 [Rufaro Mining & Geological Services (Private) Limited

Business Plan

Mission Statement

 The mission of the company is to become a leader in mining efficiency while attaining and
maintaining high safety standards. The company aims to provide a secure investment avenue
in the mining sector in Zimbabwe. The company aims to maintain a healthy balance between
investor interests and community and environmental requirements.

The Team

 The management team is made up of:

 J. S. Bonde – Chief Executive Officer is a product of one of the big 5 firms of Chartered
Accountants where he was audit manager for large mining companies, for example, Circle
Cement, Wankie Colliery, Rio Tinto Zimbabwe, Zimbabwe Mining Development Corporation
and Chemplex Corporation. As founding director of Rufaro Mining he has been involved in
gold mining since 1992. He is a holder of two accounting and finance degrees from the
University of South Africa.

 E. R. Bonde – Finance and Administration Director is a Chartered Secretary and a Chartered

Management Accountant with an MBA. Prior to founding Rufaro Mining she worked for
several large organizations in finance, accounting and company secretarial positions. These
include Anglo American Corporation, Wankie Colliery, Posts and Telecommunications
Corporation and Colonial Mutual.

 The Mine Manager, Underground Manager, Mine Engineer and Mine Captain will be
appointed from persons holding the requisite qualifications and experience in accordance
with industry norms.

Market Summary

 Market: Until February 2009, all the gold produced in the country was purchased by the
Reserve Bank of Zimbabwe (RBZ), and paid for partly in foreign currency. However, because
of delays by the Bank in meeting its foreign currency payments, it had become impossible to
sustain viability at most mining operations. The current situation is very different. A solution
to the issue has been made policy. The Central Bank will refine all the gold produced, retain
7.5% as tax and issue a certificate of fineness. The RBZ charge for the services then return the
gold to the producer who markets it as they wish. This is a progressive move as producers can
access international market prices. Mining revenues in 2009 were $1 billion, and $700
million upto August 2010. The Company anticipates to develop new markets in Europe, the
Middle East, India and China.

Opportunities

 Problems and opportunities: The current financial crisis and the global recession are affecting
most nations. Some people and institutions may wish to invest in gold as an alternative,

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 secure asset, as a way of diversification of their portfolios. This presents a unique
opportunity for gold producers to satisfy anticipated demand. The usual need of gold, from
those who buy to fulfill customs and traditions, is expected to grow with the growth
experienced in their domestic economies, namely India and the Middle East. Combined, we
expect, this will have a positive impact on gold prices in the short to medium term.

Business Concept

 The company’s strategy is human resources development.

This involves continuous staff training programs, worker participation and recognition. HIV
awareness and counseling programs are a major part of the company’s staff welfare program.
This is in recognition of the environment currently prevailing in the country and is designed to
minimise staff turnover.

Competition

 Gold mining in Zimbabwe has no competition in terms of the product. Competition, within
the industry centers on staff retention. The company strives to develop staff loyalty through
its human resources development programs, mine safety standards as well as provision of
social amenities such as transport, subsidised housing and sport.

Goals & Objectives

 Five-year goals

– The goals of the company are:

– To achieve and maintain an annual growth rate on return on total investment of

35%;

– To achieve a stable and steadily growing dividend pay-out record with a growth rate
of at least 10% per annum;

– To increase the company’s gold production and attain, and maintain a position
amongst the top ten producers in the country.

Financial Plan

 The financials presented will be prepared under the following assumptions:

 A) that the investor’s funds are split into equity buy-in and/or interest bearing loan and that
the loan portion bears interest at 15% per annum. Any loan potion is repaid, in five equal
annual installments, over a period of 5 years;

 B) that current equipment shall be refurbished or replaced and new equipment acquired to
meet anticipated increased production;

 C) Underground development is an ongoing process in order to meet initial milling targets of

110 tons per 22 hour working day in the first two years and 150 tons per day in the third year.

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 The mine is 40km from Harare and is situated on the Great Dyke, a prolific geological
structure visible from space.

 D) the average ore grade is 36 grams per ton at the mine and 20 grams per ton at the mill;

 E) the milling capacity shall be raised to 220 tons per day with reinvestment, a long term goal;

 F) manpower is readily available either within the country or the region;

 G) production will begin six months after disbursement of funds;

 H) the price of gold is maintained at an average of US$1000 per ounce over the forecast
period.

Resource Requirements

 Technology requirements: The Company will require modern technology in all its areas of
operation. This will include mining planning, exploration, mine production, transportation,
reduction and recovery. As financial resources become available these will be acquired
either regionally or internationally.

 Personnel requirements: The Company will require all categories of staff, ie administrative,
technical, skilled, semi-skilled and unskilled. It is anticipated that these will be accessed
relatively easily from within the country and region.

 Resource requirements:

– Financial: The Company requires US$ 2.5 million, to finance capital expansion, mine
development and recurrent expenditure;

– Distribution, promotion and marketing: New markets are easily secured with the
new legal framework where each producer is expected to do their own marketing.
Gold is considered the world over the most secure investment with private
ownership of actual bullion very common for those seeking financial security.

 External requirements

– All equipment, technology, power, fuels and oils, inputs into the mining, transport,
reduction and recovery systems are acquired from outside the company. Although
some are available inside the country, the majority are obtained from outside the
country. Proper management of stock will ensure smooth operations.

 Risks & Rewards

 Risks

– The major risks of the project are:

– A) Price fluctuations – while gold prices are on the upward trend, there could be
changes and prices to go downwards, the company will increase its milling capacity.
The company has a policy of producing more ore than its milling capacity, thus

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 maintaining ore stockpiles, to cater for periods when prices fall. This ensured milling
capacity can, therefore, be increased without increasing mining costs.

– B) Country risk – In the past decade Zimbabwe has had a high country risk because
of its political and financial crises and now the global financial crisis. The Unity
Government ensures political risk will be greatly reduced as transparency and
accountability become part of the national culture. The company expects to
participate in this process by providing opportunities for formal investment,
employment and business activities in general. There was a total revenue of $1
billion made in Zimbabwe in mining for the year 2009. International investors
achieved a return and externalized earnings without incident indicating most of the
risk is perceived.

– C) Labour migration – in the short – term, there is high likelihood of very high labour
turnover within the country as well as the region as people seek better
opportunities, once industries start to operate. With proper human resources
development and retention policies in addition to adequate funding, the company
can compete with the best within the industry.

 Rewards

 As well as dividends, the company expects to pay an interest rate of 15% on any loan portion
of the funding. The company is also offering to repay the loan in five equal installments
beginning at the end of the first 12 months from the date of disbursement. At the end of the
five year period, the owners could exercise the first option to buy back the 49% shareholding
held by the investor at a price to be determined then. At the moment, the owners expect an
annual growth rate of 10%.

 Key Issues

 Near term

– With the political situation in the country showing positive signs towards resolution,
this is the best time to make financial and funding decisions regarding projects
which are operating at low capacity. Government policy is likely remaining favorable
towards such industrial operations as opposed to new projects. This is because the
time likely to be required to put such industries back to full production is expected
to be relatively shorter. Such anticipated favorable operating environment is further
more likely as there is dire need for employment creation in the country. To take full
advantage of this likely outcome, the company finds it necessary to seek funding and
participate fully, in order to optimize likely benefits.

 Long term

– The experience of the past decade has brought to the fore need for the company to
diversify. The board is currently investigating the prospects for regional and global
expansion as well as investment into other minerals, such as diamonds.

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 – It is The Company’s opinion that any postponement in decision making, as regards
diversification, may result in serious losses of opportunities.

Verification: Contact The Mining Commissioner at Kadoma, Zimabwe regarding the Carlton 10
Mine’s registration to Rufaro Mining Pvt Ltd owned by Mr and Mrs Bonde

Email: sybmw@yahoo.com

Mobile: 00 44 77 16 96 49 27

Skype: sybmw ZW

Trust Bank Zim Ltd has a project management facility.