Memorandum of Agreement

EXHIBIT

4.126

Execution Version

Memorandum of Agreement

Made and entered into between:-

CROWN GOLD RECOVERIES (PROPRIETARY) LIMITED

(Reg No 1988/005115/07)

(a company duly incorporated in accordance with the company laws of the Republic of
South Africa with limited liability, herein represented by Xxxxxx Xxxxx, in his
capacity as a director thereof, he being duly authorised hereto under and by virtue of a
resolution of the board of directors of the company passed at Johannesburg on the
15

day of August 2008, and a certified copy whereof is annexed hereto marked "A");

of the first part;

and

EAST RAND PROPRIETARY MINES LIMITED

Page 2

(Reg No 1893/000773/06)

day of August 2008, and a certified copy whereof is annexed hereto marked "B");

of the second part;

and

ELSBURG GOLD MINING JOINT VENTURE

(a joint venture comprising those entities more fully referred to hereafter and herein
represented by Diederik Xxxxxx Xxxxxx van der Xxxx and Xxxxxx Xxxxxxxxx, they being
duly authorised hereto as will appear from a resolution of the executive committee
thereof annexed hereto marked "C");

of the third part;

and

ERGO MINING (PROPRIETARY) LIMITED

(Reg No 2007/004886/07)

(a company duly incorporated in accordance with the company laws of the Republic of
South Africa with limited liability, herein represented by Xxxxx Xxxxxx Xxxxxxx, in his
capacity as a director thereof, he being duly authorised hereto under and by virtue of a
resolution of the board of directors of the company passed at Johannesburg on the
15

day of August 2008, and a certified copy whereof is annexed hereto marked "D");

of the fourth part;

and

Page 3

(Reg No 2007/017509/07)

(a company duly incorporated in accordance with the company laws of the Republic of
South Africa with limited liability, herein represented by Diederik Xxxxxx Xxxxxx van der
Xxxx, in his capacity as a director thereof, he being duly authorised hereto under and
by virtue of a resolution of the board of directors of the company passed at
Johannesburg on the 15

day of August 2008, and a certified copy whereof is annexed

hereto marked "E");

of the fifth part;

and

MOGALE GOLD (PROPRIETARY) LIMITED

(Reg No 1996/010274/07)

of the sixth part.

Definitions

1.1

In this agreement, unless inconsistent with the context, the following terms

and/or expressions shall have the separate meanings assigned to them

hereunder and for purposes of convenience the said definitions are reflected

throughout this agreement in capitals:-

Page 4

1.1.1

“ANCILLARY

AGREEMENTS”

shall mean the interlinking agreements

more fully described in the schedule

thereof annexed hereto and marked

“G”;

1.1.2

“ANGLOGOLD”

shall mean AngloGold Xxxxxxx Limited

(Reg No 1944/017354/06);

1.1.3

“ANGLOGOLD

AGREEMENT”

shall mean the Memorandum of

Agreement made and entered into by

and between ANGLOGOLD, ERGO

MINING, DRD SA and MINTAILS SA at

Johannesburg on the 6 August 2007

and shall be deemed to include the

various addenda thereto respectively

dated the 17 August 2007, 30 August

2007, 21 November 2007, 28 February

2008 and 15 May 2008 relating to the

sale and purchase respectively of the

ERGO MINING ASSETS, upon the

terms and conditions therein set forth;

1.1.4

“BRAKPAN CIL 1

shall collectively mean the gold circuit

PLANT”

plant [initially acquired by HVH from

ANGLOGOLD in terms of the HVH

Page 5

AGREEMENT and subsequently sold:-

•

by HVH to MOGALE; thereafter

•

by MOGALE to ERGO URANIUM

and refurbished by the latter;

thereafter

•

by ERGO URANIUM to ERGO

MINING (with effect from the 31

July 2008)]

and being those items marked in purple

and blue (and identified by the yellow

block printed pointers) in Annexe “H”

hereto and constituting the following:-

•

electrical power factor correction

•

flotation building;

•

fitting/electrical workshop;

•

desanding building;

•

a d mi n b ui ld in g ;

•

R.W .B. Reservoir;

•

tailings thickener No 2;

•

tailings thickener No 4;

Page 6

•

elution building;

•

tank farm;

•

residue area ;

•

piping workshop;

•

plating workshop;

•

fitting workshop;

•

tailings pump house;

•

hot and cold sumps;

•

rigging workshop;

•

medical c entre;

•

clear water reservoir;

•

change hous e ;

•

plant stores ;

•

Sallies return; and

•

settling ponds

and in no way derogating therefrom

including whatever RIGHTS and/or

SERVITUDES are applicable thereto,

inter alia

, the rights of ingress to and

egress from such plant and/or line

and/or pipeline rights and/or other

infrastructural services, the weigh

bridge and pipe yard to the exclusion,

however, of the BRAKPAN CIL 2

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PLANT;

shall collectively mean the gold circuit

plant and the infrastructure therefor

[initially acquired by HVH from

ANGLOGOLD in terms of the HVH

AGREEMENT and subsequently sold:-

•

by HVH to MOGALE; thereafter

•

by MOGALE to ERGO URANIUM;

thereafter

•

by ERGO URANIUM to ERGO

MINING ” state (with effect from

the 31 July 2008)]

and being xxxx e items which are

uncoloured on the whole of the plan

annexed hereto and marked “H”

including whatever RIGHTS and/or

SERVITUDES are applicable thereto,

inter alia

, the rights of ingress to and

egress from such plant and/or line

and/or pipeline rights and/or other

infrastructural services to the exclusion,

1.1.5

“BRAKPAN CIL 2
PLANT”

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however, of the BRAKPAN CIL 1

PLANT ;

1.1.6

”BRAKPAN PLANTS”

shall collectively mean the BRAKPAN

CIL 1 PLANT, the BRAKPAN CIL 2

PLANT and such additional

infrastructure therefor and which

comprises the whole of the plan which

constitutes Annexe “H” hereto and on

the basis that should any dispute arise

as to what comprises the aforesaid

plants, then and in such event the

provisions of clause 13 infra shall be and

become applicable;

1.1.7

“BUSINESS”

shall mean, in relation to:-

•

the ELSBURG JV, the business of

mining, recovery, treatment and

processing of gold from the gold

bearing tailings situate on the

ELSBURG DUMPS; or

•
•
•
•

ERGO MINING, the business of

recovery, treatment and processing

of the MATERIAL from the POST

Page 9

CONSOLIDATION EVENT

RESOURCES , in the event of the

exercise of the CONSOLIDATION

EVENT,

as the case may be;

1.1.8

“CLOSING DATE”

shall mean the date of the fulfilment or

waiver, as the case may be, of the

condition precedent in clause 3 infra and

shall at latest be 7 (seven) business

days thereafter;

1.1.9

“CONSOLIDATED

shall collectively mean the ERGO

ASSETS”

MINING ASSETS and the ER P M

ASSETS;

1.1.10 “CONSOLIDATION

EVENT”

shall mean the written notification by

ERGO MINING to CROWN and ERGO

URANIUM to be delivered within a

period of 6 (six) months after the

conclusion of the FEASIBILITY STUDY

or the 30 June 2009, whichever shall be

the earlier, that ERGO MINING has

elected to pursue the

CONSOLIDATION PROCESS and

Page 10

upon the rec ei pt of which notic e

CROWN, ERGO MINING and ERGO

URANIUM respectively shall be

obligated to participate in such process

and to collectively contribute thereto the

POST CONSOLIDAT ION EVENT

RESOURCES;

shall mean the actual commitment by:-

•

CROWN of the CROWN

RESOURCE;

•

ERGO MINING of the ELSBURG

JV RESOURCE , the ERGO

MINING RESOURCE and the

ORPHAN DUMPS; and

•

ERGO URANIUM of the PAMODZI

RESOURCE

and the consolidation thereof, that is the

POST CONSOLIDAT ION EVENT

RESOURCES so as to facilitate the

establishment by ERGO MINING of an

economically viable enterprise for the

recovery, treatment and processing of

the MATERIAL on the basis that the

1.1.11

“CONSOLIDATION

PROCESS”

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ec onomic benef its to be derived

therefrom will redound to the exclusive

benefit of ERGO MINING, less the

COSTS occasioned thereby;

1.1.12 “COST/COSTS”

shall mean and include all overheads,

salaries, wages, accommodation,

transportation, costs of leasing ,

management, marketing, professional

services, risk obligations and any other

costs relating to the mining operations

conducted, pursuant to the MINING

USER CONTRACT , and the

rehabilitation of the relevant footprints in

respect thereof and such costs shall be

exclusive of any Value Added Tax in

terms of the VAT ACT unless stated to

the contrary;

1.1.13 “CROWN”

shall mean Crown Gold Recoveries

(Proprietary) Limited (a wholly owned

subsidiary of DRD SA) and shall be

deemed to include its successors in title

or permitted assigns;

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1.1.14 ”CROWN RESOURCE”

shall, to the exclusion of what is

generally known and described as the

CROWN “

Life of Mine

” (as more fully

identified in Annexe “I(1)” hereto),

mean the resource identified in Annexe

“I(2)” hereto and the use of the line

rights and/or pipeline rights and/or other

supply rights and whether pursuant to

extant SERVITUDES or new

SERVITUDES to be registered, and as

more fully identified in Annexe “I(3)”

hereto;

1.1.15 “CROWN GOLD

CIRCUIT”

shall, if the CONSOLIDATION EVENT

is not timeously triggered, mean a gold

circuit which CROWN will establish to

treat MATERIAL from the CROWN

RESOURCE for gold, on the basis that

the economic benefits to be derived

therefrom, less all COSTS occasioned

thereby, shall redound to the exclusive

benefit of CROWN;

1.1.16

“DME”

shall mean the Department of Minerals

Page 00

Xxxxxxxx xx Xxxxx Xxxxxx;

1.1.17 “DRD SA”

shall mean DRDGold South African

Operations (Proprietary) Limited (Reg

No 2005/033662/07), a c ompany

controlled by DRDGold Limited, a public

company listed on the JSE Limited

Securities Exchange;

1.1.18 “EFFECTIVE DATE”

shall mean the 23 November 2007

notwithstanding the SIGNATURE

DATE;

1.1.19 “ELSBURG DUMPS”

shall mean approximately 187 (one

hundred and eighty seven) million

tonnes of tailings or residue referred to

as the “

Elsburg Dumps

”, the ownership

whereof, including the land upon which

same are situated, vests in ERPM;

1.1.20

“ELSBURG JV”

shall mean the joint venture established

between the following entities whose

proportionate partnership interests in

such joint venture were as at the

EFFECTIVE DATE, are as at the

SIGNATURE DATE and will be as at

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the CLOSING DATE as follows:-

1.1.20.1

MOGALE - 50% (fifty per

centum) thereof; and

1.1.20.2 ERPM -50% (fiftyper

centum) thereof;

1.1.21

“ELSBURG JV

RESOURCE”

shall mean the residue of the

ELSBURG DUMPS after the extraction

therefrom of gold by the BRAKPAN CIL

1 PLANT and which residue shall be

dumped onto the Brakpan Tailings Dam

pending the activation of the

CONSOLIDATION PROCESS when

such resource shall constitute part and

parcel of the POST CONSOLIDATION

EVENT RESOURCES;

1.1.22 “EMP”

shall mean the Environmental

Management Programme pertaining to

the ELSBURG DUMPS and as

approved by the DME;

1.1.23 “ENVIRONMENT”

shall mean the environment, including

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1.1.24 “ENVIRONMENTAL

LEGISLATION”

water, ground water, land surface, soil,

subsurface strata and plant and animal

life and furthermore, without limitation,

the meaning ascribed to that term in the

National Environmental Management

Act, No 109 of 1998, as amended;

shall mean all applicable South African

laws including, without limitation, the

National Environmental Management

Act, No 109 of 1998, as amended, as

referred to in clause 1.1.23 supra,

common law, statutes, codes, directives

and the like, and all rules, regulations,

orders or statutory guidance directives

made thereunder, concerning the

ENVIRONMENT;

1.1.25

“ERGO MINING”

shall mean Ergo Mining (Proprietary)

Limited (and shall be deemed to include

its successors in title or permitted

assigns), the authorised share capital

whereof is R1 000,00 (one thousand

rand) divided into 1 000 (one thousand)

ordinary par value shares of R1 ,00 (one

rand) each and the issued share capital

Page 16

whereof:-

1.1.25.1 was as at the EFFECTIVE

DATE and is as at the

SIGNATURE DATE ,

R300,00 (three hundred

rand) divided into 300 (three

hundred) ordinary par value

shares of R1,00 (one rand)

each and the registered

and/or beneficial owners

whereof were and are as at

such dates as follows:-

•
•
•
•

DRD SA as nominee for

CROWN - 150 (one

hundred and fifty)

shares; and

•

MinTails Gold and

Uraniu m Li mi xxx of

Mauritius as nominee

for ERGO URANIUM -

150 (one hundred and

fifty) shares;

Page 17

1.1.25.2 as at the CLOSING DATE

will be R600,00 (six hundred

rand) divided into 600 (six

hundred) ordinary par value

shares of R1,00 (one rand)

each, the registered and/or

beneficial owners whereof

will be as follows:-

•
•
•
•

CROWN - 300 (three

hundred) shares; and

•
•
•
•

ERGO URANIUM

- 300 (three hundred)

shares;

1.1.26 “ERGO MINING

ASSETS”

shall mean the BRAKPAN PLANTS,

beneficial ownership whereof vested in

ERGO MINING (subject to the reserved

rights of ANGLOGOLD in terms of the

ANGLOGOLD AGREEMENT) with

effect from the 31 July 2008

notwithstanding that ERGO MINING

had the usage thereof with effect from

the EFFECTIVE DATE and which

assets are more fully identified in a

Page 18

schedule thereof annexed hereto and

marked “J”;

1.1.27 “ERGO MINING

RESOURCE”

shall collectively mean the “Benoni

Cluster

” and the “

Ergo Dumps

” as more

fully defined in clauses 1.1.4 (as read

with Annexe “E”) and 1.1.6 (as read

with Annexe “E”) of the ANGLOGOLD

AGREEMENT and which definitions

shall be deemed incorporated herein;

1.1.28 “ERGO URANIUM”

shall mean Ergo Uranium (Proprietary)

Limited (Reg No 2007/017509/07), a

company indirectly controlled by

MINTAILS AUS;

1.1.29 “ERGO URANIUM

GOLD CIRCUIT”

shall, if the CONSOLIDATION EVENT

is not timeously triggered, mean a gold

circuit which ERGO URANIUM may

establish to treat the MATERIAL from

the ERGO MINING RESOURCE, the

PAMODZI RESOURCE and the

ORPHAN DUMPS for gold, on the basis

that the economic benefits to be derived

therefrom, less all COSTS occasioned

thereby, shall redound to the exclusive

Page 19

benefit of ERGO URANIUM;

1.1.30 “ERPM”

shall mean East Rand Proprietary

Mines Limited (a wholly owned

subsidiary of DRD SA) and shall be

deemed to include its successors in

title;

1.1.31 “ERPM ASSETS”

shall mean what is generally known and

des c ribed as the E xx xxxx Mi ning

Tailings and the infrastructure therefor,

collectively comprising:-

1.1.31.1

the ELSBURG DUMPS;

1.1.31.2

the old order used mining

RIGHTS attaching thereto;

and

1.1.31.3

the ERPM rights to pump,

subject to regulatory

constraints, subterranean

water on the basis that the

receiving party will assume

the obligation for payment of

a proportionate share of the

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COSTS associated there-

with,

1.1.32 “ERPM JOINT

VENTURE
PARTICIPATION”

to the exclusion of the ‘

Xxxxx Tailings

’,

the latter being part of the remainder of

CROWN’s existing “

Life of Mine

”;

shall mean the joint venture interest of

50% (fifty per centum) in the ELSBURG

JV to be allocated to ERPM as more

fully referred to hereafter, inter alia, in

consideration for the conclusion by

ERPM of the MININGUSER

CONTRACT;

1.1.33 “FEASIBILITY STUDY”

shall mean the study to be undertaken

by ERGO MINING (in consultation with

CROWN, the ELSBURG JV and ERGO

URANIUM ) and at its COST t o

determine whether the

CONSOLIDATION PROCESS will be

economically viable and in the interests

of CROWN, the ELSBURG JV, ERGO

MINING and ERGO URANIUM and

which, if positive, will entitle ERGO

MINING

Page 21

CONSOLIDATION EVENT;

1.1.34

“HVH”

shall mean HVH Gold (Proprietary)

Limited, an indirect subsidiary of

MINTAILS SA;

1.1.35 “HVH AGREEMENT”

shall mean the memorandum of

agreement entered into by and between

ANGLGOLD, HVH and Skeat Gold

Mining Limited at Johannesburg on the

20 November 2006 relating to the sale

and purchase respecti vely of the

BRAKPAN PLANTS and shall be

deemed to include the first addendum

thereto dated the 9 May 2007;

1.1.36 “KEY INDIVIDUALS”

shall mean members of the senior

management and/or those persons

occupying key positions at CROWN

and/or ERGO MINING and/or ERPM

and who may be seconded from time to

time by such companies to:-

•

the ELSBURG JV for the conduct

of its BUSINESS; or

•

ERGO MINING for the conduct of

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its BUSINESS , that is the

operations of the CONSOLIDA-

TION PROCESS , if the

CONSOLIDATION EVENT is

triggered,

and on the basis that such individuals

will remain employed by the company in

question but whose remuneration

package shall nevertheless be paid by

the ELSBURG JV or ERGO MINING,

as the case may be;

1.1.37

“LAND”

shall mean the freehold land upon

which the ELSBURG DUMPS are

situated and as delineated in green on

the plan annexed hereto marked

“K”, the relevant lot numbers being

more fully described in the table therein

contained (the area delineated in pink is

an area upon which the ELSBURG

DUMPS are also situated, same

however being the property of the

Ekhurhuleni Council);

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1.1.38 “LEASE”

shall mean the agreement of lease to

be entered into by and between ERPM

as the lessor and the ELSBURG JV as

the lessee of the LAND upon which the

dumps are situated so as to enable the

ELSBURG JV to mine, recover, treat

and process the gold bearing ore on the

ELSBURG DUMPS in terms of PHASE

1 , and on the salient terms and

conditions more fully set forth in the

schedule annexed hereto and marked

“L”;

1.1.39

“MATERIAL”

shall collectively mean the ore bearing

material bearing gold and other

MINERALS;

1.1.40 “MHSA”

shall mean the Mines Health and Safety

Act, No 29 of 1996;

1.1.41

“MINERALS”

shall, after the completion of each run of

PHASE 1, mean:-

1.1.41.1 any gold; and

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metals bearing ore or other

materials, inter alia , uranium

and sulphuric acid to be

mined, recovered and

processed by ERGO

MINING from the ELSBURG

JV RESOURCE and if the

CONSOLIDATION

PROCESS is activated, then

from the POST

CONSOLIDATION EVENT

RESOURCES

1.1.42 “MINING USER

CONTRACT”

shall mean this agreement [governing,

inter alia, the mini ng, recovery,

treatment and processing of:-

• gold from the ore extracted from the

ELSBURG DUMPS by the

ELSBURG JV; and

•      MINERALS from the POST

       CONSOLIDATION EVENT

        RESOURCES in the event of the

        activation of the CONSOLIDATION

        PROCESS,

as the case may be] and shall be

deemed to include all annexes thereto

which shall be initialled or signed, as

the case may be, by the PARTIES for

purposes of identification;

1.1.43

“MINTAILS AUS”

shall mean Mintails Limited of Australia,

a public company, the shares whereof

are listed on the Australian Stock

Exchange;

1.1.44

“MINTAILS SA”

shall mean MinTails SA (Proprietary)

Limited (Reg No 2004/007547/07), a

company indirectly controlled by

MINTAILS AUS;

1.1.45 “MOGALE”

shall mean Mogale Gold (Proprietary)

Limited (a wholly owned subsidiary of

MINTAILS SA and in the course of

being restructured to facilitate the entry

of a Black Economic Empowerment

shareholder) and shall be deemed to

include its successors in title;

1.1.46 “MPRDA”

shall mean the Mineral and Petroleum

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2002, as amended;

1.1.47 “ORPHAN DUMPS”

shall mean the mine tailings dumps in

respect whereof the RIGHTS to mine

have been applied for by ERGO

MINING and which are situate upon

land either in close proximity to the

BRAKPAN PLANTS or in other areas

where the mining RIGHTS attaching

thereto have lapsed for whatever

reason;

1.1.48 “PAMODZI

RESOURCE”

shall mean what is generally known and

described as the Grootvlei Dumps

which ERGO URANIUM is currently

negotiating to acquire from Pamodzi

Gold Limited and as more fully identified

in a schedule thereof annexed hereto

and marked “M”

;

1.1.49 “PARTICIPANTS”

shall, if the CONSOLIDATION EVENT

is timeously triggered, mean:-
•
•

•

CROWN in respect of the CROWN

RESOURCE;

ERGO MINING in respect of the

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ELSBURG JV RESOURCE, the

ERGO MINING RESOURCE and

the ORPHAN DUMPS; and

•

ERGO URANIUM in respect of the

PAMODZI RESOURCE;

1.1.50 “PARTIES”

shall mean all six parties to the MINING

USER CONTRACT;

1.1.51 “PHASE 1”

shall mean each and every extraction of

gold bearing ore from the ELSBURG

DUMPS (which for the purposes hereof

shall be deemed to include what is

generally known and described as the

Benoni Dumps) and the treatment and

processing thereof by the ELSBURG

JV and the subsequent realisation of

the gold by the ELSBURG JV as agent

for and on behalf of ERPM and on the

basis that the net proceeds thereof shall

redound to the exclusive benefit of the

ELSBURG JV and paid to it on a

quarterly basis and whereafter the

ELSBURG JV RESOURCE shall be

dumped onto the Brakpan Tailings Dam

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pending the activation of PHASE 2;

1.1.52

“PHASE 2”

shall, following the completion of each

gold bearing ore run of PHASE 1, mean

the extraction of the MINERALS from

the POST CONSOLIDATION EVENT

RESOURCES in the event of the

CONSOLIDATION EVE NT being

triggered and on the basis that the

ec onomic benef its to be derived

therefrom, less the COSTS occasioned

thereby, shall redound to the exclusive

benefit of ERGO MINING;

1.1.53

“POST

CONSOLIDATION
EVENT RESOURCES”

shall collectively mean the ELSBURG

JV RESOURCE and the PRE-

CONSOLIDATION EVENT

RESOURCES;

1.1.54

“PRE

CONSOLIDATION
EVENT RESOURCES”

shall collectively mean the CROWN

RESOURCE, the ERGO MINING

RESOURCE , the PAMODZI

RESOURCE and the ORPHAN

DUMPS;

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1.1.55

“RIGHTS”

shall mean all the mining and ancillary
rights whic h may be operative in

respect of one, more or all of the

CONSOLIDATED ASSETS and/or the

ELSBURG JV and/or ERPM and/or

ERGO MINING as granted by the DME

and/or its predecessor from time to time

and in no way derogating therefrom

shall, in the event of the

CONSOLIDATION EVENT being

triggered, include CROWN and/or the

CROWN RESOURCE and/or ERGO

MINING and/or the ERGO MINING

RESOURCE and/or the ELSBURG JV

RESOURCE and/or the ORPH AN

DUMPS and/or ERGO URANIUM

and/or the PAMODZI RESOURCE and

in no way derogating from the

aforegoing shall, in relation to ERPM,

include the Surface Right permits more

fully reflected on the plan and schedule

annexed hereto marked “N”

;

1.1.56 “SERVICE LEVEL

shall mean the stand-alone service level

AGREEMENT/S”

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between:-

• the ELSBURG JV of the one part

and one or more of CROWN,

ERGO MINING or ERPM of the

other part; and/or

• ERGO MINING of the one part and

one or mo re of CROW N, the

ELSBURG JV or ERGO URANIUM

or ERPM of the other part,

and relating to the supply of those

services more fully identified in Annexe

“O” hereto, to facilitate the conduct by

the ELSBURG JV of its BUSINESS and

by ERGO MINING of its BUSINESS and

the COSTS applicable thereto shall be

borne and paid by one or more of the

PARTICIPANTS as set forth in such

schedule;

1.1.57

“SERVITUDES”

shall mean all and/or any notarial deeds

of servitude or cession of existing

servitudes or surface right permits, as

the case may be, to be executed and

registered (where applicable) by any

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one or more of the PARTIES in favour

of the other/s of them in perpetuity and

whether such servitudes or surface right

permits are for any one or more or all of

the following:-

1.1.57.

the ri ght of way f or

road and/or railway line

purposes;

1.1.57.2 the conveyanc e of mine

water and/or slurry

pipelines;

1.1.57.3 overhead or underground

electrical cables for the

transmission of electricity;

1.1.57.4

the laying of pipelines for

any justifiable mining; and

1.1.57.5

tailings pipelines and/or

pump stations;

and such other servitudes or permits as

may be necessary in order to facilitate

the conduct of the BUSI NESSES

Page 32

1.1.60 “VAT ACT”

shall mean the Value Added Tax Act, No

contemplated by the MINING USER

CONTRACT and all of which, once

granted, shall be operative in perpetuity

and whether same are effected by way

of cession of existing servitudes or

pursuant to new servitudes following on

the appropriate surveys and the

preparation and registration of the

relevant surveyor diagrams;

1.1.58 “SIGNATURE DATE”

shall mean the date of signature of the

MINING USER CONTRACT by the

PARTY last signing same;

1.1.59 “TERM SHEET”

shall mean the Term Sheet entered into

on or about the 23 November 2007 by

and between CROWN, DRD SA; ERPM,

ERGO MINING, ERGO URANIUM,

HVH, MINTAILS AUS, MINTAILS SA

and MOGALE and relating to a joint

venture between DRD SA of the

Republic of South Africa and MINTAILS

AUS and/or their respective subsidiaries;

Page 33

construed as limiting the meaning of the general wording preceding it and the

89 of 1991, as amended.

1...2

Words importing:-

1.2.1

the singular shall include the plural and vice versa;

1.2.2

any one gender shall include the others;

1 .2.3

persons shall, where the context admits, include firms or

corporations.

1..3

Where figures are referred to in numerals and words, then the latter shall

prevail in the event of any dispute.

1.4

Any reference to a statute, regulation or other legislation shall be a reference to

such statute, regulation or other legislation as at the date of signature of these

presents and as amended or substituted from time to time.

1..5

When any number of days is prescribed in the MINING USER CONTRACT,

same shall be reckoned exclusively of the first and inclusively of the last day

unless the last day falls on a Saturday, Sunday or public holiday in the

Republic of South Africa, in which case the last day shall be the next

succeeding day which is not a Saturday, Sunday or public holiday.

1.6

The use of the word “

including

” followed by a specific example/s shall not be

Page 34

eiusdem generis rule shall not be applied in the interpretation of such general

wording or such specific example/s.

1..7

Where any term is defined within a particular clause other than as set forth in

this clause 1, then that term shall bear the meaning ascribed to it in that clause

wherever it is used in the MINING USER CONTRACT.

1.8

The terms of the MINING USER CONTRACT having been negotiated, the

contra pro ferentem

rule shall not be applied in the interpretation thereof.

1.9

Any term which refers to a South African legal concept or process (in no way

derogating from the generality thereof, for example “

winding-up

” or

“

curatorship

”) shall be deemed to include a reference to the equivalent or

analogous concept or process in any other jurisdiction in which the MINING

USER CONTRACT may apply or to the laws of which any party cited

hereunder may be or become subject.

Recordal

It is recorded that:-

2.1

DRD SA and MINTAILS AUS, acting through their respective subsidiaries,

have agreed, pursuant to the TERM SHEET, to establish a large uranium, gold

and other minerals, mining, recovery, treatment and processing business;

Page 35

respect of the BRAKPAN PLANTS with effect from the 31 July

2.2

to this end the MINING USER CONTRACT and the ANCILLAY

AGREEMENTS are to be concluded between DRD SA and/or any one or more

of its subsidiaries on the one hand and MINTAILS AUS and/or any one or

more of its subsidiaries on the other hand;

2.3

as an integral part of the aforegoing:-

2.3.1

DRD SA and MINTAILS SA have caused to be established a

special purpose vehicle, namely ERGO MINING (with its

shareholders as CROWN and ERGO URANIUM) on the one hand

and a joint venture, namely the ELSBURG JV (with its joint

venturers as ERPM and MOGALE) on the other hand;

2.3.2

the ERPM ASSETS are owned by ERPM and it has agreed:-

2.3.2.1

to grant the ELSBURG JV the right to use the same;

and

2.3.2.2

to l eas e the LAND upon which the E LS BU R G

DUMPS are situated to the ELSBURG JV in terms of

the LEASE,

for the duration of the MINING USER CONTRACT and for the

purposes therein set forth;

2.3.3

ERGO MINING has acquired the ERGO MINING ASSETS (in

Page 36

extract the gold content therefrom and on the

2008 albeit that it had the usage thereof from the EFFECTIVE

DATE) and is the owner of the ERGO MINING RESOURCE and it

has agreed to lease to the ELSBURG JV:-

2.3.3.1

the BRAKPAN CIL 1 PLANT; and

2.3.3.2

those movables which constitute an integral part of the

ERGO MINING ASSETS and as more fully identified

in a schedule thereof annexed hereto and marked

“P”,

for the duration and for the purposes of this agreement;

2.3.4

ERPM and ERGO MINING have accordingly agreed that the

CONSOLIDATED ASSETS are used by the ELSBURG JV to

mine, recover, treat and process the ELSBURG DUMPS on a

basis whereby:-

2.3.4.1

the CONSOLIDATED ASSETS will remain the

property of ERPM or ERGO MINING, as the case may

be;

2.3.4.2

the ELSBURG DUMPS will be mined, treated and

processed in two phases as follows:-

•

PHASE 1 : by the ELSBURG JV in order to

Page 37

basis that economic benefits to be derived

therefrom will redound to the exclusive benefit

of ELSBURG JV where as the COSTS

attributable thereto shall be borne and paid by

the ELSBURG JV; and thereafter

•

PHASE 2 : by ERGO MINING for the

extraction of the MINERALS from the POST

CONSOLIDATION EVENT RESOURCES in

the event of the CONSOLIDATION EVENT

being triggered, and on the basis that the

economic benefits to be derived therefrom will

redound to the exclusive benefit of ERGO

MINING and the COSTS attributable to

PHASE 2 shall be borne and paid by ERGO

MINING and/or the PARTICIPANTS as more

fully referred to hereafter;

2.4

ownership of the CONSOLIDATED ASSETS and all the RIGHTS will remain

vested in:_

2.4.1

CROWN in respect of the CROWN RESOURCE; and/or

2.4.2

ERPM in respect of the ELSBURG DUMPS; and/or

2.4.3

ERGO MINING in respect of:-

Page 38

2.4.3.1

the ELSBURG JV RESOURCE, the ERGO MINING

RESOURCE and the ORPHAN DUMPS )from the

date of the acquisition thereof); and/or

2.4.3.2

the ERGO MINING ASSETS (inrespect of the

BRAKPAN PLANTS with effect from the 31 July 2008

albeit that it had the us age thereof from the

EFFECTIVE DATE); and/or

2.4.4

ERGO URANIUM in respect of the PAMODZI RESOURCE (from

the date of the acquisition thereof),

as the case may be;

2.5

ERGO MINING shall, pursuant to the MINING USER CONTRACT, mine,

recover, treat and process the MINERALS through the POST

CONSOLIDATION EVENT RESOURCES in terms of PHASE 2 in order to

exploit the economic benefits to be derived therefrom; and

2.6

the PARTIES have reached agreement in regard to all the aforegoing as more

fully set forth hereafter.

Condition Precedent

3.1

Notwithstanding anything to the contrary in the MINING USER CONTRACT

Page 39

AGREEMENTS by the respective parties thereto - on or before the 21 August

2008.

3.2

The aforesaid condition shall be capable of being waived by all the PARTIES in

writing at any time on or before the date afore-referred to.

3.3

Should the aforesaid condition not be fulfilled or waived within the period afore-

referred to or within such extended period/s as the PARTIES may in writing

agree upon, then and in such event and as a pre-requisite to any termination of

the MINING USER CONTRACT, the PARTIES shall meet and in good faith

enter into negotiations with the objective of addressing the problem giving rise

to the possible termination of such contract so as to facilitate the continuity

thereof in the interests of all the PARTIES. Should the problem not be capable

of being addressed after the expiration of a period of 90 (ninety) days following

on such meeting, then and in such event only shall the MINING USER

CONTRACT be deemed null and void ab initio and the PARTIES shall, to the

extent that the MINING USER CONTRACT may have been partially

implemented, be obliged to restore each other as near as possible to the status

quo ante and none of the PARTIES shall have any claim/s against the other or

others of them, as the case may be, save and except in the event of a breach

of the provisions of clause 3.4 infra.

3.4

The PARTIES reciprocally warrant in favour of each other that they will in good

faith use their best endeavours to timeously sign and/or procure the signature

of all documents and/or the furnishing of all relevant information as may be

Page 40

Applicable to each of them, upon written request therefor to facilitate the

fulfilment of the conditions in clause 3.1 supra.

Warranties

4.1

By CROWN

Subject to the fulfilment or waiver of the condition precedent in clause 3.1

supra, CROWN does hereby represent and warrant in favour of the remaining

PARTIES and upon the veracity whereof the MINING USER CONTRACT shall

be founded and which warranties shall be fundamental to the transaction, that:-

4.1.1

the CROWN RESOURCE is lawfully and beneficially owned by

CROWN and it is accordingly entitled to deal therewith in

accordance with the provisions of the MINING USER CONTRACT

and that such resource is not subject to the rights of any third

parties, whether in relation to any encumbrance or otherwise;

4.1.2

to the best of its knowledge and belief, there is no impediment, be

it from the DME or otherwise, to the conclusion of the MINING

USER CONTRACT and in relation to the subject matter thereof;

4.1.3

in the event of ERGO MINING electing to trigger the

CONSOLIDATION EVENT, then for the duration of the MINING

USER CONTRACT, it undertakes to make available to ERGO

MINING the use of the CROWN RESOURCE for the

Page 41

CONSOLIDATION PROCESS and agrees to participate in such

process to the full extent thereof;

4.1.4

it shall, as far as possible and to the extent required, grant such

RIGHTS and/or SERVITUDES to the ELSBURG JV and/or ERGO

MINING (in the event of the CONSOLIDATION PROCESS being

pursued) so as to facilitate the conduct of their respective

BUSINESSES. The aforegoing, however, will exclude the

CROWN processing plant, the ownership and use whereof shall be

retained by CROWN;

4.1.5

it shall second to the ELSBURG JV and/or ERGO MINING such

KEY INDIVIDUALS in its employ as may be requested from time

to time by the ELSBURG JV and/or ERGO MINING and on the

basis more fully set forth in clause 1.1.36 supra;

4.1.6

it will enter into such SERVICE LEVEL AGREEMENT/S as may be

required of it for the purposes of giving effect to its obligations

under the MINING USER CONTRACT;

4.1.7

in no way derogating from clauses 4.1.1 to 4.1.6 supra, it will sign

whatever documentation may be reasonably required in order to

give effect to the provisions of this clause 4.1, upon request

therefor; and

Page 42

4.1.8

it shall at all times comply with the ENVIRONMENTAL

LEGISLATION and participate, to the extent necessary, in the

EMP and take all precautions in relation to the ENVIRONMENT.

4.2

by ERPM

Subject to the fulfilment or waiver of the condition precedent in clause 3.1

supra, ERPM does hereby represent and warrant in favour of the remaining

PARTIES and upon the veracity whereof the MINING USER CONTRACT shall

be founded and which warranties shall be fundamental to the transaction, that:-

4.2.1

the ERPM ASSETS are lawfully and beneficially owned by ERPM

and that it is accordingly entitled to deal therewith in accordance

with the provisions of the MINING USER CONTRACT and that

such assets are not subject to the rights of any third parties,

whether in relation to any encumbrance or otherwise;

4.2.2

to the best of its knowledge and belief, there is no impediment, be

it from the DME or otherwise, to the conclusion of the MINING

USER CONTRACT and in relation to the subject matter thereof;

4.2.3

it will, upon written request therefor by any of the remaining

PARTIES, sign such documentation and furnish such information

as may be reasonabl y requested so as to facilitate the

implementation of the MINING USER CONTRACT;

Page 43

4.2.4

it is the lawful holder of all the RIGHTS (in the case of the

ELSBURG DUMPS subject only to the “

old order mining rights

”

held by it being accepted by the DME as against the filing of an

amended EMP) to mine the ELSBURG DUMPS so as to extract

the MATERIAL therefrom, including the right to sub-contract the

same to the ELSBURG JV, upon the terms and conditions set

forth in the MINING USER CONTRACT;

4.2.5

it shall, as far as possible and to the extent required, grant such

RIGHTS and/or SERVITUDES to the ELSBURG JV and/or ERGO

MINING (in the event of the CONSOLIDATION PROCESS being

pursued), so as to facilitate the conduct of their respective

BUSINESSES;

4.2.6

it shall, within a period of 14 (fourteen) days after the SIGNATURE

DATE, enter into the LEASE with the ELSBURG JV upon the

salient terms and conditions set forth in Annexe “L” hereto and

shall at all times discharge its obligations thereunder;

4.2.7

it shall second to the ELSBURG JV and/or ERGO MINING such

KEY INDIVIDUALS in its employ as may be requested from time

to time by the ELSBURG JV and/or ERGO MINING and on the

basis more fully set forth in clause 1.1.36 supra; and

Page 44

4.2.8

it shall enter into such SERVICE LEVEL AGREEMENT/S as may

be required of it for the purposes of giving effect to its obligations

under the MINING USER CONTRACT; and

4.2.9

it shall at all times comply with the ENVIRONMENTAL

LEGISLATION and participate, to the extent necessary, in the

EMP and take all precautions in relation to the ENVIRONMENT.

4.3

By ERGO MINING

Subject to the fulfilment or waiver of the conditions precedent in clause 3.1

supra, ERGO MINING does hereby represent and warrant in favour of the

remaining PARTIES and upon the veracity whereof the MINING USER

CONTRACT shall be founded and which warranties shall be fundamental to

the transaction, that:-

4.3.1

ERGO MINING was entitled to the usage of the ERGO MINING

ASSETS and the ERGO MINING RESOURCE with effect from the

EFFECTIVE DATE and shall with effect from the 31 July 2008

acquire the beneficial ownership thereof and that it is accordingly

entitled to deal therewith in accordance with the provisions of the

MINING USER CONTRACT and that such assets are not subject

to the rights of any third parties, other than those rights which are

reserved in favour of ANGLOGOLD in terms of the ANGLOGOLD

AGREEMENT (which are contingent upon payment not being

Page 45

made as provided in terms of such agreement) and of which the

PARTIES are fully cognisant;

4.3.2

it has made application to the DME for such of the RIGHTS as may

be necessary for the purposes of the MINING USER CONTRACT

and in accordance with a copy of such application which is

annexed hereto and marked “Q” and so as to facilitate the mining,

recovery, treatment and processing of the MINERALS from the

ELSBURG JV RESOURCE and to the extent necessary, will apply

to supplement same in the event of the activation of the

CONSOLIDATION PROCESS and incorporation therein of the

PRE CONSOLIDATION EVENT RESOURCES;

4.3.3

it shall make the BRAKPAN CIL 1 PLANT available to the

ELSBURG JV for its use for the conduct of its BUSINESS and for

the duration of the MINING USER CONTRACT;

4.3.4

it will use its reasonable commercial endeavours, as soon as

possible after the SIGNATURE DATE, to acquire the ORPHAN

DUMPS;

4.3.5

it will cause the FEASIBILITY STUDY to be undertaken at its

COST as soon as possible after the SIGNATURE DATE with the

objective of obtaining a positive result thereto as soon as possible

and it shall report on a regular basis to the remaining PARTIES as

to its progress;

Page 46

4.3.6

it shall make available to the remaining PARTIES and to facilitate

the activation of the CONS OLID AT ION PROCESS, the

BRAKPAN PLANTS to mine, treat and process the MINERALS

from the POST CONSOLIDATION EVENT RESOURCES;

4.3.7

it shall, as far as possible and to the extent required, grant such

RIGHTS and/or SERVITUDES to the remaining PARTIES (in the

event of the CONSOLIDATION PROCESS being pursued), so as

to facilitate the conduct of their respective BUSINESSES;

4.3.8

it shall, in the event of the CONSOLIDATION EVENT being

triggered, take all reasonable steps to establish and maintain

adequate deposition capacity in order to receive the POST

CONSOLIDATION EVENT RESOURCES for the mining, recovery,

treatment and processing of the MINERALS from such resources

on the basis that the COSTS occasioned thereby shall be borne

and paid by the PARTICIPANTS and furthermore on the basis that

the economic benefits to be derived therefrom, shall redound to its

exclusive benefit. The aforegoing shall be established in

accordance with a processing schedule of the “

Life of Mine

” of the

ELSBURG JV;

4.3.9

it shall enter into such SERVICE LEVEL AGREEMENT/S as may

be required of it for the purposes of giving effect to its obligations

under the MINING USER CONTRACT;

Page 47

4.3.10

it shall at all times comply with the ENVIRONMENTAL

LEGISLATION and participate in the EMP and take all precautions

in relation to the ENVIRONMENT;

4.3.11

it will, upon written request therefor, by any of the remaining

PARTIES, sign such documentation and furnish such information

as may be reas onabl y requested so as to facilitate the

implementation of the MINING USER CONTRACT;

4.3.12

it shall be obliged to receive and dispose of the ELSBURG JV

RESOURCE at a rate of at least 1 250 000 (one million two

hundred and fifty thousand) tonnes per month with effect from the

1 October 2008 on the condition that the running COSTS

associated therewith, are borne by the ELSBURG JV unless

ERGO MINING also treats such tailings as part of PHASE 2, in

which event and from which date the COSTS shall be borne by the

ELSBURG JV and ERGO MINING in equal shares; and

4.3.13

it shall be obliged to take all reasonable steps to establish and

maintain adequate deposition capacity in order to receive the

tailings of the ELSBURG JV and, to the extent applicable, of the

PRE CONSOLIDATION EVENT RESOURCES on the basis that

the PARTICIPANTS shall proportionately pay the COSTS in

proportion to the percentage of the tailings which each

PARTICIPANT contributes in relation to the overall tailings

deposited, and of creating additional deposition capacity, if any.

Page 48

4.4

by ERGO URANIUM

Subject to the fulfilment or waiver of the condition precedent in clause 3

supra, ERGO URANIUM does hereby represent and warrant in

favour of the remaining PARTIES and upon the veracity whereof

the MINING USER CONTRACT shall be founded and which

warranties shall be fundamental to the transaction, that:-

4.4.1

in the event of ERGO MINING electing to trigger the

CONSOLIDATION EVENT, then for the duration of the

MINING USER CONTRACT, it undertakes to make

available to ERGO MI NI N G the use of the XXX O DZI

RE S OURC E for the CONSOLIDATION PROCESS

and agrees to participate in such process to the full extent

thereof;

4.4.2

it shall, to the extent required, grant SERVITUDES to the

ELSBURG JV or ERGO MINING (in the event of

t h e CONSOLIDATION PROCESS being pursued) so as

to facilitate the conduct of their respective BUSINESSES;

4.4.3

it shall second to the ELSBURG JV and/or ERGO MINING such

KEY INDIVIDUALS in its employ as may be requested

from time to time by the ELSBURG JV and/or ERGO

MINING and on the basis more fully set forth in clause

1.1.36 supra

Page 49

4.4.4

it shall enter into such SERVICE LEVEL AGREEMENT/S as

may be required of it for the purposes of giving effect to its obligations

under the MINING USER CONTRACT;

4.4.5

it shall use its reasonable commercial endeavours to procure the

acquisition of the PAMODZI RESOURCE as soon as possible after

the SIGNATURE DATE so that same will become available to

ERGO URANIUM and in the event of ERGO MINING electing to

trigger the CONSOLIDATION EVENT, ERGO URANIUM

undertakes to make such resource available to ERGO MINING for

the implementation of the CONSOLIDATION PROCESS;

4.4.6

it shall, as far as possible and to the extent required, grant such

RIGHTS and/or SERVITUDES to any one or more of the remaining

PARTIES (in the event of the CONSOLIDATION PROCESS being

pursued), so as to facilitate the conduct of their respective

BUSINESSES;

4.4.7

it facilitated the usage of the BRAKPAN PLANTS by ERGO

MINING retrospectively with effect from the EFFECTIVE DATE

and agreed to sell same to ERGO MINING with effect from the 31

July 2008 on the basis that the risks and benefits of usage passed

on the EFFECTIVE DATE and the risks and benefit of ownership

passed on the 31 July 2008; and

Page 50

4.4.8

it will sign whatever documentation may be required in order to

give effect to the provisions of this clause 4.4, upon request

therefor.

4.5

by the ELSBURG JV

Subject to the fulfilment or waiver of the condition precedent in clause 3 supra,

the ELSBURG JV does hereby represent and warrant in favour of the

remaining PARTIES and upon the veracity whereof the MINING USER

CONTRACT shall be founded and which warranties shall be fundamental to

the transaction, that:-

4.5.1

it shall, for the duration of the MINING USER CONTRACT, fully

comply with the RIGHTS which will enable it to mine, recover, treat

and process the ore situate on the ELSBURG DUMPS and with

the right to sub-contract the same to the ELSBURG JV in

accordance with the MINING USER CONTRACT and with the

objective of extracting therefrom the gold bearing ore;

4.5.2

it shall employ such parties as may be necessary for the conduct

of its BUSINESS and to the extent so determined by it, it will

require CROWN and/or ERGO MINING and/or ERPM to second

such of their KEY INDIVIDUALS as it considers reasonable and

necessary for such purposes;

Page 51

4.5.3

it will take all necessary steps to process the gold bearing ore

through PHASE 1 and will then cause the gold extracted to be

realised in its capacity as agent for ERPM through Rand Refineries

Limited and it shall account to ERPM on a quarterly basis for the

proceeds of all realisations, less the COSTS occasioned thereby;

4.5.4

it will enter into the LEASE with ERPM for the period and upon the

salient terms and conditions set forth in Annexe “L” hereto and it

will at all times comply with all and sundry its obligations

thereunder, including and in no way derogating therefrom the

ENVIRONMENT and similar such requirements;

4.5.5

it shall enter into such SERVICE LEVEL AGREEMENT/S as may

be required of it for the purposes of giving effect to its obligations

under the MINING USER CONTRACT;

4.5.6

it shall supply the ELSBURG JV RESOURCE to ERGO MINING

so as to enable the latter to extract the MINERALS thereform and

ownership whereof shall be deemed to have passed from the

ELSBURG JV to ERGO MINING after the completion of each run

of PHASE 1;

4.5.7

it shall, as far as possible and to the extent required, grant such

RIGHTS and/or SERVITUDES to the remaining PARTIES (in the

event of the CONSOLIDATION PROCESS being pursued), so as

to facilitate the conduct of their respective BUSINESSES;

Page 52

4.5.8

it will sign whatever documentation may be required in order to

give effect to the provisions of this clause 4.5, upon request

therefor; and

4.5.9

it shall at all times comply with the ENVIRONMENTAL

LEGISLATION and to the extent necessary, participate in the EMP

and take all precautions in relation to the ENVIRONMENT.

4.6 by MOGALE

Subject to the fulfilment or waiver of the condition precedent in clause 3 supra,

MOGALE does hereby represent and warrant in favour of the remaining

PARTIES and upon the veracity whereof the MINING USER CONTRACT shall

be founded and which warranties shall be fundamental to the transaction, that:-

4.6.1

to the extent that it has not completed the refurbishment of the

BRAKPAN CIL 1 PLANT, it shall do so at its expense as

expeditiously as possible after the SIGNATURE DATE;

4.6.2

it initially acquired the BRAKPAN PLANTS from HVH and

thereafter sold same to ERGO URANIUM;

4.6.3

it will, as far as possible and to the extent required, grant such

RIGHTS and/or SERVITUDES to the ELSBURG JV so as to

facilitate the conduct of its BUSINESS;

Page 53

4.6.4

it shall second to the ELSBURG JV such KEY INDIVIDUALS in its

employ as may be requested from time to time by the ELSBURG

JV and on the basis more fully set forth in clause 1.1.37 supra;

4.6.5

it will enter into such SERVICE LEVEL AGREEMENTS as may be

required of it for the purposes of giving effect to its obligations as a

joint venturer under the ELSBURG JV and as read with the

MINING USER CONTRACT;

4.6.6

in no way derogating from any other provision of the MINING

USER CONTRACT, it will sign whatever documentation may be

reasonably required in order to give effect to the provisions of this

clause 4.6, upon request therefor.

5. Appointments

5.1

On the CLOSING DATE and retrospectively with effect from the EFFECTIVE

DATE:-

5.1.1

ERPM of the one part does hereby appoint the ELSBURG JV of

the other part, to mine, treat and process the ELSBURG DUMPS

to extract the gold bearing ore therefrom in terms of PHASE 1 and

the ELSBURG JV accepts the rights and obligations hereby

conferred on it in terms of the MINING USER CONTRACT; and

Page 54

5.1.2

the ELSBURG JV does hereby appoint ERGO MINING, with the

concurrence of ERPM, to mine, treat and process the ELSBURG

JV RESOURCE to extract the MINERALS therefrom in terms of

PHASE 2 and ERGO MINING accepts the rights and obligations

hereby conferred on it in terms of the MINING USER CONTRACT.

5.2.1

The benefits of and risks attaching to the aforesaid appointments

shall, unless provided to the contrary hereafter, pass from ERPM

to the ELSBURG JV on the one hand and from the latter to ERGO

MINING on the other hand retrospectively with effect from the

EFFECTIVE DATE and subject to the arrival of the CLOSING

DATE.

5.2.2

Notwithstanding anything to the contrary in 5.2.1 supra, the

PARTIES agree that all COSTS incurred in the conduct of the

aforegoing operations, shall in relation to PHASE 1, be borne and

paid by the ELSBURG JV and in relation to PHASE 2, by ERGO

MINING and on the basis that the income accruing from the mining

operations from PHASE 1 shall redound to the exclusive benefit of

the ELSBURG JV and from PHASE 2, to the exclusive benefit of

ERGO MINING.

5.2

Page 55

6. LEASE

6.1

In no way derogating from any other provision of the MINING USER

CONTRACT and subject to the fulfilment or waiver of the condition precedent

in clause 3 supra, ERPM does hereby with effect from the EFFECTIVE DATE,

lease the LAND and what the PARTIES contend constitute the movable assets

situate thereupon, that is the ELSBURG DUMPS, to the ELSBURG JV, for the

period and upon the remaining salient terms and conditions as set forth in

Annexe “L” hereto, so as to enable the ELSBURG JV to mine, recover, treat

and process the MATERIAL with the objective of extracting gold therefrom for

the exclusive benefit of the ELSBURG JV, whereafter the ELSBURG JV

RESOURCE (the ownership whereof shall be deemed to have passed to

ERGO MINING) shall be dumped onto the Brakpan Tailings Dam pending the

activation of PHASE 2 when such resource, together with the PRE

CONSOLIDATION EVENT RESOURCES, shall be mined, recovered, treated

and processed through PHASE 2, in accordance with the processing schedule

and “

Life of Mine

” of the ELSBURG JV and ERGO MINING.

6.2 The LEASE shall continue uninterruptedly and indefinitely until the earlier of:-

6.2.1

the written agreement of ERPM, the ELSBURG JV and ERGO

MINING that the economic benefits to be derived from the mining

of the ELSBURG DUMPS have either been exhausted or that

same are no longer economically viable; or

Page 56

6.2.2

the cancellation thereof in the event of a material breach of any of

the material provisions of the LEASE which cannot be remedied by

monetary compensation and notwithstanding the expiration of a

xxxx

period of 90 (ninety) days and on the basis that if the

cancellation is disputed, then viz-a-viz the lessor and the lessee,

the arbitration provisions set forth in clause 20 infra, shall be and

become applicable.

6.3

The PARTIES shall use their best endeavours to furnish all information in

connection with the aforegoing and to sign all requisite documentation in order

to ensure that the aforesaid provisions are fully implemented as expeditiously

as possible.

7. Ownership of MATERIAL

Notwithstanding anything to the contrary in the whole of the MINING USER

CONTRACT contained:-

7.1

ownership of the MATERIAL situate on the ELSBURG DUMPS shall vest in

ERPM until the completion of PHASE 1 when such MATERIAL shall leave the

BRAKPLAN CIL 1 PLANT after the extraction of the gold therefrom (for the

avoidance of doubt it is expressly recorded that the MATERIAL remains the

property of ERPM until after it has been treated for gold and it leaves the

BRAKPAN CIL 1 PLANT, at which point in time it becomes the property of

ERGO MINING). From that point onwards ERGO MINING shall be obliged to

receive the residue and ownership thereof shall be deemed to have passed to

Page 57

it together with the risks and benefits attached thereto and on the basis that the

income to be derived therefrom, shall redound to the exclusive benefit of

ERGO MINING; and

7.2

ownership arising from the processing of the PRE CONSOLIDATION EVENT

RESOURCES in the event of the CONSOLIDATION EVENT being triggered,

shall vest in ERGO MINING upon same entering the BRAKPAN CIL 2 PLANT

and on the basis that the income derived therefrom, shall redound to the

exclusive benefit of ERGO MINING for the ultimate benefit of its shareholders,

namely CROWN and ERGO URANIUM, in equal shares.

Duration

8.1

Subject to the arrival of the CLOSING DATE, the MINING USER CONTRACT

shall be deemed to have commenced on the EFFECTIVE DATE and shall

continue until:-

8.1.1

the PARTIES will have unanimously agreed in writing that the

economic benefits to be derived from the mining of:-

8.1.1.11the ELSBURG DUMPS (including the ELSBURG JV

RESOURCE) will have been exhausted or will no

longer be economically viable; or

8.1.1.21the PRE CONSOLIDATION EVENT RESOURCES (in

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been triggered), will have been exhausted or will no

longer be economically viable, or

8.1.2

the written cancellation thereof in the event of a material breach of

any of the material provisions of the MINING USER CONTRACT

which cannot be remedied by monetary compensation and

notwithstanding the expiration of a xxxx period of 90 (ninety) days

and on the basis that if the cancellation is disputed, then the

arbitration provisions set forth in clause 20 infra, shall be and

become applicable,

whichever shall be the earlier.

8.2

Notwithstanding the aforegoing the PARTIES shall at all times in good faith use

their best endeavours to procure the continuance of the MINING USER

CONTRACT so as to facilitate the fulfilment of their common objectives.

Obligations/Entitlements

9.1

The ELSBURG JV shall mine and exploit the ELSBURG DUMPS on behalf of

ERPM and for this purpose it shall provide ERPM with the names of competent

persons to be appointed, as required in terms of the MHSA and MPRDA, and

their acceptance of the appointments and the ELSBURG JV shall make all

such other appointments as ERPM may reasonably request in connection with

the aforegoing.

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conduct such inspections and audits in connection with the CONSOLIDATED

9.2

Subject to the arrival of the CLOSING DATE and then retrospectively with

effect from the EFFECTIVE DATE and in relation to the CONSOLIDATED

ASSETS, the ELSBURG JV accepts all environmental responsibilities in terms

of the ENVIRONMENTAL LEGISLATION and it shall be responsible to put in

place the EMP which shall be subject to the prior written approval of ERPM

and which approval shall not be capable of being unreasonably withheld. In no

way derogating from the aforegoing, the ELSBURG JV shall be responsible for

all costs in connection with the mining, treatment and processing of the

ELSBURG DUMPS utilising the CONSOLIDATED ASSETS, including any

disclosed obligations (in writing) as shall have arisen prior to the EFFECTIVE

DATE.

9.3

the ELSBURG JV shall conduct its mining and other operations of the

ELSBURG DUMPS in a proper and workmanlike manner, and in accordance

with current mining practise, in which regard it declares itself to have the

relevant knowledge and skill. The ELSBURG JV shall comply with all acts,

regulations, by-laws and/or other legislation applicable and in force from time to

time with regard to its mining and other operations in relation to the ELSBURG

DUMPS. The ELSBURG JV shall not do, or cause to be done or omit to do

anything in, on or under the ELSBURG DUMPS which may render the future

environmental rehabilitation thereof and/or any areas contiguous thereto

ineffective or more costly.

9.4

ERPM and/or ERGO MINING may jointly and severally, at all reasonable times

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ASSETS as it/they deem/s necessary, to ensure that the ELSBURG JV is

complying with its obligations in terms of the MINING USER CONTRACT.

9.5

The ELSBURG JV shall ensure that the ELSBURG DUMPS and the

CONSOLIDATED ASSETS are at all times safe and shall obtain all such

consents, permissions and/or permits from the relevant authorities as may be

required in terms of applicable legislation and in no way derogating therefrom,

whether from the DME in terms of the MPRDA or in terms of the MHSA or

otherwise. ERPM shall render its reasonable assistance in such regard and

shall sign all documentation reasonably necessary therefor or incidental

thereto.

9.6

The ELSBURG JV may make use of any of the KEY INDIVIDUALS provided

by ERPM at the COST of the ELSBURG JV, which shall be the cost to ERPM

of the person’s employment converted to an hourly rate.

9.7

ERPM shall have the right to appoint KEY INDIVIDUALS to conduct various

tasks in respect of the contemplated mining operations utilising the

CONSOLIDATED ASSETS on the basis that the COSTS thereof, shall be

borne and paid by the ELSBURG JV, which COSTS shall be the cost to ERPM

of the person’s employment converted to an hourly rate.

9.8

The provisions of clauses 9.1 to 9.7 supra shall, in addition, apply viz-a-viz:-

9.8.1 the ELSBURG JV on the one hand and ERGO MINING on theother in

relation to the ELSBURG JV RESOURCE; and

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9.8.2

ERGO M INING on the one hand and CROWN and ERGO

URANIUM on the other in relation to the POST CONSOLIDATION

EVENT RESOURCES.

9.9

In the event of the CONSOLIDATION EVENT being triggered and prior to the

CROWN RESOURCE being physically incorporated in to the

CONSOLIDATION PROCESS, if CROWN is still in the process of mining the

CROWN “

Life of Mine

”, then notwithstanding anything to the contrary it shall:-

9.9.1

have the right to dump the MATERIAL onto its tailings facility

(which is part of the CROWN RESOURCE) until after its “

Life of

Mine

” has been completed; and

9.9.2

not be inhibited or restricted in the use of the CROWN RIGHTS

and/or SERVITUDES which connect the CROWN RESOURCE to

the rights or resources of any third parties.

9.10 ERGO MINING undertakes to receive 1,2 million (one comma two million)

tonnes of the ELSBURG JV RESOURCE per month for processing purposes

and on the basis that the economic benefits to be derived therefrom, shall

redound to the exclusive benefit of ERGO MINING.

10. CONSOLIDATED ASSETS

10.1 ERPM shall make the ERPM ASSETS available to the ELSBURG JV for the

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extent applicable, make same available to ERGO MINING. The ELSBURG JV

and ERGO MINING shall jointly and severally be obliged to maintain the ERPM

ASSETS in good working order and condition and uon the termination of the

MINING USER CONTRACT for whatever reason, to return the same to ERPM,

fair wear and tear excepted and save where ownership has passed to third

parties, including the ELSBURG JV or ERGO MINING, as the case may be.

10.2 The ELSBURG JV and ERGO MINING shall jointly and severally at their sole

COST make good any damage to the CONSOLIDATED ASSETS caused by

any negligent act, error or omission of the ELSBURG JV or ERGO MINING, its

employees or duly authorised agents.

10.3 The provisions of this clause 10 shall in addition apply, mutatis mutandis, in

relation to the ERGO MINING ASSETS as between ERGO MINING on the one

hand and CROWN and/or the ELSBURG JV and/or ERGO URANIUM on the

other.

11. Consideration for the Conclusion of the ERGO/ERGO MINING USER CONTRACT

and the LEASE

11.1

On the CLOSING DATE the following shall be implemented to the extent that it

may not have been implemented prior thereto, to wit:-

11.1.1

CROWN as a quid pro quo for the conclusion of the MINING

USER CONTRACT shall receive 50% (fifty per centum) of the

issued share capital of ERGO MINING.

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11.1.2

the ELSBURG JV as a quid pro quo for the conclusion of the

MINING USER CONTRACT with the remaining PARTIES shall

receive the economic benefits to be derived from the PHASE 1

operations;

11.1.3

ERGO MINING as a quid pro quo for the conclusion of the MINING

USER CONTRACT with the remaining PARTIES shall receive the

benefits to be derived from the mining of the POST

CONSOLIDATION EVENT RESOURCES in the event of the

CONSOLIDATION EVENT being triggered and in the event of

same not being activated, then the benefits to be derived from the

mining of the ELSBURG JV RESOURCE only;

11.1.4

ERGO URANIUM as a quid pro quo for the conclusion of the

MINING USER CONTRACT with the remaining PARTIES shall

receive 50% (fifty per centum) of the equity in ERGO MINING;

11.1.5

ERPM, as a quid pro quo for the conclusion of the MINING USER

CONTRACT and the LEASE with the ELSBURG JV shall receive

the ERPM JOINT VENTURE PARTICIPATION; and

11.1.6

MOGALE as a quid pro quo for the refurbishment of the

BRAKPAN CIL 1 PLANT and the conclusion of the MINING USER

CONTRACT with the remaining PARTIES shall receive a 50%

(fifty per centum) joint venture interest in the ELSBURG JV.

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11.2 The PARTIES shall cause to be executed whatever relevant documentation

may be necessary therefor.

12.

CLOSING DATE

On the CLOSING DATE the PARTIES’ duly authorised representatives shall meet at a

pre-determined time and venue and at which they shall sign and exchange such

documents as may be necessary to give effect to the provisions of clause 11 supra.

13.

BRAKPAN PLANTS

Should any dispute arise at any point in time in relation to what constitutes the

BRAKPAN PLANTS or any component thereof or any infrastructure servicing the

same, then and in such event same shall be referred to Messrs Xxxxxxx Xxxxxx and

Basie Maree, who shall act as experts and whose decision in regard thereto shall be

final and binding save whether the two experts are unable to reach agreement, in

which event the dispute shall then be referred to an independent third party expert,

whose decision shall prevail.

14.

Indemnities

14.1 The ELSBURG JV hereby indemnifies and holds ERPM, including its

subsidiaries, its employees and duly authorised representatives, harmless

against any claims (including costs on an attorney and client scale of

investigating, settling and resisting such claims), instituted by any third party

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against ERPM as a result of the operations or presence in, on and under the

ELSBURG DUMPS or the utilisation of the CONSOLIDATED ASSETS, or any

act or omission by the ELSBURG JV, its employees, duly authorised agents or

representatives or contractors or sub-contactors, or otherwise arising out of or

connected with the MINING USER CONTRACT.

14.2 The ELSBURG JV warrants that ERPM is not, nor will it become liable for, or

obliged to bear, any COSTS, whether during the currency of the MINING

USER CONTRACT or thereafter, in respect of compliance with any law or

regulation, and inparticular the MHSA , the MPRDA and the

ENVIRONMENTAL LEGISLATION, pertaining to or arising from its operations

in, on or under the ELSBURG DUMPS and utilising the CONSOLIDATED

ASSETS, and indemnifies and holds ERPM harmless against any claims for

such COSTS.

14.3 The ELSBURG JV may not enter into any agreements with any third party

binding, or purporting to bind ERPM, without the prior written consent of

ERPM, which approval shall not be capable of being unreasonably withheld or

delayed where such agreements are directed towards preserving the

CONSOLIDATED ASSETS.

14.4 The ELSBURG JV may not enter into any agreements relating to the

CONSOLIDATED ASSETS unless it obtains prior written approval to enter into

such agreements from ERPM, which approval shall not be capable of being

unreasonably withheld or delayed.

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14.5 The aforegoing provisions shall in addition apply, mutatis mutandis, as

between:-

14.5.1

the ELSBURG JV on the one hand and ERGO MINING on the

other; and

14.5.2

ERGO MINING on the one hand and CROWN, the ELSBURG JV,

ERGO URANIUM and, to the extent applicable MOGALE, on the

other.

15.

Insurance

15.1 The ELSBURG JV shall take out with an insurance company acceptable to

ERPM, and maintain in force from the SIGNATURE DATE, such insurance

cover which is, to the reasonable satisfaction of ERPM, sufficient to cover any

third party or public liability which ERPM may incur as a result of the

implementation of the provisions of the MINING USER CONTRACT. Should

the ELSBURG JV at any time fail to take out and maintain such insurance then

ERPM shall be entitled to take out such insurance, the cost of which shall be

payable by the ELSBURG JV to ERPM on demand.

15.2 The provisions of clause 15.1 supra shall in addition apply,

mutatis mutandis

between:-

15.2.1

the ELSBURG JV on the one hand and ERGO MINING on the

other; and

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15.2.2

ERGO MINING on the one hand and CROWN, the ELSBURG JV,

ERGO URANIUM and, to the extent applicable MOGALE, on the

other.

16.

Force Majeure

16.1

If any PARTY is prevented or restricted directly or indirectly from carrying out

all or any of its obligations under the MINING USER CONTRACT from any

cause beyond the reasonable control of that PARTY (including without limiting

the generality of the aforegoing, war, civil commotion, riot, insurrection, strikes,

lock-outs, fire, explosion, flood and acts of God), the PARTY so affected shall

be relieved of its obligations hereunder during the period that such event and

its consequences continue (excluding payment obligations for services already

performed) but only to the extent so prevented and shall not be liable for any

delay or failure in the performance of any obligations hereunder or loss or

damages either general, special or consequential which the other PARTY/IES

may suffer due to or resulting from such delay or failure, provided always that

written notice shall within 48 (forty eight) hours of the occurrence constituting

Force Majeure be given of any such inability to perform by the affected PARTY

and provided further that the obligation to give such notice shall be suspended

to the extent necessitated by such Force Majeure

16.2 The PARTY invoking Force Majeure shall use its best endeavours to terminate

the circumstances giving rise to Force Majeure and upon termination of the

circumstances giving rise thereto, shall forthwith give written notice thereof to

the other PARTIES.

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16.3 In the event that Force Majeure should last more than 6 (six) months, the

PARTY who has not claimed Force Majeure may terminate the MINING USER

CONTRACT by notice in writing to the other PARTIES, subject always to the

overriding provisions of the TERM SHEET and the common objectives therein

set forth.

17. CROWN GOLD CIRCUIT

17.1 It the event of the CONSOLIDATION EVENT not being triggered, then

CROWN shall be entitled, in its sole and absolute discretion, to establish the

CROWN GOLD CIRCUIT so as to extract gold from the CROWN RESOURCE,

using the associated CROWN assets and the ERGO MINING ASSETS.

17.2 In the event of CROWN electing to establish the CROWN GOLD CIRCUIT, it

shall be obliged to advise the remaining PARTIES thereof, in writing, as soon

as possible. The then contemplated mining operations solely in relation to

gold, shall be undertaken by CROWN at its own COST and for its own

exclusive benefit.

17.3 Once the CROWN GOLD CIRCUIT is established, CROWN shall be entitled to

deliver to ERGO MINING, which shall be obliged to receive from it (CROWN)

at least 1 250 000 (one million two hundred and fifty thousand) tonnes of

tailings per month and to process the MINERALS therefrom. Delivery shall

take place at the Brakpan/Withok Tailings Facility and notwithstanding anything

to the contrary, ownership in and to such tailings as well as the economic

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benefits to be derived therefrom, shall pass to ERGO MINING on such

delivery.

17.4 Notwithstanding anything to the contrary, CROWN warrants in favour of the

ELSBURG JV that whether it activates the CROWN GOLD CIRCUIT or not, it

will at no stage enter into any agreement with any third party in relation to the

mining, recovery, treatment and processing of the MINERALS to the exclusion

of gold.

17.5 It is recorded that if the CROWN GOLD CIRCUIT is established, then ERGO

MINING will nevertheless be obliged to receive 1,2 million (one comma two

million) tonnes of tailings per month and to dispose thereof for and on its

behalf and as a quid pro quo therefor it shall have received its equity interest in

ERGO MINING.

17.6 CROWN shall bear the monthly COSTS relating to the maintenance and

upkeep of the tailings facility to be made available by ERGO MINING in the

ratio of CROWN’s monthly tailings delivered to the deposition site as a

percentage of the entire volume of tailings deposited on a monthly basis unless

ERGO MINING treats such tailings for MATERIAL, in which event the COSTS

shall be shared equally. In no way derogating from the aforegoing, CROWN

shall have the right to connect its plant and the CROWN RESOURCE (with the

requisite pipelines and power cables) to what is generally known and described

as the “

Brakpan/Withok Tailings Facility

” using, to the extent required, the line

rights and SERVITUDES of ERGO MINING, and shall have access to such line

rights and SERVITUDES.

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18. ERGO URANIUM GOLD CIRCUIT

18.1 In the event of the CONSOLIDATION EVENT not being triggered, then ERGO

URANIUM shall be entitled, in its sole and absolute discretion, to establish the

ERGO URANIUM GOLD CIRCUIT so as to extract gold from the ERGO

MINING RESOURCE, the PAMODZI RESOURCE and the ORPHAN DUMPS,

using the associated ERGO MINING ASSETS and in particular the BRAKPAN

CIL 2 PLANT.

18.2 Should ERGO URANIUM establish the ERGO URANIUM GOLD CIRCUIT

then the aforesaid mining operations, solely in relation to gold, shall be

undertaken by it at its own cost and for its own benefit.

18.3 In the event of ERGO URANIUM electing to undertake the aforegoing, it shall

be obliged to advise the remaining PARTIES as soon as possible thereof and

in which event the residue of MATERIAL after the extraction of the gold shall,

from that point onwards, be deemed to have passed from an ownership

perspective, from ERGO URANIUM to the ERGO MINING and same shall then

be subject to such mining, treatment and processing activities as may be

necessary by the ERGO MINING so as to extract therefrom the MINERALS

and for the realisation thereof for the benefit of the ERGO MINING and at the

latter’s cost.

18.4 Notwithstanding anything to the contrary, ERGO URANIUM warrants in favour

of ERGO MINING that whether it activates the ERGO URANIUM GOLD

CIRCUIT or not, it will at no stage enter into any agreement with any third party

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in relation to the mining, recovery, treatment and processing of the MINERALS

to the exclusion of gold.

18.5 It is recorded that if the ERGO URANIUM GOLD CIRCUIT is established, then

ERGO MINING will nevertheless be obliged to receive 1,2 million (one comma

two million) tonnes of tailings per month and to dispose thereof for and on its

behalf and as a quid pro quo therefor it shall receive the economic benefits

derived therefrom.

18.6 ERGO URANIUM shall bear the monthly COSTS relating to the maintenance

and upkeep of the tailings facility to be made available by ERGO MINING in

the ratio of ERGO URANIUM’s monthly tailings delivered to the deposition site

as a percentage of the entire volume of tailings deposited on a monthly basis

unless ERGO MINING treats such tailings for MATERIAL, in which event the

COSTS shall be shared equally. In no way derogating from the aforegoing,

ERGO URANIUM shall have the right to connect the ERGO MINING

RESOURCE, the PAMODZI RESOURCE and the ORPHAN DUMPS (with the

requisite pipelines and power cables) to the BRAKPAN CIL 2 PLANT and to

what is generally known and described as the “

Brakpan/Withok Tailings

Facility

” using, to the extent necessary, the line rights and SERVITUDES of

ERGO MINING, and shall have access to such line rights and SERVITUDES.

19.

Breach

If any :-

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19.1 PARTY fails to make any payment, owed by it, on the due date and remains in

default for 90 (ninety) days after receiving written notice to remedy the default;

19.2 PARTY commits any other material breach of the MINING USER CONTRACT

and fails to remedy the breach within a reasonable time [which shall not be less

than 90 (ninety) days] after receiving written notice to do so from the other

PARTY; or

19.3 PARTY is unable or is deemed to be unable to pay its debts in accordance with

the provisions of section 345 of the Companies Act, 1973, or otherwise defaults

generally in the payment of its liabilities; or

19.4 provisional or final order is made or an effective resolution passed for the

winding-up of the other PARTIES other than for bona fide restructuring

purposes; or

19.5 provisional or final order is made for the judicial management of any PARTY;

19.6 of the assets of any PARTY having a value of not less than R250 000,00 (two

hundred and fifty thousand rand) is attached under a writ of execution issued

out of any court and the writ is not satisfied within 30 (thirty) days from its

service or if satisfactory steps are not taken to procure the rescission of the

judgment giving rise thereto; or

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19.7 scheme of arrangement or compromise is entered into or attempted by any

PARTY pursuant to the provisions of Section 311 of the Companies Act, No 61

of 1973, as amended, save where such scheme relates to a bona fide

restructuring to which all the PARTIES have furnished their prior written

consent, which shall not be unreasonably withheld or delayed,

then and in such event and although such breach shall constitute a material breach,

none of the PARTIES shall be entitled to cancel the MINING USER CONTRACT in the

event of the breach being capable of being addressed by way of monetary

compensation and save only in the event of the non-payment of such compensation, it

being the underlying intention of the PARTIES that the MINING USER CONTRACT

which is being entered into in their mutual long term interests, will remain of full force

and effect for the duration thereof.

20. Dispute Resolution

20.1 Any dispute arising out of or in connection with the M INING USER

CONTRACT or the subject matter of the MINING USER CONTRACT including

without limitation any dispute concerning:-

20.1.1

the existence of the MINING USER CONTRACT apart from this

clause 20;

20.1.2

the interpretation and effect of the MINING USER CONTRACT

and the ANCILLARY AGREEMENTS;

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20.1.3

the PARTIES’ respective rights and obligations under the MINING

USER CONTRACT, the ANCILLARY AGREEMENTS and under

the

TERM SHEET

;

20.1.4

the rectification of the MINING USER CONTRACT;

20.1.5

the breach, termination or cancellation of the MINING USER

CONTRACT or any matter arising out of breach, termination or

cancellation thereof;

20.1.6

damages in delict, compensation for unjust enrichment of any

other claim, whether or not the rest of the MINING USER

CONTRACT (apart from this clause) is valid and in force,

shall in the first instance be referred for joint consideration and possible

resolution to the following persons in the following order of priority:-

•

to the Chief Executive Officer of ERPM on the one hand and the Chief

Executive Officer of MOGALE on the other hand; thereafter

•

to the Chief Executive Officer of DRD SA and the Chief Executive

Officer of MINTAILS SA; thereafter

•

to the Chief Executive Officer of DRDGold Limited and the Chief

Executive Officer of MinTails Limited of Australia.

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Should these officers not be able to resolve the dispute, then they shall, by

agreement, appoint an independent third party to act as a mediator, and not as

an arbitrator, to mediate in the resolution of the dispute. Should they not be

able to agree on the mediator, then the mediator shall be selected by the

Chairman of the Arbitration Foundation of Southern Africa (“AFSA”). Should

the dispute not be resolved in this manner, then the dispute shall be decided by

arbitration as set out in clauses 20.2 to 20.9 infra.

20.2 If any PARTY requires a dispute to be referred to arbitration after the mediation

referred to in clause 20.1 supra has not been able to resolve a dispute, that

PARTY shall notify the other PARTY/IES in writing, identifying the dispute and

setting out the relief required.

20.3 Within 30 (thirty) days of receipt of the notice referred to in clause 20.2 above,

the PARTIES shall agree on the arbitrator. If agreement is not reached within

30 (thirty) days after any PARTY, in writing, called for agreement, the arbitrator

shall be appointed by the Chairman of AFSA. The arbitrator appointed must

be, taking into account the nature of the dispute, suitably qualified to deal with

the matter and be totally independent of the PARTIES and not have

represented any of the PARTIES at any prior stage.

20.4 The arbitration shall be held in Johannesburg and the PARTIES shall

endeavour to ensure that it is completed, if possible, within 120 (one hundred

and twenty) days after the appointment of the arbitrator unless the arbitrator is

of the opinion that an extended period is required therefor. Should the

PARTIES be unable to agree on the time parameters for the resolution of the

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dispute and should it then become necessary to pursue the same as envisaged

by the AFSA Rules then, notwithstanding anything to the contrary therein

contained, the time parameters as contained in the AFSA Rules shall be

deemed substituted in their entirety by the Uniform Rules of the High Court of

South Africa and in the event of any conflict, as determined by the presiding

arbitrator.

20.5 The arbitrator need not strictly observe the principles of law and the rules of

evidence and may decide upon the procedure to be followed in respect of the

matters submitted to him according to what he considers equitable in the

circumstances.

20.6 The proceedings in the arbitration shall as far as practicable take place in

private and be kept confidential.

20.7 The PARTIES shall be entitled to legal representation at the arbitration.

20.8 The arbitrator shall decide the dispute and hand down a written decision no

later than 30 (thirty) days after the completion of the arbitration proceedings

unless the PARTIES agree to the contrary. Any PARTY aggrieved at the

arbitrators’s decision shall be entitled to require the decision to be referred to

an appeal panel of 3 (three) retired judges, one selected by each of the

PARTIES to the dispute and the remaining judge who shall be appointed by

the 2 (two) nominated retired judges and who shall act as the chairman of the

panel. The procedures to be followed in connection with the appeal process

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shall be determined in accordance with those prescribed by AFSA unless the

PARTIES agree to the contrary.

20.9 The provisions of this clause shall not preclude any PARTY from obtaining

interim relief on an urgent basis from a court of competent jurisdiction pending

the decision of the arbitrator.

21.

Domicilium Citandi et Executandi

21.1 Each PARTY chooses the address set out opposite its name below as its

domicilium citandi et executandi at which all notices, legal processes and other

communications must be delivered for the purposes of the MINING USER

CONTRACT:-

21.1.1

CROWN and ERPM - 4 Ebsco House, 000 Xxxxxxxxx Xxxxxx,

Xxxxxxxxxx, Xxxxxxxxxxxx 0000 - telefax number 011 476-2637;

21.1.2

ELSBURG JV, ERGO MINING, ERGO URANIUM and MOGALE

- care of 1

Floor, North Wing, Xxxx Xxxxxxx Office Park, 000

Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 0000, telefax number 012 346-

4409

with copies in both instances to Xxxxxxxxxx Xxxxxxxxx, 00

Xxxxx, XX House, 00

Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 0000, telefax number 011 712-

712.

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21.2 Any notice or communication required or permitted to be given in terms of the

MINING USER CONTRACT shall be valid and effective only if in writing, but it

shall be competent to give notice by telefax.

21.3 Any PARTY may by written notice to the other PARTY, change its chosen

address to another physical address, provided that such alternate physical

address is within the Republic of South Africa, and/or its chosen telefax

number to another telefax number, provided that the change shall become

effective on the 14

(fourteenth) day after receipt of the notice by the

addressee.

21.4 Any notice to a PARTY contained in a correctly addressed envelope and:-

21.4.1

sent by prepaid registered post to it at its chosen address; or

21.4.2

delivered by hand to a responsible person during ordinary

business hours at its chosen address,

shall be deemed to have been received, in the case of clause 21.4.1, on the

(tenth) business day after posting (unless the contrary is proved) and, in

the case of clause 21.4.2 or 21.5, on the day of delivery.

21.5 Any notice by telefax to a PARTY at its telefax number shall be deemed,

unless the contrary is proved, to have been received within 24 (twenty four)

hours of transmission where it is transmitted during normal business hours, or

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within 12 (twelve) hours of the opening of business on the first business day

after it is transmitted where it is transmitted outside those business hours.

22. Non-Solicitation

22.1 ERGO URANIUM and ERPM jointly undertake in favour of the ELSBURG JV

and ERGO MINING that they shall not for a period of 24 (twenty four) months

after the date of termination of the MINING USER CONTRACT for whatever

cause or reason, either for themselves or as the agent of anyone else:-

22.1.1

persuade, induce, solicit, encourage or procure any employee,

staff, officer, contractor or agent of the ELSBURG JV or ERGO

MINING to become employed or interested in any business, firm,

undertaking or company, which is directly or indirectly in

competition with the business carried on by the ELSBURG JV and

ERGO MINING, or terminate their employment with the ELSBURG

JV and ERGO MINING;

22.1.2

solicit, interfere with or entice or endeavour or attempt to solicit,

interfere with or entice away from the ELSBURG JV and ERGO

MINING, any person, firm or company who or which is a customer

or business partner, business associate or business connection of

the ELSBURG JV and ERGO MINING;

22.1.3

interfere with the business and/or contractual relationship between

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JV and ERGO MINING and any of their employees, or between

the ELSBURG JV and ERGO MINING and any of their customers

or business partners , business ass oc iates or business

connections.

22.2 The provisions of clause 22.1 supra shall apply, mutatis mutandis , as between

the remaining PARTIES to the MINING USER CONTRACT.

23.

Alteration of Circumstances

Should circumstances arise which were not with the contemplation of the PARTIES at

the SIGNATURE DATE, which adversely affect the rights or obligations of any of the

PARTIES, the PARTIES shall meet and negotiate in good faith to reach an equitable

and reasonable solution in order to give effect to the operation and purpose of the

MINING USER CONTRACT and the ANCILLARY AGREEMENTS and as

contemplated in the TERM SHEET.

24.

Invalid Provisions

If any provision of the MINING USER CONTRACT contravenes any provision of any

law, regulation, ordinance or the like, that provision shall be deemed to be null and

void or the scope of the provision shall be deemed to have been limited to exclude

such contravention.

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25.

Sensitive Information

No PARTY shall be required to supply or distribute any information in violation of any

law, regulation, ordinance or other official decree or, if such supply or distribution can

only be made with the approval of a governmental authority, without approval of that

authority.

26.

Taxation

Each PARTY will be responsible for obtaining its own professional advice regarding

the tax implications of the MINING USER CONTRACT, and shall likewise be

responsible for the payment of all taxes due by it, whether such taxes are payable to

the relevant revenue and/or other authorities in South Africa.

27.

Good Faith and Implementation

27.1 The PARTIES undertake to do all such things, perform all such acts and take

all steps to procure the doing of all such things and the performance of all such

acts, as may be necessary or incidental to give or conducive to the giving of

effect to the terms, conditions and import of the MINING USER CONTRACT

and the ANCILLARY AGREEMENTS.

27.2 The PARTIES shall at all times during the continuance of the MINING USER

CONTRACT observe the principles of good faith towards one another in the

performance of their obligations in terms of the MINING USER CONTRACT

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and the ANCILLARY AGREEMENTS. This implies, without limiting the

generality of the aforegoing, that:-

27.2.1

they will at all times during the term of the MINING USER

CONTRACT and the ANCILLARY AGREEMENTS act reasonably,

honestly and in good faith;

27.2.2

they will perform their obligations arising from the MINING USER

CONTRACT and the ANCILLARY AGREEMENTS diligently and

with reasonable care; and

27.2.3 they will make full disclosure to each other of any matter that may

affect the execution of the MINING USER CONTRACT and the

ANCILLARY AGREEMENTS or their implementation from time to

time.

28. Whole Agreement, No Amendment

28.1 The MINING USER CONTRACT , as read with the ANCILLARY

AGREEMENTS and the TERM SHEET, constitute the whole agreement

between the PARTIES relating to the subject matter hereof.

28.2 No amendment or consensual cancellation of the MINING USER CONTRACT

or any provision or term hereof or of any agreement or other document issued

or executed pursuant to or in terms of the MINING USER CONTRACT and no

settlement of any disputes arising under the MINING USER CONTRACT and

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no extension of time, waiver or relaxation or suspension of any of the

provisions or terms of the MINING USER CONTRACT or of any agreement or

other document issued pursuant to or in terms of the MINING USER

CONTRACT shall be binding unless recorded in a written document signed by

the PARTIES (or in the case of an extension of time, waiver or relaxation or

suspension, signed by the PARTY granting such extension, waiver or

relaxation). Any such extension, waiver or relaxation or suspension which is so

given or made shall be strictly construed as relating strictly to the matter in

respect whereof it was made or given.

28.3 No extension of time or waiver or relaxation of any of the provisions or terms of

the MINING USER CONTRACT or any agreement or other document issued or

executed pursuant to or in terms of the MINING USER CONTRACT, shall

operate as an estoppel against any PARTY in respect of its rights under the

MINING USER CONTRACT, nor shall it operate so as to preclude such

PARTY thereafter from exercising its rights strictly in accordance with the

MINING USER CONTRACT.

29. General

29.1

No PARTY shall have any claim or right of action arising from any undertaking,

representation or warranty not included in the MINING USER CONTRACT or

the TERM SHEET.

29.2 No failure by a PARTY to enforce any provision of the M INING USER

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PARTY’s right to require performance of any such provision at any time in the

future, nor shall the waiver of any subsequent breach nullify the effectiveness

of the provision itself.

29.3 Save as provided elsewhere in this agreement to the contrary no PARTY may

cede any of its rights or delegate any of its obligations under the MINING

USER CONTRACT.

29.4 Each PARTY warrants that it is acting as a principal and not as an agent for an

undisclosed principal and in the case of the ELSBURG JV, on behalf of the

joint venture partners.

30.

Counterparts

The MINING USER CONTRACT may be signed in separate counterparts, each of

which shall be deemed to be an original and all of which taken together shall constitute

one and the same instrument. A counterpart of the MINING USER CONTRACT in

telefax form shall be conclusive evidence of the original signature and shall be as

effective in law as the counterparts in original form showing the original signatures.

31.

TERM SHEET

31.1 It is recorded that the MINING USER CONTRACT constitutes one of many

agreements to be executed pursuant to the TERM SHEET.

31.2 Notwithstanding anything to the contrary hereinbefore contained, upon the

SIGNATURE DATE, the TERM SHEET shall, to the extent that it impacts upon

the MINING USER CONTRACT and may be in conflict therewith, be deemed

superseded by the ERPM/ERGO MINING USER CONTACT save that to the

extent any dispute may arise in regard to the MINING USER CONTRACT then

from an historical perspective, cognisance shall be taken of the TERM SHEET

in order to determine the intentions of the PARTIES at the time of the

conclusion thereof.

Thus done and signed by CROWN at Johannesburg on this the 15

day of August 2008, in

the presence of the undersigned witnesses.

As witnesses:-

For: Crown Gold Recoveries (Proprietary)

Limited

/s/T Gwebu
director

Thus done and signed by ERPM at Johannesburg on this the 15

day of August 2008, in the

presence of the undersigned witnesses.
As witnesses:-

For: East Rand Proprietary Mines Limited

/s/T Gwebu
director

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- director -

Thus done and signed by the ELSBURG JV at Johannesburg on this the 15

day of August

2008, in the presence of the undersigned witnesses.

As witnesses:-

For: Elsburg Gold Mining Joint Venture

/s/ D Pretorius

/s/ DAW van der Xxxx - directror

- duly authorised signatories -

Thus done and signed by ERGO MINING at Johannesburg on this the 15

day of August

2008, in the presence of the undersigned witnesses.

As witnesses:-

For: Ergo Mining (Proprietary) Limited

/s/ XX Xxxxxxx

- director -

Thus done and signed by ERGO URANIUM at Johannesburg on this the 15

day of August

2008, in the presence of the undersigned witnesses.

As witnesses:-

For: Ergo Uranium (Proprietary) Limited

/s/ DAW van der Xxxx

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Thus done and signed by MOGALE at Johannesburg on this the 15

day of August 2008, in

the presence of the undersigned witnesses.

As witnesses:-

For: Mogale Gold (Proprietary) Limited

/s/ DAW van der Xxxx

- director -

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Memorandum of Agreement

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