Challenges. Finding suitable local suppliers to assist with community projects and with supplying our operations

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1 Group Group spend on corporate social investment (CSI) and socio-economic development (SED) initiatives amounted to ZAR21.0 million Finding suitable local suppliers to assist with community projects and with supplying our operations Continually uplifting the communities within which we operate Overview of progress at all operations Substantially achieved Moderate progress Not achieved Our focus for 2016 What we achieved Self-assessment Continually uplifting the communities within which we operate Initiatives are ongoing across our operations Positively impacting our communities Pan African Resources strives to minimise potential negative social impacts caused by our mining operations while promoting opportunities for the local communities. We are committed to monitoring, measuring and managing the social and economic impacts created by our operations, in line with our approved Social Labour Plans (SLPs). Our operations engage in a range of development projects and community relations activities, which promote sustainable welfare within the communities. In addition, wherever possible, the group promotes responsible and ethical management of its supply chain by encouraging suppliers to support local economic development. At the mines, management is proactive in building and maintaining stakeholder relationships with the local communities and has forged close working relationships with ward councillors and local leaders. (See stakeholder engagement in the integrated annual report available on the company s website at In terms of the Mineral and Petroleum Resources Development Act (MPRDA), mines are required to develop and implement comprehensive SLPs, human resources development programmes, mine community development plans, a housing and living conditions plan, employment equity plan, and other processes to save jobs and manage downscaling and/or closure. Progress reports are submitted annually to the Department of Mineral Resources. The group is committed to upholding the human rights of all our employees, contractors, suppliers and the communities in which we operate. We recognise people s rights to culture, heritage and tradition through supporting indigenous cultural heritage. Barberton Mines received a heartfelt letter of thanks from a Grade 10 learner (Precious Gwebu) at Emjindini Senior Secondary School, on behalf of all the learners, following the mine s involvement in upgrading the school see page 2 for the letter received from the learner. Pan African Resources sustainable development report

2 Dear Barberton Mines I would like to thank Barberton Mines for the change they brought to our school, they have shown that they believe in our education and that quality education is not only for private schools but for us as well. As I am standing here today, we have a lovely well-equipped computer and a science laboratory that will help us with our studies. On behalf of all the learners of Emjindini, let me thank Barberton Mines for bringing this change into our lives. Today our school has a glimmer of hope now that we have a big computer centre, a beautiful laboratory, a library and other facilities that can uplift the knowledge of each and every pupil who attends the school. We will make sure that we put all these facilities to good use. You can be sure that Emjindini Senior Secondary School is where future doctors, civil engineers and accountants will originate from. We will brighten the future of South Africa, as they say: the youth is the future. Without you our future would be limited but with you our future is bright. We thank you for making our future bigger, better and brighter and lighter. Yours sincerely Precious Gwebu Grade 10D Pan African Resources sustainable development report

3 Barberton Mines The Barberton Mines Transformation Trust (BMTT) hosted its first annual general meeting in October 2015 The Sinqobile Skills Development Centre continued to provide accredited technical training to the local youth For the 2015 academic year, 21 full-time bursaries were offered to local youth, two students successfully completed their qualifications and one of the students was appointed as a Junior Surveyor at Fairview Mine In the 2016 academic year, five new full-time bursaries were offered to the local youth A better working relationship with the local (Emjindini) tribal authority following the handover of the furnished tribal offices was fostered Continued to supply clean water to Umjindi Municipality for consumption purposes during the drought in 2016 Awaiting resolution on the allocation of land for the construction of Cathyville Clinic Fractured engagement with various stakeholders in respect of SED issues has negatively impacted implementation of Barberton s SED programme Local contractors are not fully equipped and lack technical skills to perform to required standards a mentorship programme is to be implemented to assist contractors Overview Barberton Mines is a primary employer in an area with unemployment of approximately 26.9% (source: Umjindi Local Municipality 2015/16 IDP page 63). Barberton Mines has a representative at the municipal Independent Development Plan forum, where possible SED projects are discussed and endorsed for support by the mine. Barberton Mines then selects appropriate projects within the community, in close consultation with the community and all selected projects are registered with the Ward Independent Development Plan of the Umjindi Local Municipality. During the year under review, a total of ZAR17.2 million was spent on community initiatives (2015: ZAR18.4 million). The table on page 4 includes some of Barberton Mines key CSI and SED projects and the amount invested. Planning a technical contractors workshop targeting 10 local contractors to better equip them in various technical and business skills Commencing with the construction of two clinics to benefit local contractors and the community Completing the Sheba Siding Multipurpose Centre Constructing a permanent water pipeline for water supply from Fairview Mine to Sinqobile Township, mainly to supply water for consumption to the Sinqobile/Verulam community in Umjindi Bursaries During the year Barberton Mines sponsored 24 full-time bursaries amounting to ZAR2.1 million in the fields of geology, mining engineering, mechanical engineering, BSc Actuarial Science, BCom Economics and mine surveying. These bursaries include the full tuition fee, accommodation, monthly stipend, prescribed textbooks and required vacation/experiential learning. The table on page 4 shows the number of students enrolled in various courses and the number of students who will be completing their studies at the end of Pan African Resources sustainable development report

4 Bursaries Number of students Field of study Continued New Number of students completing studies at end of 2016 National Diploma Mineral Surveying BEng Mechanical Engineering BEng Mining Engineering BEng Electrical Engineering BSc Geology BSc Actuarial Science BCom Economics Total Barberton Mines community projects Project Project inception Description Spend on project since inception Emjindini Secondary School Sinqobile Life Skills Development Centre Sheba Siding Multipurpose Centre 2013 Phase /16 financial year Built a multimedia block which includes a computer centre and a school library School fence (which was an urgent security measure, to minimise risks) Phase 4/exit phase 2016/17 financial year Construction of a school kitchen with a dining hall Construction of a car shelter Renovation of nine classrooms and one ablution block Expansion of the administration block /16 financial year Offered free accredited training in arc welding (20 learners) and sewing (20 learners) Kuhlekwethu Sewing Cooperative continues to supply workwear suits to Barberton Mines Umjindi Welding Primary Cooperative continues to supply local hardware stores with steel window frames 2015 Phase /16 financial year Phase 1 construction of a preschool 80% complete Created 24 temporary jobs Phase /17 financial year Construction of home-based care and drop-in centre offices with kitchen facilities commenced in July 2016 ZAR9.2 million (funding excludes the exit phase funds) ZAR15.7 million ZAR3.2 million Pan African Resources sustainable development report

5 Evander Mines Formed a Procurement Forum with small businesses Established engagement forums with traditional leaders Visit by the Parliamentary Portfolio Committee on Mineral Resources to view the Winkelhaak Cemetery (938 unnamed deceased) Visit by the MEC for Health to address employees and community members during the wellness day held at Evander Sports Grounds Tracing names of the deceased at the Winkelhaak Cemetery Concluding the terms of reference for land made available by the company for the municipality to construct houses Providing small business support to the bakery in embalenhle Providing support for animal and crop farming to the Sakhisizwe communal property association as part of our SLP commitments Overview A total of ZAR3.6 million (2015: ZAR2.3 million) was spent on CSI and SED initiatives during the year under review. Representatives of the mine attend monthly and quarterly human settlement and local economic development meetings of the local Govan Mbeki Municipality. Evander Mines undertook several projects that support the implementation of the local Integrated Development Plans, including those set out below. Building additional 45 family units for employees Completed the final renovation phase of converting the old hostel block at Winkelhaak into a school, which now accommodates about 600 children Completed and handed over a bakery to beneficiaries in the embalenhle Township. Commemorating the deceased mineworkers of the Kinross Mine disaster In 2015, the DMR established a stakeholder task team consisting of Pan African Resources management and NUM to implement an action plan on the commemoration of the former mineworkers in the Winkelhaak community. During 2016, the cemetery wall has been built at a cost of ZAR1.3 million at the demarcated site, with the aim of erecting a remembrance wall and tombstones for each identified former mineworker. Names of 10 graves have been traced and the tracing has now been handed to the South African Police Services to trace the former mineworkers and their families, which is proving to be challenging due to difficulties in tracing records of the deceased mineworkers. An opening ceremony was held on 16 September 2016, which was commemorated with the 20th Anniversary of the Kinross Disaster with all relevant stakeholders. Cemetery wall with tombstones of the deceased mineworkers Pan African Resources sustainable development report

6 Phoenix Platinum Repaired the fence of the Modderspruit community park Conducted internal repairs to the Segwaelane Clinic following a storm in February 2016 Refurbished a community hall in Majakaneng Ward 7 Deciding on the most appropriate community project in Majakaneng Focusing on the partial refurbishment of the Modderspruit community hall Overview Caring for the local community is part of Phoenix Platinum s DNA and during the year under review ZAR62,790 was spent on CSI initiatives that involved the community. One such initiative included the clearing of bushes and grass around the operation to comply with health and safety. This was contracted to Babelo Trading 1 from Modderspruit community, which is 100% black female-owned. In addition, waste management services are contracted to Mbanjwa and Monyai Transport and Projects from Modderspruit community, which is 100% black owned. Where feasible, Phoenix Platinum sources its products and services from local suppliers unless the requirement is for specialised mining products or services. An example of services procured is the local contractor employed to cut the grass at Phoenix Platinum. Uitkomst Colliery Uitkomst community houses completed Difficulty in contracting local suppliers to supply capital goods at Uitkomst Focus on the community development not always enriching individuals within the community Implementing the new SLP Engaging all stakeholders within Uitkomst Mine Pan African Resources sustainable development report