Founded by Rutendo Mining and the Pouroulis family in Two advanced development projects, pipeline of exploration prospects

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1 Disclaimer All statements in this presentation, other than historical facts, that address exploration activities and mining potential are forward-looking statements. Although Keaton Energy believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements should not in any way be construed as guarantees of future performance. Factors that could cause developments to differ materially from those expressed include exploration results, technical analysis and lack of availability to the company of necessary capital to progress its projects. The company is subject to specific risks inherent in the exploration and mining business and general economic and business conditions. 2 1

2 Who we are Salient features New SA coal explorer and developer Impetus increase in demand for coal changed SA mineral rights dispensation Founded by Rutendo Mining and the Pouroulis family in 26 Two advanced development projects, pipeline of exploration prospects Listed on the JSE main board on 22 April, 28 after a Rm private placing at R per share 142 million shares in issue, R4 million in treasury post listing 3 Share price performance 4 2

3 Structure The Group structure has been designed from inception to fully comply with the requirements of the MPRDA and the Mining Charter 5 Why coal? Export coal prices 12 US$/t FOB Richards Bay South African Spot Coal Index (Barlow Jonker) Average Monthly Achieved Export Price (DME: Minerals Economics) 2 Jan-3 Apr-3 Jul-3 Oct-3 Jan-4 Apr-4 Jul-4 Oct-4 Jan-5 Apr-5 Jul-5 Oct-5 Jan-6 Apr-6 Jul-6 Oct-6 Jan-7 Apr-7 Jul-7 Oct-7 Jan-8 Spot export prices increased dramatically late last year Achieved prices are expected to follow spot prices, but are likely to be less volatile 6 3

4 Why coal? SA coal export markets tons Europe Middle East North Africa Indian Sub-continent East Asia South America SA Indian Ocean Islands Part of the movement in spot prices can be explained by sub-continent buyers switching from the Pacific market to the Atlantic market, a trend expected to continue 7 Source: Barlow Jonker Why coal? Relative cost of coal 45 United Kingdom - Oil, Gas and Coal Prices for Electricity Generation (US$/tons oil equivalent) Q1'3 Q2'3 Q3'3 Q4'3 Q1'4 Q2'4 Q3'4 Q4'4 Q1'5 Q2'5 US$/toe Q3'5 Q4'5 Q1'6 Q2'6 Q3'6 Q4'6 Q1'7 Q2'7 Source: IEA High Suphur Fuel Oil Natural Gas Steam Coal 8 Coal remains a cost competitive choice relative to other thermal power generation fossil fuels 4

5 Why coal? RBCT capacity utilisation Exports via RBCT have declined in recent years, while RBCT capacity has increased 9 Why coal? RBCT capacity utilisation The absence of inland export quality surpluses, resulting in near export parity pricing for export coal in the inland market, and Transnet s improving performance suggests that existing producers are unable to meet current demand for export quality coal 5

6 Why coal? Inland coal consumption 27 consumption for 12 months to October Eskom s emergency coal purchases in 28 are expected to squeeze the 2 million ton residual domestic market, with prices already reported to have increased dramatically 11 Why coal? Inland coal prices 1 9 Rand/ton FOR Steam Coal Source: Department of Minerals and Energy Minerals Economics Statistics on inland coal prices are limited and average achieved prices reported to the DME include both: contractual cost plus prices (7%-8% of coal sold) which are not market related; market related spot prices (2%-3% of coal sold) which are market related 12 6

7 Our projects Locations Bela-Bela 29º Mokopane 3º PRETORIA Middleburg South Africa Belfast N1 N N14 WITBANK Duvha 26 º JOHANNESBURG N12 26 º Kendal Hendrina Delmas DELMAS PROJECT R36 N11 Matla Kriel N3 Heidelburg N11 STERKFONTEIN PROJECT Bethal Mbabane 3 km Secunda ERMELO Piet Retief Grootvlei Tutuka R36 Harrismith 29º Standerton Volkrust 3º 13 Our projects Delmas ha property, 6 m drilled, 91 boreholes included in resource statement A further 33 holes completed 1 m Scoping study suggests a multi-product mine producing 25 tons ROM per month from three open pits Drill hole data included in resource statement Holes drilled subsequently Regional paved roads Water course Power line Illustrative cross section 14 7

8 Delmas North South schematic cross section Avg 1.32m No.5 Seam Surface topography Avg 14.41m Avg 5.8m No.4 Seam Avg 8.5m Avg 5.4m No.2 Seam Not to scale 15 Paeleo floor Delmas May 28 resource statement Resource area No. 2 Seam No. 4 Seam No. 5 Seam Total Mineable tonnes Bituminous Mineable tonnes Pseudo anthracite None An application for a Mining Right is to be submitted on 31 March 28 Mining to begin one year later 16 8

9 Our projects Sterkfontein North South Drill hole data included in resource statement Illustrative cross section 4 9 ha property, 25 m drilled, 132 boreholes included in resource statement results indicate better than expected yields significant portion may be low phosphorous suitable for metallurgical market each of Sterkfontein North and Sterkfontein South would support a shaft complex m Sterkfontein North schematic cross section Surface topography Avg 132m Avg 3m Avg 1.87m Avg 3.m No.3 Seam marker Parting No.4 Seam Not to scale 18 9

10 Our projects Sterkfontein Mineable coal resources* for No. 4 seam North North 1 North 2 South North 1: Indicated: 3.4 Mt North 2: Indicated: 14.1 Mt South: Measured: 17.3 Mt Total coal resource of 34.8 Mt 19 Our projects Amalahle prospects Granted in April hectares over six discrete properties R3.5 million exploration programme to begin in June 28 2

11 Exploration pipeline Ellisras Waterberg prospect Waterberg Coalfield: application for prospecting rights over 1 189ha Johannesburg Utrecht Utrecht prospect Utrecht Coalfield: application for prospecting rights over 5 887ha Dundee Klip River prospect Klip River Coalfield: application for prospecting rights over 4 914ha Keaton Mining has submitted prospecting right applications over an exploration pipeline totaling 56 99ha in three different South African coalfields 21 Our plan Access, partners acquire contiguous coal prospecting permits from other parties partner BEE players in new coal prospecting permit applications Capital seed capital raised in November 27 listing and further capital raised in April 28 trade began 22 April 28 Delmas mining right application March 28 Production early

12 The investment case Sound regulatory environment company design from inception to be fully compliant with new Mineral Rights dispensation Strong, experienced team Sufficient capital to get into production R4m in treasury at listing Excellent projects and prospects in the right locations good product spread active exploration pipeline rapid exploration/development/production trajectory 23 No better time for coal in SA and internationally with robust domestic and export markets 12