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CONCEPTUAL PLANT DESIGN WORK HAS COMMENCED TO NOW INCORPORATE A URANIUM RECOVERY CIRCUIT INTO THE WERGO GOLD PLANT. DUE TO THE FACT THAT MINTAILS ACQUIRED SUBSTANTIAL PLANT AND EQUIPMENT FROM ANGLOGOLD ASHANTI'S ERGO OPERATIONS, MINTAILS COULD BE IN A POSITION TO COMMENCE PRODUCTION BY OCTOBER 2008.

ERGO MINES JV

The most successful tailings operation in South African history was the AngloGold Ashanti-owned, East Rand Gold and Uranium operation ("ERGO"). Over its 25 year life, ERGO processed approximately 914 million tonnes of slimes tailings and recovered over 8.3m ounces of gold and ~ 2,500 tonnes of uranium through two highly efficient tailing treatment plants, known as the Brakpan and East Daggafontein Plant (East Dagga).

The first of the ERGO facilities to be constructed was the Brakpan plant which processed gold, uranium and sulphuric acid. Initially the process relied on floatation methodology. As mineral processing technology advanced AngloGold Ashanti constructed and incorporated a large scale Carbon In Leach (CIL) plant at Brakpan which subsequently became the world standard for the treatment of gold tailings. AngloGold Ashanti then built the East Dagga Gold Plant based on the model previously constructed at Brakpan.

The merger between Mintails and SGM which delivered the ERGO facilities to Mintails has provided the leverage Mintails needed to secure further tailings dumps. Accordingly as Mintails now owns the ERGO infrastructure it has used this position to secure additional tailings resources substantially increasing its scale of operations.

In June 2007, Mintails announced the formation of the East Rand gold tailings treatment joint venture with DRDGold. In November 2007 Mintails announced it had signed a binding Term Sheet which provided for significant expansion of the joint venture, through:

• Substantially increasing available tailings material from 195 million tonnes up to 1.7 billion tonnes (an increase of almost 9 times) through securing rights over tailings dumps and slimes dams in the region.
• a planned refurbishment of all infrastructure over the next 36 months at the Brakpan ERGO Plant to increase capacity from one CIL gold recovery circuit (as announced in June 2007) to a significantly larger plant, capable of processing tailings for recovery of gold, uranium and sulphuric acid.

The expanded JV plans to explore, evaluate and process up to approximately 1.7 billion tonnes of surface gold, uranium and sulphur tailings on the East and Central Rand of South Africa's Witwatersrand Basin and utilize the full ERGO Plant, which historically produced gold, uranium and sulphuric acid. Mintails and DRDGold together with their BEE partners will each have a 50% ownership interest in the JV.

Through this expansion the JV partners have endorsed the strategy to pursue a consolidation of all their available and unexploited surface uranium and gold assets on the Central and East Rand. In addition, arrangements have been negotiated to further augment this asset base through:

• The acquisition by the JV of additional tailings properties and the Withok deposition complex from Anglogold Ashanti for a payment of ZAR 45 million (approx. AUD .6m) and assumption of rehabilitation obligations.
• The acquisition by Mintails of an option to acquire tailings properties (the "Grootvlei Properties) (comprising some 105 mts) from Pamodzi Gold Limited which is the subject of a separate announcement today and which properties will form part of Mintails contribution to the expanded JV.

The expanded JV will pursue feasibility studies to refurbish and reopen the entire ERGO plant which was acquired by Mintails in 2006. The acquisition of the Withok deposition site will provide the expanded JV with extensive additional deposition capacity commensurate with the substantial increases in tailings material and processing capacity.

Phase I of the JV involves the refurbishment of one CIL circuit at the ERGO Plant with the capacity to treat an estimated 15 million tonnes of tailings per annum, for the recovery of some 75,000 ounces of gold per annum. Phase II of the project, now under investigation, envisages the expansion of the gold plant by refurbishing the second CIL circuit and the development of uranium and acid plants which are envisaged to have a design capacity to produce an estimated 150,000 ounces of gold, 660,000 pounds of uranium and 855,000 tonnes of sulphuric acid per annum.

The parties intend to commission a feasibility study prior to full implementation of the JV. The arrangements between the JV partners have been structured to provide for the contribution of assets to the JV operation on a 50:50 basis. Further capex contributions for full implementation of the expanded JV are likely and the quantification of those amounts will be part of the commissioned feasibility process.

The JV is subject to regulatory review, completion of definitive agreements and corporate and other approvals.

The rationale behind creating the far more substantial ERGO Mines JV;

• The JV will own the right to process and extract uranium, gold and sulphur from approximately 1,700 million tonnes of tailings materials. Initial project sketching forecast large scale production with life of mines substantially in excess of 20 years. The majority of the large tailing sites have never been treated for recovery of uranium or sulphuric acid.
• The potential for managing the gold, uranium and sulphuric acid processes as an integrated circuit will allow for the realization of significant operational synergies and savings.
• The processing techniques to be used at the ERGO Plant have been proven and tested over 27 years. The technology to be used has low implementation risk, allowing shorter timeframes to increased production.
• The ERGO Plant is in close proximity to the large available tailings materials, deposition sites and the servitudes for transport which have been secured. In addition, valuable by-products such as sulphuric acid and electricity co-generation are available providing the ERGO Mines JV with lower risk on key cost inputs and estimated cash costs in the lowest quartile.