BACKGROUND INFORMATION DOCUMENT & INVITATION TO COMMENT JULY 2015

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1 Introduction EOH Coastal & Environmental Services has been appointed by K (South Africa) (Pty) Ltd (Reg No. 2014/173145/07), to undertake the Public Participation Process and associated Basic Assessment and Environmental Management Programme Report (EMPr) relevant to the Prospecting Application (REF: NC30/5/1/1/2/11643PR), as required in terms of section 16 read together with regulation 7 (1) of the Mineral and Petroleum Resources Development act (Act 28 of 2002). Locality The project area is situated in one district and two local municipal areas. The proposed site for prospecting is situated within the Pixley ka Seme District Municipality and partially within the Siyathemba Local Municipality and partially within the Kareeberg Local Municipality. The Siyathemba local municipality consist of 5 towns namely E'Thembeni, Marydale, Niekerkshoop, Prieska and Westerbergwhile the Kareeberg local municipality consist of 3 towns namely Carnarvon, Van Wyksvlei and Vosburg. Prospecting for Copper, Lead, Zinc, Gold and Silver is proposed on a portion of Portion 1 (RE), a portion of Portion 2(RE), a portion of Portion 4, a portion of Portion 5 and a portion of Portion 6 of the farm Markt 41; Portions 1, 2, 3, 4, 5 and Remaining Extent of the Farm Klein Doorn Pan 133, Portions 1, 2, 3, 4, 5, 6, 7, 8 and Remaining Extent of the Farm Groot Doornpan 132; Portions 1(RE), 2(RE), 3(RE), 4, 5 and the Remaining Extent of the Farm Jonkerwater 121, Portions 1, 3 and the Remaining Extent of the Farm Kaffirs Kolk 118; Portions 1, 2 and the Remaining Extent of the Farm Granaatkop 120; Portion 2 of the Farm Springbok Poortje 119; a portion of Farm 151; a portion of the Remaining Extent of the Farm Plat Sjambok 102; Portions 2 and 4 of the Farm Naauwe Kloof 122; Portion 1 and the Remaining Extent of the Farm Middelwater 99; Portions 1, 2, 3, 4 and the Remaining Extent of the Farm Roodevloer 123; and a portion of Portion 1, a portion of Portion 2 and a portion of Portion 4 of the Farm Zout Pekel 98, Magisterial District of Carnarvon and Prieska, Northern Cape Province (Figure 1). The proposed site covers approximately 105,273 hectares. Project overview It is envisaged that the exploration/prospecting programme will include Airborne Geophysical Surveys (non-invasive), Drilling, Logging, Sampling, Analyses (invasive) and Geological Modelling and Resource Estimation (non-invasive) over a phased 5 year period. Phase 1 (12 months) will consist of non-invasive geological, geochemical and geophysical surveys. Phase 2 (24 months) will consist of invasive drilling to test targets identified during Phase 1 using the diamond core drilling method. This phase will include logging, sampling, analysis and rehabilitation of drill sites. Phase 3 (24 months) will consist of drilling aimed at establishing a measured resource and will include logging, sampling, analysis and rehabilitation of drill sites. Results and findings of Phase 2 will determine the possibility of continuing to Phase 3. 1 P a g e

2 PUBLIC CONSULTATION, BASIC ASSESSMENT AND EMPr FOR THE PROSPECTING RIGHT CARNARVON AND PRIESKA, NORTHERN CAPE PROVINCE. Figure 1: Google Earth Image of the proposed Prospecting Right (demarcated in red) approximately 63km southwest of the town of Prieska in the Northern Cape. 2 Page

3 Legislative framework A prospecting right triggers activity 20 contained in Listing Notice 1 (GNR 983) of the EIA Regulations (2014). The competent authority for the application of a prospecting right as well as the application for environmental authorisation (for the basic assessment process) is the Department of Mineral Resources (DMR) in the Northern Cape. According to the Minerals and Petroleum Resource Development Act (Act No. 28 of 2002), prospecting is defined as follows: The intentional searching of any mineral be means of any method - a) Which disturbs the surface or the subsurface of the earth including any portion of earth that is under the sea or under water, or b) In or on any residue stockpile or residue deposit of any mineral to determine the extent and the economical value, or c) In the sea or other water on land. Other relevant legislation includes the following: National Environmental Management: Air Quality Act (Act 39 of 2004) with subsequent amendments and Regulations; National Environmental Management Act, (Act 107 of 1998); with subsequent amendments and Regulations National Environmental Management: Biodiversity Act (Act 10 of 2004) National Heritage Resources Act, (Act 25 of 1999); National Veld and Forest Fire Act, (Act 101 of 1998); National Water Act, (Act 36 of 1998); Occupational Health and Safety Act, (Act 85 of 1993). It should be noted that this consultation process is part of a legislated authorisation process for prospecting rights and that prior to the undertaking of any prospecting activity that may impact upon the environment; authorisation must be obtained from the Department of Mineral Resources (DMR). The process to obtain prospecting rights is prescribed in the Mineral and Petroleum Resources Development Act [MPRDA] (Act No. 28 of 2002). This should be read in conjunction with the National Environmental Management Act (Act 107 of 1998). Public Consultation, Basic Assessment and Environmental Management Plan process Public consultation The purpose of the public consultation process is to enable land owners, lawful occupiers, directly affected individuals, and / or other Interested and Affected Parties (I&APs) to raise any issues, concerns and / or comments regarding the proposed prospecting activities. The proposed project will be advertised in a locally distributed newspaper to inform people about the project and request them to identify environmental issues. Notices will also be erected on site. 3 P a g e

4 A Proof of Consultation report will be compiled and submitted to the Department of Mineral Resources (DMR). It should be noted that the Proof of Consultation Report does not include detailed verifications of issues of concern but provides recommendations with regard to any fatal flaws that may restrict and / or limit any prospecting activities. The prospecting Basic Assessment (BA) and EMPr will be developed according to the DMR Guideline document ensuring that all the relevant aspects pertaining to the environment will be addressed. The potential impacts associated with the proposed prospecting activities will be quantified as part of this assessment. The report will provide an overview of the anticipated impacts expected from the proposed prospecting activities and whether feasible alternatives and / or mitigations could be implemented to minimise such impacts to acceptable standards. The contents and findings of the report will be submitted to DMR for review and assessment prior to the issuing of an Environmental Authorisation (EA) regarding the Prospecting Right Application (PRA). Public Participation is legislated according to NEMA. All REGISTERED I&APs will be informed of the availability of the Draft Basic Assessment report and EMPr and be afforded 30 days to comment on the reports. All comments will be included in the Final reports submitted to the DMR. Potential Environmental Impacts The following preliminary environmental issues have been identified and will be investigated during the prospecting right application process: Impact of the drilling activities and infrastructure on the physical environment; Loss of sense of place by surrounding property owners; Surface and groundwater pollution, as a result of drilling activities and construction equipment; Contamination of soils as a result of spillages or leakages; and Loss of biodiversity. Prospecting operations are typically small-scale and disturbance to the environment and farming activities are minimal. It is also a requirement that the areas that are disturbed are rehabilitated to their pre-prospecting condition. The prospecting right process As per the regulations, a Prospecting Right (PR) application and the Environmental Authorization (EA) application has been lodged simultaneously with the Department of Mineral Resources (DMR) and was accepted on 12 th of June The acceptance of the application requires the applicant to consult with interested and affected parties and submit the results thereof to the DMR together with other documentation within 30 days from the acceptance of the application. Once DMR reviews the submissions (i.e. BAR and EMPr) and either accepts or rejects the prospecting application depending on its merits; a prospecting right is issued or rejected. Also included in this application is the submission of a prospecting Basic Assessment Report and EMPr, to be submitted within 90 days from submission of the application. 4 P a g e

5 Invitation to comment Should you wish to express your views regarding this proposed development, please send us your written comments. The names of all registered I&APs, together with the comments received will be incorporated into the Comments and Responses Report and will be submitted to DMR. Please submit your name, contact information (residential address, telephone number, address, postal address) and written comments to the contact person below. Contact Mrs Kim Brent 13 Stanley Street, Richmond Hill, Port Elizabeth, 6070 Mobile: Tel: Fax: Website: / 5 P a g e