetite Group layers (MAG 1 to MAG 4)

to a vertical depth of 80m and the Lower Magnetite Group to a vertical depth of 200m.

A regional aeromagnetic and radiometric survey was conducted in the 1990s which showed prominent northerly-trendingmagnetic anomalies which were correlated with the MML and the P-Q Layer (Exhibit 8). A stratigraphic borehole BV-1 was

drilled in 1991 on the Bellevue farm approximately 2km south-west of the project area. The hole covered the entire

Upper Zone stratigraphy and intersected 32 discrete layers of Ti-magnetite or Ti-magnetite-rich rock ranging in thickness

between 7cm and 13m.

Current

Results of the CGS aeromagnetic survey was interpreted and followed by drilling which resulted in the intersection of the

PQ magnetite layer in 2010. Follow up work consisted of desktop reviews of existing data (geological mapping, soil

sampling, satellite imagery interpretation, rock chip sampling), and the first systematic drill programme on the project

was undertaken by Bushveld Minerals during 2010 and 2011. A total of 4,234.06m of diamond drill core from 17 diamond

drill holes on the farms Vliegekraal and Vriesland was completed. This included 4 drill holes totalling 902.02m on the

MML and 10 drill holes totalling 2,583.77m on the P-Q Zone. The holes were drilled at regular intervals of between 500m

and 1,200m along the strike of the deposit.

During 2012, a further 51 boreholes totalling 3490.95m were drilled on the farms Vliegekraal, Vriesland and Malokong. Of

these, 13 boreholes totalling 927.49m were drilled on the MML, of which ten intersected mineralisation (3 were drilled

into the footwall to the MML). Five boreholes totalling 1,525.39 m were drilled on the fresh (unweathered) P-Q zone, and

five fence lines totalling 33 boreholes and 1,038.07m were drilled into the weathered portion of the P-Q Zone. Of these

33 boreholes, 13 successfully intersected the P-Q Zone.


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Resources

The Mokopane VTM project currently has a total JORC resource of 818Mt split between the P-Q layer (752 Mt) and the

MML (66.21Mt).

MML Resource

The MML Layer wireframe was constructed primarily on whole rock geochemistry from core samples of the 2010/2011drilling campaign and extends 800m to the north and 900m to the south of drilling limits. The wireframe was limited to

100m depth as this is considered the likely limit of economic extraction within the near future for this 8m thick layer.

TableTableTableTable 2222:::: InferredInferredInferredInferred JORC Compliant Resource EJORC Compliant Resource EJORC Compliant Resource EJORC Compliant Resource Estimation for the MMLstimation for the MMLstimation for the MMLstimation for the MML (


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Table 4: Inferred JORC Compliant Resource ETable 4: Inferred JORC Compliant Resource ETable 4: Inferred JORC Compliant Resource ETable 4: Inferred JORC Compliant Resource Estimationstimationstimationstimation thethethethe PPPP----Q layerQ layerQ layerQ layer (200m(200m(200m(200m----400m)400m)400m)400m) of the Mokopane Projectof the Mokopane Projectof the Mokopane Projectof the Mokopane Project

LayerLayerLayerLayer TonnesTonnesTonnesTonnes SGSGSGSG FeFeFeFe Fe2O3Fe2O3Fe2O3Fe2O3 TiO2TiO2TiO2TiO2 V2O5V2O5V2O5V2O5 SiO2SiO2SiO2SiO2 Al2O3Al2O3Al2O3Al2O3 P2O5P2O5P2O5P2O5 SSSS

NameNameNameName millionmillionmillionmillion g/cm3g/cm3g/cm3g/cm3 %%%% %%%% %%%% %%%% %%%% %%%% %%%% %%%%

Q3Q3Q3Q3 143.57 3.57 29 43.3 8.8 0.09 28.3 10.3 0.13 0.63

Q2Q2Q2Q2 94.62 3.99 38.6 57.6 14.1 0.24 15.3 7.6 0.02 0.61

Q1Q1Q1Q1 23.71 3.67 31.8 47.5 11.3 0.27 21.6 10.5 0.02 0.52

PMAGPMAGPMAGPMAG 38.41 3.59 29.2 43.6 9.9 0.27 23.4 11.5 0.04 0.83

PFWDISSPFWDISSPFWDISSPFWDISS 73.64 3.37 25.7 38.3 6.9 0.21 30.2 12.8 0.03 0.43

TotalTotalTotalTotal 374374374374 3,653,653,653,65 30,9830,9830,9830,98 46,2346,2346,2346,23 10,0410,0410,0410,04 0,180,180,180,18 24,4624,4624,4624,46 10,2510,2510,2510,25 0,070,070,070,07


In the absence of adequately defined variography, the inverse distance squared method was used for the grade

estimation for all elements. Resource classification was applied as a function of the drill hole spacing. By virtue of the

wide drill hole spacing (1,900m), the MML is classified as an Inferred Mineral Resource down to a vertical depth of 100m.

Owing to the closer spacing of drill holes (600m), the P-Q Layers are classified as an Indicated Mineral Resource down to

a vertical depth of 200m, and as an Inferred Mineral Resource from vertical depths of 200m to 400m.

MSA also constructed waste models in order to estimate the depth cut-off that would be appropriate for the deposit

to have a reasonable potential for economic extraction. In the exercise, MSA created theoretical pits and calculated the

strip ratio that would be generated from such a mining scenario (Exhibit 9). An average stripping ratio of 5:1 was used as

the limit for any economic extraction. Based on this number, the possible depth limit of economic extraction is down to

200m for the P-Q Layer, and 100m for the MML, and this is the depth to which the valuation of the project has been

based.

ExhibitExhibitExhibitExhibit 9999:::: MSAMSAMSAMSA WWWWasteasteasteaste Models Showing Probable Stripping Ratios and Likely Depth Limits to Economic EModels Showing Probable Stripping Ratios and Likely Depth Limits to Economic EModels Showing Probable Stripping Ratios and Likely Depth Limits to Economic EModels Showing Probable Stripping Ratios and Likely Depth Limits to Economic Extractionxtractionxtractionxtraction


Exploration upside

Bushveld Minerals has progressed the project considerably in a short amount of time and increased the total resource by

28% from 641Mt to 818Mt since the IPO in March 2012. However there is still considerable potential upside to the asset

base.

Firstly, the Department of Mineral Resource (DMR) has just approved the Section 102 application to add the farms

Schoonoord 786 LR and Bellevue 808 LR to the licence area of 95PR. This has increased the strike length of the knownmineralisation from aeromagnetic and soil surveys on Bushvelds prospecting rights by 3.5km, a 64% increase in the strike

length of the P-Q zone. This has been confirmed by logging and sampling of the historical borehole BV-1 drilled on the

farm Bellevue 808 LR with similar grades and thicknesses to previous boreholes drilled by the Company into the P-Q

Zone. The P-Q Zone hosts the bulk of the current resource with 752Mt at 32% Fe, 10.5% TiO2and 0.19% V

2O

5.


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The Company believes these new licenses should increase the total resource to over 1Bt. Significantly the P-Q resource

includes a high grade zone with 184Mt at 39% Fe, 14% TiO 2and 0.24% V2O5and the additional mineralisation along strike

should increase access to this material which enables the Company to selectively mine the high grade material close to

surface. Further drilling should delineate this mineralisation and increase the current resource. From the regional

geophysics and knowledge of the geology of the area, it appears that the iron formation extends to the north and south

of the project area. If Bushveld Minerals are successful in acquiring further licences, there is the potential to substantiallyincrease the current resource.

Secondly, the mineralisation is expected to continue at depth, but the Company has (taking into account the thickness of

the mineralisation and an 180dip) limited its resource delineation to a depth of 400m beyond which the high stripping

ratios will ensure the resource not to be economically extractable in the foreseeable future. However the possibility exists

that conditions will change in the future, and advances in technology or supply and demand fundamentals in the iron ore

industry could make this ore economic. Perhaps underground mining methods will prove to be economic in the future

and this will be defined in a comprehensive feasibility study.

Thirdly, upside also exists in the multi element nature of the deposit. The production of an iron concentrate from this

type of ore is well known technology, as is the production of pig iron/steel and vanadium. Moreover the titanium market

is where supply and demand fundamentals are currently driving titanium prices upward, and the development of

technology which can release the titanium from slag will be able to supply a demand shortfall.

In the shallow parts of the P-Q Zone, there has been weathering of the gangue minerals to clay, and the ore is friable in

this zone. This weathering has an average depth of ~25 m and, although the gangue minerals have been altered, the

magnetite ore remains largely unaffected by this weathering. This weathered zone may prove easier to mine and

beneficiate, and could provide upside by lowering mining and processing costs in the early stages of mine development.

There is also known to be a significant phosphorous (P) enriched layer in the form of apatite bearing magnetite

gabbro, which occurs immediately above the P-Q layer, and assays of the hanging-wall to the P-Q layer have confirmed a

broad area of phosphate (P2O5) mineralisation. The mineralisation consists mainly of apatite (the phosphate mineral),

pyroxene and magnetite and is mineralogically similar to foskorite, the ore body being mined at the large phosphate

deposit in Phalabora, South Africa. Like the magnetite layers below it, this phosphate zone is consistent along strike and

down-dip, and ranges in thickness from 8m to over 60m and averages 31m, with grades of between 2% and 5% P2O5. This

is quite a thick zone, and it may be possible to extract higher grade zones and define a significant phosphate resource,

which could be further upgraded by the removal of disseminated magnetite in this zone through magnetic separation.

Foskor has a reserve grade of between 6.56% and 7.04% and consider ore down to 4% as marginally economical, so as a

by-product this has the potential to further improve the project economics, especially as the material would be stripped

as waste anyway. The DMR has just added Phosphate Rock (resource) to the list of minerals included within the

prospecting right and Bushveld expects to be able to define a phosphate resource in 2Q13.

Metallurgical Test Work

There is no recorded historical mineral processing or metallurgical test work on the VTM deposits of the project area,

MCL however produced Ti-magnetite concentrates under laboratory conditions in drill core intersected on the MML on

neighbouring farms, and determined the V2O5and TiO2contents by standard X-Ray Fluorescence analysis (XRF). The

percentage of titano-magnetite in the MML was reportedly between 67.7% and 74.8% and the VTM concentrate

contained between 1.62% and 1.69% V2O5. The latter vanadium concentrations are almost identical with the 1.69% V2O5

(after crushing, washing and screening) which EVRAZ Highveld reported on MML ore from its Mapochs Mine.

Since then Bushveld has carried out preliminary mineralogical and metallurgical test work on the Massive and the

Disseminated Magnetite Ore of the P-Q Zone to investigate the beneficiation characteristics. The metallurgical and

mineralogical characterization and densimetric test work was carried out by SGS with advisory input from PESCO. Afterinitial Davis Tube test work on a -75m fraction, preliminary Heavy Liquid Separation tests on coarse (-12mm to -6mm)

fractions were carried out on the Massive Ore. These tests showed that >75% iron recoveries and concentrate grades of

49-50% FeTwere achievable at these coarse sizes. Following this, additional DTT test work was done on both the massive

and the disseminated ores for a range of size fractions.


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For the Massive ore, tests were conducted on six size fractions between -500m and -38m. The best grades ( 55% Fe)

and the best recoveries ( 85 86.5%) were for the -500m, -212m and -106m size fractions (Table 5). As well as higher

recoveries there was also a significant reduction in SiO2and MgO abundances in the concentrate compared to the -6mm

and -12mm concentrates produced using Heavy Liquid separation (HLS). This suggests that fine grinding may not be

necessary, lowering the potential processing costs.

Recoveries for the disseminated zone were lower than for the massive ore possibly due to more of the iron being

incorporated into the minerals pyroxene and olivine in the disseminated ore. However, positive results were obtained for

all size fractions >106m producing >55.0% Fe products with >61% recoveries (Table 6).

The extractability and pyro metallurgical characteristics of the ore were also tested. The results released in October 2012

and January 2013, also included pre-reduction test work to see if a higher value pre-reduced iron ore product could be

produced.

Table 5Table 5Table 5Table 5:::: DTT Results for the PDTT Results for the PDTT Results for the PDTT Results for the P----Q Massive OreQ Massive OreQ Massive OreQ Massive Ore:::: 106106106106mmmmReflects the Optimal Concentrate Product Grade and RReflects the Optimal Concentrate Product Grade and RReflects the Optimal Concentrate Product Grade and RReflects the Optimal Concentrate Product Grade and Recoveriesecoveriesecoveriesecoveries

Grade in CGrade in CGrade in CGrade in Concentrateoncentrateoncentrateoncentrate

Other Elements in COther Elements in COther Elements in COther Elements in Concentrateoncentrateoncentrateoncentrate

GrindGrindGrindGrind

fractionfractionfractionfraction

FeFeFeFe TiOTiOTiOTiO VOVOVOVO

Grade %Grade %Grade %Grade % Recovery %Recovery %Recovery %Recovery % Grade %Grade %Grade %Grade % Recovery %Recovery %Recovery %Recovery % Grade %Grade %Grade %Grade % Recovery %Recovery %Recovery %Recovery % AlO%AlO%AlO%AlO% SiO%SiO%SiO%SiO% MgO%MgO%MgO%MgO% CaO%CaO%CaO%CaO%

----12mm12mm12mm12mm

++++1mm1mm1mm1mm48.9 79.20 18.5 79.80 0.32 89.70 3.29 5.87 1.73 0.96

----6mm6mm6mm6mm

+1mm+1mm+1mm+1mm50.1 73.40 19.0 74.90 0.33 78.50 2.88 4.66 1.65 0.75

----500m500m500m500m 54.854.854.854.8 86.4986.4986.4986.49 18.518.518.518.5 80.6780.6780.6780.67 0.390.390.390.39 NDNDNDND 2.802.802.802.80 1.171.171.171.17 0.970.970.970.97 0.110.110.110.11

----212m212m212m212m 55.155.155.155.1 84.7584.7584.7584.75 18.718.718.718.7 79.3979.3979.3979.39 0.350.350.350.35 94.1194.1194.1194.11 2.832.832.832.83 1.221.221.221.22 0.970.970.970.97 0.110.110.110.11

----106106106106mmmm 54.854.854.854.8 86.86.86.86.30303030 18.418.418.418.4 80.0580.0580.0580.05 0.360.360.360.36 NDNDNDND 2.822.822.822.82 1.171.171.171.17 0.980.980.980.98 0.120.120.120.12

----75m75m75m75m 55.0 77.93 18.3 71.53 0.35 86.64 2.78 1.13 0.92 0.11

----53m53m53m53m 55.5 43.93 18.3 40.02 0.42 58.17 2.81 1.24 0.93 0.12

----38m38m38m38m 54.6 35.69 17.8 32.15 0.36 41.18 2.89 1.67 0.98 0.21



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TableTableTableTable 6666:::: DTT Results for the PDTT Results for the PDTT Results for the PDTT Results for the P----Q Disseminated OreQ Disseminated OreQ Disseminated OreQ Disseminated Ore

Grade in CGrade in CGrade in CGrade in Concentrateoncentrateoncentrateoncentrate

Other Elements in COther Elements in COther Elements in COther Elements in Concentrateoncentrateoncentrateoncentrate

GrindGrindGrindGrindfractionfractionfractionfraction

FeFeFeFe TiOTiOTiOTiO VOVOVOVO

Grade %Grade %Grade %Grade % Recovery %Recovery %Recovery %Recovery % Grade %Grade %Grade %Grade % Recovery %Recovery %Recovery %Recovery % Grade %Grade %Grade %Grade % Recovery %Recovery %Recovery %Recovery % AlO%AlO%AlO%AlO% SiO%SiO%SiO%SiO% MgO%MgO%MgO%MgO% CaO%CaO%CaO%CaO%

----500m500m500m500m 55.155.155.155.1 61.4561.4561.4561.45 17.817.817.817.8 63.463.463.463.47777 0.250.250.250.25 NDNDNDND 2.872.872.872.87 1.781.781.781.78 0.840.840.840.84 0.190.190.190.19

----212m212m212m212m 55555555 63.163.163.163.1 17.717.717.717.7 64.9764.9764.9764.97 0.240.240.240.24 NDNDNDND 2.912.912.912.91 1.971.971.971.97 0.90.90.90.9 0.210.210.210.21

----106m106m106m106m 54.854.854.854.8 61.8861.8861.8861.88 17.717.717.717.7 63.9563.9563.9563.95 0.360.360.360.36 NDNDNDND 2.872.872.872.87 1.81.81.81.8 0.860.860.860.86 0.20.20.20.2

----75m75m75m75m 55.1 51.98 17.7 53.38 0.23 85.15 2.89 1.94 0.86 0.21

----53m53m53m53m 54.7 25.55 17.4 16.46 0.22 0.79 2.96 2.25 0.89 0.25

----38m38m38m38m 54.5 7.74 17.1 3.99 0.27 0.24 3.19 2.95 0.95 0.37



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Mining and Processing Options

Given the nature of the mineralisation it is envisaged that in the current market only the top 200m of mineralisation could

be mined economically. However, the mineralisation occurs in a thick package of about 45m dipping at around 18 and

sub-outcropping below a thin (1 3m thick) soil layer, giving it the potential for a low stripping ratio. In addition the deep

weathering profile down to 30m means it could initially be relatively easy to excavate and crush reducing initial operating

costs, although physical test work still needs to be carried out on both the weathered and fresh ore.

As titanium dioxide has a very high melting point (1,843C) it will produce a slag that will freeze a traditional blast furnace.

However, as technologies have adapted, the processing of such ore has become economic and these ores are regularly

processed with companies such as the Panzhihua Iron and Steel group in Sichuan (Chinas largest vanadium producer

and Western Chinas largest steel producer) using titano-magnetite similar to that of the P-Q Zone as a 100% feed for its

blast furnaces.

Overall we expect crushing and milling parameters to be similar to EVRAZ Highveld where a titanium and vanadium rich

iron concentrate is produced using gravity and Dense Media Separation (DMS) methods. This product could then be sent

or sold to a specialist smelter for pyro-metallurgical treatment to produce pig iron and a vanadium/titanium rich slag. At

some stage, Bushveld may look to build a smelter themselves given the increasing availability of coking and thermal coal

from the rapidly developing Waterberg coalfields. Additionally, the latest test work is looking at producing an additional

pre-reduced product that can be used direct into a blast furnace increasing potential sale prices.

ExhibitExhibitExhibitExhibit 11110000:::: Example ProcessExample ProcessExample ProcessExample Process----FFFFlow for alow for alow for alow for a Pig Iron ProductPig Iron ProductPig Iron ProductPig Iron Product,,,, including an Iincluding an Iincluding an Iincluding an Intermediatentermediatentermediatentermediate PrePrePrePre----RRRReduceduceduceduction Ption Ption Ption Processrocessrocessrocess

Source:Source:Source:Source: Evraz Highveld Steel and Vanadium

Alternatively a processing route similar to the one that Baobab Resources (Baobab) intend to use on its Tete VTM

deposit could prove to be a less expensive option. Davis Tube Recovery analysis was performed on samples from

Baobabs deposit which indicated that its ore could be processed using both a high and low magnetic separation circuit

to produce two concentrates: a low magnetic separation circuit producing a ferro-vanadium concentrate containing high

grade iron and vanadium, supplemented by a high magnetic separation circuit which could produce a concentrate

containing high grade TiO2. The Baobab proposed process flow sheet is shown in Exhibit 11.


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ExhibitExhibitExhibitExhibit 11111: Proposed Process Flow S1: Proposed Process Flow S1: Proposed Process Flow S1: Proposed Process Flow Sheet for Baobabs VTM depositheet for Baobabs VTM depositheet for Baobabs VTM depositheet for Baobabs VTM deposit

Source:Source:Source:Source: Baobab Resources

ExhibitExhibitExhibitExhibit 11112222:::: Example Processing PrecedentsExample Processing PrecedentsExample Processing PrecedentsExample Processing Precedents

ProcessorProcessorProcessorProcessor ProcessProcessProcessProcess Crude steel productionCrude steel productionCrude steel productionCrude steel production in 2010in 2010in 2010in 2010 ProductsProductsProductsProducts

New Zealand Steel, NewZealand

Multi hearth furnaces, rotarykilns, submerged arc furnaces

850,000 tonnes Concentrated ore, steel andvanadium slag

Highveld, South Africa Rotary kilns, submerged arcfurnaces

777,000 tonnes FeV, vanadium slag, steel andalloys

NTMK (Evraz), Russia Blast furnace route 4.3 million tonnes Ore, VO, FeV, steel products

Chengde (HBIS), China Pelletizing, blast furnaceroute

7.5 million tonnes VO, FeV, vanadium slag, steel

Panzhihua Steel, China Blast furnace route 8.4 million tonnes VO, FeV, vanadium slag, steel

Various small processors, China Blast furnace route - VO, FeV, vanadium slag, steel

Chusovskoy, Russia Blast furnace route ~115,000 tonnes VO, FeV, vanadium slag steel

QIT, Canada Special reduction furnaces ~750,000 tonnes Titanium slag, pig iron and steel

Richards Bay Minerals, SouthAfrica

Calciner, charring plant andelectric arc furnaces

- Titanium slag, pig iron, zircon andrutile

Vanchem, South Africa Solvent extraction - VO, FeV, vanadium chemicals

Source:Source:Source:Source: Bushveld Minerals, CRU


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Marketing and Product Sales

Although the final product specification has not yet been defined, in the first instance it is likely to be a vanadium and

titanium bearing iron concentrate. EVRAZ Highveld produces steel and vanadium slag products at its Emalahleni

steelworks nearby, as well as mining VTMs from its Mapochs Mine. The Company uses vanadium-bearing iron ore from

Mapochs to produce a slag that contains 20% vanadium oxide. In 2010 it produced 64,000 tonnes of vanadium slag which

was predominantly sold in the domestic market and internationally to independent converters for the downstreamproduction of vanadium-bearing products.

EVRAZ Highveld could potentially take the Mokopane ore for processing but we think this is an unlikely scenario as its

sales were flat for 2011 due to weakness in domestic demand caused by a weakening South African economy. Also

EVRAZ Highveld has large in-ground resources which they could potentially ramp up mining production and therefore

have little need for extra smelting feed.

Alternatively, Bushveld Minerals could sell its products to the international market, for which there is no lack of demand

for pig iron, although there would be increased transport costs. The final customer for the Bushveld Minerals ore will

need to be investigated and remains a key risk to the project in our view until off-take agreements can be signed.

An alternative for the product could be for Bushveld Minerals to build its own smelter facilities, but we do not see this as

a viable option in the short term. The capital required to undertake this option would be prohibitive for a junior miner

such as Bushveld, especially when considering the uncertainty of the sales markets. A 2009 study into building a smelter

in the area estimated the capex required at nearly US$500M. Permitting would also be a lengthy process for such an

endeavour.

Infrastructure

Iron ore plays are as much about the access to infrastructure as it is about the deposit. Bushveld Resources projects are

well located for rail, port and road infrastructure. Johannesburg can be accessed in less than four hours by the major N1

motorway. The R518 tarred secondary road runs through the property. This existing infrastructure gives Bushveld a

competitive advantage regarding transport costs and possible capital outlay when compared to some of its peers in

western Africa.

Port and Rail

The nearest rail line is only 45km from the project and links to Mokopane which in turn connects Polokwane (65km east of

the project area) to Johannesburg and several ports on the eastern coast. Bottlenecks in the rail infrastructure mean that

access can be limited and must be negotiated. However, there is the potential for immediate access to ~1-2Mt pa and

eventually up to 5Mt once the line is upgraded.

There are various export options including both Matola in Mozambique and Richards Bay, both of which are expected to

increase in capacity. Transnets ZAR300 billion capital investment programme expected to expand rail and port

infrastructure capacity over the next 7 years.


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ExhibitExhibitExhibitExhibit 13: Rail and Port I13: Rail and Port I13: Rail and Port I13: Rail and Port Infrastructure in South Africanfrastructure in South Africanfrastructure in South Africanfrastructure in South Africa

Source:Source:Source:Source: Transet

Power

The region is served by major existing power infrastructure. The 765kV Matimba-Witkop power line passes 25km north of

the property and the project is 150km from the new Medupi power station and only 15km from proposed Eskom 110kV

transmission line and substation. In addition the project is in close proximity to the Waterberg coal-fields where IPP

projects are being built in addition to Eskoms existing 3,990MW Matimba power station and new Medupi 4800MW

Power Station which was commissioned last year.

Transmission capex should be kept to a minimum as there is extensive existing transmission infrastructure within a 20km

radius of the project: including Matimba/Witkop dual 400kV lines, the Witkop/PPRust 132kV line and the PPRust 132kV

Substation

ExhibitExhibitExhibitExhibit 14141414:::: Power Infrastructure ClPower Infrastructure ClPower Infrastructure ClPower Infrastructure Close to the Pose to the Pose to the Pose to the Projectrojectrojectroject



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Water

Water availability may be limited due to the semi-arid environment. However, there is currently an advanced study to

pipe water to the project area. As part of Phase 2 of the Olifants River Water Resources Development Project (ORWRDP)

water will be pumped from the Flag Boshielo Dam to the town of Mokopane. A nine company consortium has been set

up and is currently engaged in feasibility studies for a ~140ML/day pipeline from Flag Boshielo Dam, 80 KM from project

site.

ExhibitExhibitExhibitExhibit 11115555:::: Power Infrastructure Close to the PPower Infrastructure Close to the PPower Infrastructure Close to the PPower Infrastructure Close to the Projectrojectrojectroject


Other Services

Mining services and human resources are also readily available in the area which has a long history of mining. There are

nearby operating platinum, chrome and gold mines. Drilling contractors, services and consultants are available inJohannesburg and the greater Gauteng area.


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Future work programmeWhen the Company listed in the London Stock exchange in March 2012, it had a clear set of goals it wanted to achieve

by the end of 1H13. These formed the basis of the Companys immediate priorities and objectives and revolve around

the completion of a scoping study by the end of 1Q13.

Although not essential, the Company also wants to prove up a >1Bt JORC compliant resource.

The Company is well on its way to achieving these goals having updated and upgraded the resource and carried out the

required metallurgical test work. The next step is the release of the scoping study which should be out before the end of

the period and will give us an idea of the potential markets for the products from Mokopane. Once this is done work on

the full feasibility study will commence alongside the required permitting applications with the eventual aim of

production in 1H15.

ExhibitExhibitExhibitExhibit 11116666:::: Bushveld Minerals Iron Ore Work ProgrammeBushveld Minerals Iron Ore Work ProgrammeBushveld Minerals Iron Ore Work ProgrammeBushveld Minerals Iron Ore Work Programme

1H'121H'121H'121H'12 2H'122H'122H'122H'12 1H'131H'131H'131H'13 2H'132H'132H'132H'13 1H'141H'141H'141H'14 2H'142H'142H'142H'14 1H'151H'151H'151H'15

Acquisition of nearby landAcquisition of nearby landAcquisition of nearby landAcquisition of nearby land

DrillingDrillingDrillingDrilling

Scoping study incorporating:Scoping study incorporating:Scoping study incorporating:Scoping study incorporating:

Infrastructure Scoping StudiesInfrastructure Scoping StudiesInfrastructure Scoping StudiesInfrastructure Scoping Studies

HydrologyHydrologyHydrologyHydrology

Mining scoping StudiesMining scoping StudiesMining scoping StudiesMining scoping Studies

Market StudiesMarket StudiesMarket StudiesMarket Studies

Feasibility studiesFeasibility studiesFeasibility studiesFeasibility studies

Licensing & PermittingLicensing & PermittingLicensing & PermittingLicensing & Permitting

ProductionProductionProductionProduction



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Tin Greenhills ResourcesBushveld has ambitious plans for its tin resources and aims to develop the largest African portfolio of tin assets targeting

over 200kt of contained Sn and a 12-18 month production profile targeting an initial 3ktpa. This will involve consolidating

assets not just inside South Africa but in the rest of Africa, targeting the Great Lakes region of Rwanda, Southern DRC

and Uganda. However its initial focus is on its South African assets, especially the Mokopane Tin project.

Background

The Mokopane tin project is located SW of the Mokopane Fe project and consists of the 13,420ha New Order

Prospecting Right (PR) LP 2205 PR, with several more under consideration. The PR is valid for five years until July 2015

and gives Bushveld Minerals the right to explore for tin, rare earth metals, fluorspar, molybdenum, gold, arsenic,

uranium, zirconium, iron ore and zinc.

ExhibitExhibitExhibitExhibit 11117777:::: Bushveld Minerals Mokopane Tin ProjectBushveld Minerals Mokopane Tin ProjectBushveld Minerals Mokopane Tin ProjectBushveld Minerals Mokopane Tin Project Red, TinRed, TinRed, TinRed, Tin----bearing Bobbejaankop Granitebearing Bobbejaankop Granitebearing Bobbejaankop Granitebearing Bobbejaankop Granite

Source:Source:Source:Source: Fox-Davies Capital

The PR is defined by a series of contiguous farm boundaries, namely Zaaiplaats 223KR, Roodepoort 22KR, Groenfontein227KR, De Hoogedoorns 233KR and Salomons Temple 230KR. Outcrops of disseminated tin mineralisation and historic

workings delineate the exploration targets within the PR, with the Groenfontein and Zaaiplaats prospects being the two

primary targets. Two other targets, Salomons Temple and Union Tin Member are lower priority, but further exploratory

work will be carried out this year. A fifth target, Appingendam lies within the Appingendam 805LR farm boundary and is

in the process of being acquired by Bushveld Minerals but is still subject to government approval. A map of the property

as defined by the description in the PR and the relative location of the Groenfontein and Zaaiplaats targets are shown in

Exhibit 18. To date only Groenfontein has a JORC resource of ~6kt of Sn (tin) at 0.15% Sn, although Zaaiplaats has

produced over 100kt of tin historically.


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ExhibitExhibitExhibitExhibit 18181818: Loc: Loc: Loc: Location of the Bushveld Mineralation of the Bushveld Mineralation of the Bushveld Mineralation of the Bushveld Minerals Licencess Licencess Licencess Licences HighligHighligHighligHighlighting the Groenfontein andhting the Groenfontein andhting the Groenfontein andhting the Groenfontein and Zaaiplaats Project AreasZaaiplaats Project AreasZaaiplaats Project AreasZaaiplaats Project Areas


GeologyThe Mokopane tin project is situated within the Lebowa Granite Suite on the Northern Limb of the Bushveld Complex.

Three major types of granite occur within the Lebowa Granite Suite: the Nebo, Bobbejaankop, and Lease Granites.Mineralisation occurs as cassiterite (SnO2) within the red Bobbejaankop and fine grained Lease Granites in pipe-like

bodies, sub-horizontal lenticular bodies and/or as a sub-horizontal disseminated low grade mantos. The higher grade

pipes are of hydrothermal origin and cross-cut the disseminated deposits, although these pipes have largely been mined

out historically.

Groenfontein Target

The mineralisation in the Groenfontein prospect is hosted within the Lease Granite, a fine-grained aplite that forms a thin

(up to 120m) but continuous hood facies to the Bobbejaankop Granite. The mineralisation is thought to be

synformational with the granite and has been emplaced by late pulses of volatile element enriched granite into the

system. There does not appear to be any evidence of brecciation or distinct veining associated with the emplacement of

the mineralisation. The mineralisation style within the Bobbejaankop Granite is disseminated cassiterite and high grade

pipes of hydrothermal origin.

The disseminated mineralisation, which is the main target for Bushveld Minerals, is found immediately below the contact

with a pegmatite which is a discontinuous feature in the roof of the Lease Granite, close to the contact with the overlying

Rashoop Granophyre (Exhibit 18). This zone of mineralisation is more irregular than the larger disseminated body and

does not generally crop out at surface. It has been locally mined in the past.

From drilling it is believed that local high-grade pipe-like bodies exist within and below the lower-grade mineralised

zones. Recent results include 16.86% Sn over 1m, but although high-grade, they are not voluminous and do not make up

a significant resource. An example of Lease Granite core, displaying disseminated cassiterite mineralisation is shown in

Exhibit 19.


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ExhibitExhibitExhibitExhibit 19:19:19:19: Fine Grained, RedFine Grained, RedFine Grained, RedFine Grained, Red Lease Granite of the Groenfontein Deposit Displaying Disseminated Cassiterite MLease Granite of the Groenfontein Deposit Displaying Disseminated Cassiterite MLease Granite of the Groenfontein Deposit Displaying Disseminated Cassiterite MLease Granite of the Groenfontein Deposit Displaying Disseminated Cassiterite Mineralisation.ineralisation.ineralisation.ineralisation.

Source:Source:Source:Source: Fox-Davies Site Visit

Zaaiplaats Target

The mineralisation in the Zaaiplaats prospect is hosted within the Bobbejaankop Granite, a medium to coarse-grained,

deep red rock with a distinctive texture composed of linked chains of quartz amphibole and cassiterite. The dark areas

are cavities filled with hydrothermal minerals including cassiterite, scheelite, sericite, and fluorite. The mineralisation is

associated with fluorite alteration and there is often the presence of pyrite, chalcopyrite and scheelite. The zone of

mineralisation crops out at surface and extends NE-SW along the strike for over 500m and forms the bulk of

mineralisation identified.

Fox-Davies staff examined core from the Zaaiplaats and Groenfontein prospects while onsite early last year and found it

difficult to differentiate between the high grade mineralised intervals and low grade material in terms of alteration, grainsize and mineralogy. There appears to be very little visual differentiation between high and low grade zones suggesting

that grade control will be done through blast hole sampling.

Mining and Exploration History

Historic Mining and Exploration

Cassiterite was first discovered in the area in 1905 which led to the establishment of the Groenfontein Tin Mine and the

Zaaiplaats Tin Mining Company. The Zaaiplaats Tin Mining Company produced cassiterite concentrate and tin metal

continuously from its inception to its closure in 1989. Much of the historic mining was focussed on the extraction of high-

grade pipe-like ore bodies, and only limited mining of disseminated ore was carried out, as it was considered

uneconomic at the time. Over 21 000 tonnes of tin metal has reportedly been mined in the Groenfontein area.

Modern exploration of the area commenced in the 1960s. Transvaal Consolidated Lands (TCL) led a targeting exercise

in 1962 that identified the Roodepoort and Groenfontein as targets for further exploration. A wide spaced follow-up

percussion drilling programme comprising 12 drill holes was conducted in 1963 over the disseminated cassiterite target

on Groenfontein. The details of the sampling and assay methodology are not available; however the programme

established a broad, anomalous zone of tin mineralisation.

In 1976, a detailed systematic surface sampling programme was carried out over the southern part of Groenfontein and

Groendoorn. The entire area was sampled except the areas covered by tailings from the Zaaiplaats Tin Mine and

alluvium. Granite chip samples and soil/alluvial/elluvial samples were collected on a 10m by 5m grid on selected areas.

The results of the geochemical sampling programme are depicted on Exhibit 22 where geochemical anomalies definedthe outcrop areas of tin mineralisation on Groenfontein and Zaaiplaats. The geochemical results prompted the planning

and execution of a phased percussion and diamond core drilling programme on Groenfontein during 1978, to further

investigate the disseminated tin mineralisation. The programme consisted of 203 holes for 8,292m and an average hole

depth of 41m. The distribution and coverage of the historic drilling programme is shown in Exhibit 20.

Cassiterite MCassiterite MCassiterite MCassiterite Mineralisationineralisationineralisationineralisation


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ExhibitExhibitExhibitExhibit 22220: Location of Historic Drill Holes on the Groenfontein T0: Location of Historic Drill Holes on the Groenfontein T0: Location of Historic Drill Holes on the Groenfontein T0: Location of Historic Drill Holes on the Groenfontein Targetargetargetarget


The drilling defined an approximately 200m wide, NW-SE trending zone of anomalous tin mineralisation (>0.02% Sn)

extending for over 1km and open ended on both ends. Within this zone is a core of mineralisation with a 0.05% Sn cut-off

grade that extends for over 600m, and within this core are two contiguous, more highly mineralised zones defined by a

cut-off grade of 0.1% Sn. These cover a combined area of approximately 125m by 325m in extent and broadly

correspond to the surface outcrop of the disseminated tin mineralisation.

Current Exploration

Groenfontein

Bushveld Minerals conducted diamond drilling programmes on the Groenfontein target in 2010 and 2011 which focussed

on an area where extensive mining activity has taken place in the past. The drilling targeted the disseminated tin

mineralisation in the Lease Granite and aimed to verify historical drilling of the Groenfontein prospect by twinning some

of the historical holes, and move the prospect towards a scoping or feasibility study.


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In 2010, Bushveld Minerals drilled 53 holes of which 22 are twins. The results of the recent holes were compared

statistically with the historical holes and found to verify the original assay values to an acceptable degree of confidence.

This allowed the historical holes to be used in a modern, JORC compliant resource estimation. The best intersections

encountered include:

6m at 0.99% Sn from BH080

2m at 1.08% Sn from BH024

1m at 16.86% Sn and 18m Sn @ 0.41% from BH042

2m at 5.76% Sn from BH043; and

11m at 0.46% Sn from BH175.

A further 20 holes were completed in 2011 to test the deeper horizons of the mineralisation and in 2012 started an

estimated 20 RC holes of extension drilling and 58 RC holes of infill drilling programme in order to bring more of thecurrently defined indicated and inferred JORC compliant resources into the measured category. These results have not

been included in the most recent resource estimation. An example of a historical mine shaft and Bushveld Minerals drill

collars are shown in Exhibit 21.

Zaaiplaats

At Zaaiplaats the Company initially carried out a survey of the old mine workings, both underground and in the open pit,

and undertook a rock chip sampling programme. Higher grade mineralisation formed a NE-trending zone in the

Bobbejaankop Granite and outcrops corresponded with two open pits connected by underground workings. Based on

these results an initial drilling programme was carried out to confirm both surface and underground mineralisation. A

total of 43 holes were drilled and once the assays are available the Company expects to declare an initial JORC resource

in 2Q13.


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ExhibitExhibitExhibitExhibit 22221: Historic Wor1: Historic Wor1: Historic Wor1: Historic Workings Targeting Highkings Targeting Highkings Targeting Highkings Targeting Higherererer GradeGradeGradeGrade DisseminatedDisseminatedDisseminatedDisseminated Tin MTin MTin MTin Mineralisationineralisationineralisationineralisation in Lease Granitein Lease Granitein Lease Granitein Lease Granite (LHS).(LHS).(LHS).(LHS).

BBBBushveld Minerals Dushveld Minerals Dushveld Minerals Dushveld Minerals Drrrrill Cill Cill Cill Collarsollarsollarsollars ((((RHSRHSRHSRHS))))

Source:Source:Source:Source: Fox-Davies personnel

Resources

Following the results of the 2010 drilling programme, Bushveld Minerals commissioned an estimation of the tin resource

of the Groenfontein prospect from Independent Resource Estimations (IRES), a small, independent geological

consultancy. A grade-based wireframe was compiled from scanned plans and sections of the original drilling. The contact

of the Lease granite with the pegmatite was separated from the main disseminated body by a distinct wireframe in order

to keep the two populations independent of the influence on each other and prevent smearing of grades between the

two. The grades within the main envelope were interpolated using Ordinary Kriging methods. A specific gravity of 2.65

g/cm3, based on picnometer readings of sample pulp material was used to convert volume into tonnes. The final

estimated tonnes and grade of the deposit, at a 0.1% Sn cut-off grade, is shown in the mineral resource statement in

Table 7.

TableTableTableTable 7777: JORC Compliant Resource E: JORC Compliant Resource E: JORC Compliant Resource E: JORC Compliant Resource Estimation at a 0.1% Sn cutstimation at a 0.1% Sn cutstimation at a 0.1% Sn cutstimation at a 0.1% Sn cut----off gradeoff gradeoff gradeoff grade for the Groenfonteinfor the Groenfonteinfor the Groenfonteinfor the Groenfontein MMMMineralisationineralisationineralisationineralisation


TonnesTonnesTonnesTonnes GradeGradeGradeGrade Sn MetalSn MetalSn MetalSn Metal

TTTT %%%% TTTT

MeasuredMeasuredMeasuredMeasured 1,177,000 0.179 2,107

IndicatedIndicatedIndicatedIndicated 1,918,000 0.14 2,685

M+IM+IM+IM+I 3,095,000 0.155 4,792

InferredInferredInferredInferred 898,000 0.134 1,203

TotalTotalTotalTotal 3,993,0003,993,0003,993,0003,993,000 0.150.150.150.15 5,9955,9955,9955,995


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The low cut-off grade used was due to the following reasons:

The median value for tin between 31 July 2009 and 31 July 2011 was approximately US$24,000 per tonne. At a

grade cut-off of 0.05% this is equivalent to a value cut-off (in situ) of US$12 per tonne, with an average in situ

ore value of US$25 per tonne (at an average grade of 0.104% Sn). This would be a total of nearly US$200M

worth of contained metal

The deposit is outcropping at surface, which means that there are no stripping or underground development

costs

A 0.05% Sn cut-off provides for a contiguous zone of surface mineralisation (approximately 500m x 125m by

20m thick at an average grade of 0.104% Sn) which would be relatively easy to mine; and

The resource is the first of two geologically similar targets to be investigated on the property, with a further

three targets identified, all within a short distance of each other.

Following the completion of the 2012 drilling programme at Zaaiplaats, the assays should be received shortly and theCompany expects to declare an initial JORC resource later this quarter.

Exploration potential

The current resource estimation delineates the Groenfontein disseminated tin prospect, but further upside can be found

in the exploration of the Zaaiplaats prospect which lies along strike from Groenfontein and is geologically very similar

(Exhibit 22). There is also the possibility of finding upside in high grade pipe features that were missed by historical

miners, especially in the deeper parts of the deposit. There is some evidence in the modern drilling that some of these

pipes still exist, unmined.

In addition to the Groenfontein and Zaaiplaats targets, which are the focus of the recent drilling, three other targets have

been identified in the project area. These are:

Salomons Tempel Target, historically mined on a limited scale for tin in the Lease Granite;

Appingendam Target, a vein system historically mined for tin, molybdenum and rare earth elements in the

Bobbejaankop and Lease Granites. The Appingendam target is located on the Appingendam Farm 805 LR

for which Bushveld Minerals has applied for the licence but which is pending approval; and

Union Shale Target historically mined on a limited scale for tin from breccia bodies and structures

associated with the Union Tin Shale unit in the overlying felsites of the Rooiberg Group.

Higher-grade parts of each of these targets have been partially mined historically on various scales for tin and otherelements. None of these targets have been previously investigated for lower-grade styles of mineralisation. They are

therefore key targets for further exploration and expansion of the tin resource in the project area. Bushveld Minerals

plans to drill all five prospects and has a target of 20 000 tonnes of contained tin for the project.


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ExhibitExhibitExhibitExhibit 22222: Mokopane Tin P2: Mokopane Tin P2: Mokopane Tin P2: Mokopane Tin Prorororoject Exploration Tject Exploration Tject Exploration Tject Exploration Targetsargetsargetsargets and Results of Historic Geochemical Sand Results of Historic Geochemical Sand Results of Historic Geochemical Sand Results of Historic Geochemical Surveyurveyurveyurvey


Mining and Processing

The mineralisation appears to be shallow in nature, which should reduce the strip ratio of the mining (which would

essentially be a number of quarries) and save on development costs. Mining costs would be relatively low compared to

other tin projects around the world, but blasting will be required as the granites are hard, even at the surface.

Metallurgical test work is currently underway on the disseminated ores of the Mokopane tin project, but initial thoughts

on the processing route for the cassiterite have been contemplated by MSA Group. They believe that a primary,secondary, tertiary and quaternary crushing circuit could be utilised to reduce the ore to approximately sand sized with

no milling involved. Then a riffle shaking table could be used to gravity separate the cassiterite from the gangue mineral.

Froth flotation can be used to separate the fine cassiterite particles created during crushing (due to its extreme

brittleness). It is worth noting that these are brownfield targets with history of successful production and processing of

this tin ore.


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ValuationDue to the early stage nature of the projects we have not constructed a discounted cash flow DCF model for the

project. Instead we have compared the EV per tonne of metal of the JORC (or similar) compliant resource based on a

selection of comparable companies including explorers and producers. Although not ideal, until the scoping study is

produced it is the best method we have for valuing the project in the current market. However, the method is entirely

dependent on the peer group selected and can truly reflect the vagaries of each project in the way a DCF based

valuation can. In particular the valuation doesnt reflect the difference between head and recovered grades or the impact

of by-product credits.

Mokopane Iron Ore

Table 8 shows a list of VTM explorers and producers. All of these companies have flagship deposits which contain all

three elements in the resource, namely iron, titanium and vanadium. A brief description of the companies is provided in

the table below. Reviewing the peer group shows that the grades of iron, titanium and vanadium for the Mokopane

project are high relative to its peers, and total tonnes of contained metal also compare for all three elements. We have

compared the EV per tonne of iron for each of the peer group because we believe that the iron concentrate will be the

most likely ore product for Bushveld Minerals.

Table 8:Table 8:Table 8:Table 8: CompanyCompanyCompanyCompany Peer GroupPeer GroupPeer GroupPeer Group

CompanyCompanyCompanyCompany NNNNameameameame MarketMarketMarketMarket ProjectProjectProjectProject CountryCountryCountryCountry InterestInterestInterestInterest TonneTonneTonneTonnessss Grade %Grade %Grade %Grade %Contained MContained MContained MContained Metaletaletaletal

((((MMMMt)t)t)t)

MktMktMktMkt

CapCapCapCap

EVEVEVEV

US$US$US$US$

EV/tEV/tEV/tEV/t

FeFeFeFeStageStageStageStage

Bushveld MineralsBushveld MineralsBushveld MineralsBushveld Minerals AIM:BMNAIM:BMNAIM:BMNAIM:BMN MokopaneMokopaneMokopaneMokopane RSARSARSARSA 64%64%64%64% 740.0740.0740.0740.0 33.2%33.2%33.2%33.2% 0.4%0.4%0.4%0.4% 10.9%10.9%10.9%10.9% 245.8245.8245.8245.8 2.92.92.92.9 80.480.480.480.4 54.354.354.354.3 52.352.352.352.3 0.290.290.290.29 Scoping DueScoping DueScoping DueScoping Due

Pacific Ore Mining TSX-V: PC Iron - T Canada 100% 14.4 27.3% 0.4% 6.6% 3.9 0.1 1.0 8.5 6.5 1.66 Inf Resource

Forge Resources ASX: FRG Balla Balla Australia 75% 456.0 45.0% 0.6% 13.8% 205.2 2.9 62.9 15.9 7.4 0.05 BFS

Yellow Rock Resources ASX: YRR Gabanintha Australia 100% 125.8 32.3% 60.0% 8.6% 40.6 75.5 10.9 6.5 7.1 0.18 Adv. Explorer

Baobab Resources AIM:BAO Tete Mozambique 85% 665.0 34.0% 0.2% 12.6% 226.1 1.3 83.8 120.9 119.5 0.62 Pre Feasibilty

TNG Limited ASX:TNG Mount Peake Aust ralia 100% 160.0 23.0% 0.3% 5.3% 36.8 0.4 8.5 51.1 43.6 1.18 Pre Feasibilty

Average 36.84 0.74

Source:Source:Source:Source: Fox-Davies

For comparison we also had a look at off-market valuations. On the 11 January 2012, private Company, Mboweni

Brothers Investment Holdings signed a memorandum of understanding to acquire up to 20% in Ferrox Holdings Ltd. for

a consideration of US$32 million. Ferrox has a 74% indirect interest in the Tivani iron ore project in South Africas

Limpopo Province. The Tivani project has a NI 43-101 compliant Fe/Ti/V resource of 470Mt of measured, indicated and

inferred resources and is further advanced than Mokopane, having completed a scoping study and significant

metallurgical test work on the ore. As Ferrox is privately listed it does not have a market capitalisation and the grades of

titanium and vanadium in the resource have not been published, but this deal values Ferrox at US$160M or US$1.45 per

tonne of iron. This is considerably higher than the market average EV for similar early stage projects, which we calculate

at US$0.74/t. Based on this multiple, Mokopane would be worth US$181M. Bushveld has an attributable 64% ownership

valuing its share of the project at US$116.15M.


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Mokopane Tin

We have taken a similar approach and assembled a group of tin explorers to account for the value of the tin asset. The

average EV per tonne of tin for the comparables group is approximately US$268.7/t. Note that all of these companies are

further progressed than Bushveld Minerals in terms of the undertaking of scoping studies to feasibility studies. However,

we do not believe that much work would be required to bring the project into production. We therefore believe that

whilst Mokopane Tin should attract a discount to the average EV of the peer group, we have ascribed a 30% discount tothe EV per tonne of tin metal from its peer group and assigned a value to Bushveld Minerals per tonne of tin metal of

US$188.10 of which would give an indicative value to the asset of US$1.13M.

TableTableTableTable 9999: Tin: Tin: Tin: Tin CCCComparablesomparablesomparablesomparables TTTTableableableable

Company NCompany NCompany NCompany Nameameameame MarketMarketMarketMarket CountryCountryCountryCountry ResourcesResourcesResourcesResources EVEVEVEV EV per tonneEV per tonneEV per tonneEV per tonne

TonnesTonnesTonnesTonnes GradeGradeGradeGrade Sn MetalSn MetalSn MetalSn Metal

((((t)t)t)t) (%)(%)(%)(%) (t)(t)(t)(t) (US$ M)(US$ M)(US$ M)(US$ M) (US$/t(US$/t(US$/t(US$/t))))

MoMoMoMokokokokopane Tin (Bushveld)pane Tin (Bushveld)pane Tin (Bushveld)pane Tin (Bushveld) ---- South AfricaSouth AfricaSouth AfricaSouth Africa 3,993,0003,993,0003,993,0003,993,000 0.15%0.15%0.15%0.15% 5,9905,9905,9905,990 2.02.02.02.0 327.1327.1327.1327.1

Celeste Copper CorporationCeleste Copper CorporationCeleste Copper CorporationCeleste Copper Corporation C CN Equity UK 2,800,000 1.45% 40,600 3.6 89.9Stellar ResourcesStellar ResourcesStellar ResourcesStellar Resources SRZ AU Equity Tasmania 6,280,000 1.14% 71,592 9.1 127.0

Consolidated Tin MinesConsolidated Tin MinesConsolidated Tin MinesConsolidated Tin Mines CSD AU Equity Australia 9,616,600 0.60% 57,700 16.4 284.0

Venture MineralsVenture MineralsVenture MineralsVenture Minerals VMS AU Equity Tasmania 43,000,000 0.40% 120,000 50.7 422.5

Kasbah ResourcesKasbah ResourcesKasbah ResourcesKasbah Resources KAS AU Equity Morocco 15,300,000 0.85% 130,100 54.7 420.2

AvAvAvAverageerageerageerage 26.926.926.926.9 268.7268.7268.7268.7

Source:Source:Source:Source: Fox-Davies

Company Valuation

Using this market-based approach to valuation we have derived a value for the Mokopane iron project of US$116.2M and

a value of US$1.13M for the Mokopane tin project. Including cash this gives a total valuation for Bushveld Minerals of

US$120.31M. At the current exchange rate, this is equivalent to 79.4M or 27.96p per share based on the 283,969,110

shares in issue.

Valuing the Upside

There is upside to both of these projects. In the VTM we see significant opportunity to increase the resources either by

acquisition of neighbouring deposits (see Exploration upside) and to de-risk the project by undertaking on-going

metallurgical, engineering, marketing and infrastructure studies as well as by potentially introducing a strategic partner

that can add value through technology sharing, off-take agreements and capital injection. There is also further upside

from the polymetallic nature of the deposit with there being scope for increased revenues from by-product credits.

The recent deal for Ferrox, shows us the enormous upside potential of Bushveld Minerals if it conducts the appropriate

metallurgical and engineering studies, and progresses the Mokopane iron project through to scoping and feasibility

stage. This can be added to the exploration upside discussed under Exploration Upside which, if the exploration

programme proves to be successful, will also increase the value of the Company. The current valuation should increase to

levels more comparable (per tonne of iron resource) to Baobab which we see as a more direct regional comparable.

We see upside in the Tin project through resource consolidation of nearby brownfield opportunities, which should be

straightforward to process, having low capex and scope for short-to medium term production that is not infrastructure

constrained.

On top of that the management and board have considerable experience and expect additional properties to be added

to the Company.


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Risks

Metallurgy

We see metallurgy as one of the key risks to the Mokopane project. VTM deposits are metallurgically complex and

although the production of an iron concentrate is relatively straight forward, the extraction of vanadium and titanium

from the slag is more complex. The latest test work on the P-Q layer indicates that recoveries of 86.5% for a 54.8% Feproduct grade from the massive magnetite ore, and as much as 63.1% recoveries for a 55.0% Fe product grade from the

disseminated magnetite ore are achievable without the need for fine grinding. However, we do not yet know if the by-

fd bushveld minerals initiation 21st march 2013

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