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Buffalo Coal Corp - Management Information Circular

Release Date: 01/06/2015 15:20:00      Code(s): BUC     
BUFFALO COAL CORP.
(REGISTRATION NUMBER: 001891261)
(EXTERNAL COMPANY REGISTRATION NUMBER: 2011/011661/10)
SHARE CODE ON THE TORONTO STOCK EXCHANGE: BUF
SHARE CODE ON THE JSE LIMITED: BUC
ISIN: CA1194421014

MANAGEMENT INFORMATION CIRCULAR
May 19, 2015

BUFFALO COAL CORP.

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that an annual and special meeting (the ?Meeting?) of the
shareholders of Buffalo Coal Corp. (the "Corporation") will be held at the offices of Baker & McKenzie
LLP, Brookfield Place, Bay/Wellington Tower, 181 Bay Street, Suite 2100, Toronto, Ontario M5J 2T3
on June 19, 2015, at 10:00 a.m. (Toronto time) for the following purposes:

1.     To receive and consider the audited financial statements of the Corporation as at and for the
       financial year ended December 31, 2014 and the report of the auditors thereon;

2.     To fix the number of directors of the Corporation at five;

3.     To elect directors of the Corporation for the ensuing year;

4.     To appoint McGovern, Hurley, Cunningham, LLP as auditors of the Corporation for the
       ensuing year and to authorize the directors to fix their remuneration;

5.     To pass an ordinary resolution of disinterested shareholders of the Corporation to approve an
       amendment to the Corporation?s Stock Option Plan to increase the rolling maximum number of
       common shares issuable thereunder, and under any other security based compensation
       arrangements of the Corporation, from 10% to 20% of the outstanding common shares;

6.     To pass an ordinary resolution of disinterested shareholders of the Corporation authorizing the
       issuance of common shares to settle (a) performance bonuses to certain employees of the
       Corporation and (b) a previously allocated restricted share unit award to the Chairman of the
       Corporation;

7.     To pass an ordinary resolution of disinterested shareholders of the Corporation authorizing
       (a) the amendment of an existing US$25 million convertible loan facility with Resource Capital
       Fund V L.P. (?RCF?) to, among other things, (i) increase the principal amount from US$25 million
       to US$29 million to account for a new US$4 million secured loan from RCF, (ii) increase the
       interest rate under the amended and restated US$29 million convertible loan facility (the
       ?Amended and Restated RCF Loan Facility?) from 12% to 15%, and (iii) decrease the
       conversion price of the principal amount of the Amended and Restated RCF Loan Facility from
       C$0.1446 to C$0.0469; and (iv) the issuance of common shares to RCF (not previously
       authorized for issuance) in satisfaction of the conversion of principal amounts of, and interest
       payments under, the Amended and Restated RCF Loan Facility; and

8.     To transact such further or other business as may properly come before the Meeting or any
       postponement(s) or adjournment(s) thereof.

The board of directors of the Corporation recommends that shareholders vote IN FAVOUR of the
resolutions described above. This notice is accompanied by a management information circular which
details the matters proposed to be put before the Meeting.

If you are a registered shareholder and are unable to attend the Meeting in person, please complete,
date, sign and return the enclosed form of proxy so that as large a representation as possible may be
present at the Meeting. If you are a beneficial or non-registered shareholder and receive these
materials though your broker or another intermediary, please complete and return the materials in
accordance with the instructions provided by your broker or intermediary.
The board of directors of the Corporation has by resolution fixed the close of business on May 19,
2015 as the record date, being the date for the determination of the registered holders of common
shares entitled to notice of and to vote at the Meeting and any adjournment(s) thereof.

The board of directors of the Corporation has by resolution fixed 10:00 a.m. (Toronto time) on June 17,
2015 or 48 hours (excluding Saturdays, Sundays and holidays) before any adjournment(s) of the
Meeting, as the time by which proxies to be used or acted upon at the Meeting or any adjournment(s)
thereof shall be deposited with the Corporation?s transfer agent, in accordance with the instructions set
forth in the accompanying management information circular and the form of proxy, as applicable.

DATED at Toronto, Ontario as of the 19th day of May, 2015.


BY ORDER OF THE BOARD OF DIRECTORS

Craig Wiggill
Chairman


INFORMATION REGARDING CONDUCT OF MEETING

Solicitation of Proxies

This management information circular (?Circular?) is furnished in connection with the solicitation
by the management of Buffalo Coal Corp. (?Buffalo Coal? or the ?Corporation?) of proxies to be
used at the annual and special meeting (the ?Meeting?) of holders (?Shareholders?) of common
shares in the capital of the Corporation (?Common Shares?) to be held on June 19, 2015 and at
any postponement(s) or adjournment(s) thereof for the purposes set forth in the accompanying
notice of meeting (?Notice of Meeting?). References in this Circular to the ?Meeting? include references
to any postponement(s) or adjournment(s) thereof. It is expected that the solicitation will be primarily by
mail but proxies may also be solicited through other means by employees, consultants and agents of the
Corporation. The cost of solicitation by management will be borne by the Corporation.

The board of directors of the Corporation (the ?Board?) has by resolution fixed the close of business on
May 19, 2015 as the record date for the Meeting (the ?Record Date?), being the date for the
determination of the registered holders of Common Shares entitled to notice of and to vote at the Meeting
and any adjournment(s) thereof. The Board has by resolution fixed 10:00 a.m. (Toronto time) on June 17,
2015, or 48 hours (excluding Saturdays, Sundays and holidays) before any adjournment(s) of the
Meeting, as the time by which proxies to be used or acted upon at the Meeting or any adjournment(s)
thereof shall be deposited with the Corporation?s transfer agent. The proxy cut-off time may be waived or
extended by the Board or a person authorized by the Board in its sole discretion without notice.

These security holder materials are being sent to both registered Shareholders and non-registered
holders of Common Shares (the ?Non-Registered Shareholders?). If you are a Non-Registered
Shareholder, and the Corporation or its agent has sent these materials directly to you, your name and
address and information about your holdings of securities have been obtained in accordance with
applicable securities regulatory requirements from the Intermediary (as defined herein) holding on your
behalf. By choosing to send these materials to you directly, the Corporation (and not the Intermediary
holding on your behalf) has assumed responsibility for (i) delivering these materials to you, and (ii)
executing your proper voting instructions. Please return your voting instructions as specified in the
request for voting instructions.

The Corporation shall make a list of all persons who are registered Shareholders on the Record Date and
the number of Common Shares registered in the name of each person on that date. Each Shareholder is
entitled to one vote on each matter to be acted on at the Meeting for each Common Share registered in
his name as it appears on the list.

Unless otherwise stated, the information contained in this Circular is as of the Record Date. This Circular
contains references to United States dollars, Canadian dollars and South African Rands. Canadian
dollars are referred to herein as ?$? or ?C$?. United States dollars are referred to as ?US$?. South African
Rands are referred to herein as ?R?.

Appointment and Revocation of Proxies

The persons named in the enclosed form of proxy are officers and/or directors of the Corporation. A
Shareholder desiring to appoint some other person or entity to represent him at the Meeting may
do so by inserting such person's name in the blank space provided in that form of proxy or by completing
another proper form of proxy and, in either case, depositing the completed proxy at the office of the
transfer agent of the Corporation indicated on the enclosed envelope not later than the times set out
above.

In addition to revocation in any other manner permitted by law, a Shareholder may revoke a proxy given
pursuant to this solicitation by depositing an instrument in writing (including another proxy bearing a later
date) executed by the Shareholder or by an attorney authorized in writing at Baker & McKenzie LLP,
Brookfield Place, Bay/Wellington Tower, 181 Bay Street, Suite 2100 Toronto, Ontario M5J 2T3, at any
time up to and including the last business day preceding the day of the Meeting.

Voting of Proxies

Common Shares represented by properly executed proxies in favour of persons designated in the printed
portion of the enclosed form of proxy will be voted for each of the matters to be voted on by
Shareholders as described in this Circular, withheld from voting or voted against if so indicated
on the form of proxy and in accordance with the instructions of the Shareholder on any ballot that
may be called for. In the absence of such election, the form of proxy will confer discretionary
authority to be voted in favour of each matter set out in the form of proxy for which no choice has
been specified. The enclosed form of proxy confers discretionary authority upon the persons named
therein with respect to amendments or variations to matters identified in the Notice of Meeting or other
matters which may properly come before the Meeting. At the time of printing this Circular, management of
the Corporation knows of no such amendments, variations or other matters to come before the Meeting.
However, if any other matters that are not now known to management should properly come before the
Meeting, the proxy will be voted on such matters in accordance with the best judgement of the named
proxies.

Non-Registered Shareholders

Only registered Shareholders or the persons they appoint as their proxies are permitted to vote at the
Meeting. However, in many cases, shares beneficially owned by a Non-Registered Shareholder are
registered either: (i) in the name of an intermediary with whom the Non-Registered Shareholder deals in
respect of the Common Shares such as, among others, banks, trust companies, securities dealers or
brokers and trustees or administrators of self-administered RRSPs, RRIFs, RESPs and similar plans
(an ?Intermediary?); or (ii) in the name of a clearing agency (such as CDS & Co., of which the
Intermediary is a participant). In accordance with the requirements of National Instrument 54-101 -
Communication with Beneficial Owners of Securities of a Reporting Issuer of the Canadian Securities
Administrators, the Corporation will distribute copies of the Notice of Meeting, form of proxy and this
Circular to the clearing agencies and Intermediaries for onward distribution to Non-Registered
Shareholders.

Intermediaries are then required to forward the materials to the appropriate Non-Registered
Shareholders. Non-Registered Shareholders will be given, in substitution for the proxy otherwise
contained in proxy-related materials, a request for voting instructions (the ?Voting Instructions Form?)
which, when properly completed and signed by the Non-Registered Shareholder and returned to the
Intermediary, will constitute voting instructions which the Intermediary must follow.

The purpose of this procedure is to permit Non-Registered Shareholders to direct the voting of the
Common Shares they beneficially own. Should a Non-Registered Shareholder who receives the Voting
Instructions Form wish to vote at the Meeting in person (or have another person attend and vote on
behalf of the Non-Registered Shareholder), the Non-Registered Shareholder should so indicate in the
place provided for that purpose in the Voting Instructions Form and a form of legal proxy will be sent to
the Non-Registered Shareholder. In any event, Non-Registered Shareholders should carefully follow the
instructions of their Intermediary set out in the Voting Instructions Form.
                                                   
Voting Securities and Principal Holders Thereof

The authorized capital of the Corporation consists of an unlimited number of Common Shares. As of May
19, 2015, the Corporation had 76,189,986 Common Shares issued and outstanding, each carrying the
right to one vote.

Only Shareholders of record as of the Record Date will be entitled to vote in person or by proxy at the
Meeting and any adjournment thereof.

To the knowledge of the directors and officers of the Corporation, as at May 19, 2015, no person
beneficially owns, directly or indirectly, or exercises control or direction over securities carrying more than
10% of the voting rights attached to the Common Shares, other than Resource Capital Fund V L.P.
(?RCF?) which holds 50,021,394 Common Shares representing 65.65% of the Corporation?s issued and
outstanding share capital.

Interests of Persons in Matters to be Acted Upon

Other than as disclosed herein, no director or executive officer of the Corporation, nor any person who
had held such a position since the beginning of the last completed financial year end of the Corporation,
nor any respective associates or affiliates of the foregoing persons has any material interest, direct or
indirect, by way of beneficial ownership of securities or otherwise in any matter to be acted upon at the
Meeting.

RCF, located at 1400 Sixteenth Street, Suite 200, Denver, CO, USA 80202, has an interest in the Bridge
Loan and Amended and Restated RCF Loan, as defined herein. See ?Matters to be Considered ? RCF
US$29 Million Convertible Loan Facility.? As of May 19, 2015, RCF holds 50,021,394 Common Shares
representing 65.65% of the Corporation?s issued and outstanding share capital. Mr. David Thomas is a
member of the Board nominated by RCF. Mr. Thomas declared his interest and abstained from any
Board discussions or votes with respect to the Bridge Loan and Amended and Restated RCF Loan (as
defined herein).

Change of Name and Change of Year End

On July 4, 2014, as part of a restructuring process, the Corporation changed its name from ?Forbes &
Manhattan Coal Corp.? to ?Buffalo Coal Corp.?, and the Corporation and its subsidiaries changed their
financial year ends from February 28 to December 31. The phrase ?financial year ended December 31,
2014?, when used herein, refers to the ten months ended December 31, 2014.

Statement of Executive Compensation

Overall Compensation Philosophy

The general objectives of the Corporation?s executive compensation are to:

        (a)      attract, retain and motivate executives critical to the success of the Corporation;

        (b)      provide rewards, through discretionary bonuses, for outstanding corporate and individual
                 performance; and

        (c)      link the interests of management with those of the Shareholders through long term
                 incentive plans.

The Corporation has adopted a more formal policy for awarding bonuses for the future. See
?Compensation Discussion and Analysis ? Bonus Payments?.
                                                     
Additionally, the following principles guide the Corporation?s overall approach to compensation:

        (a)     compensation is determined on an individual basis by the need to attract and retain
                talented, entrepreneurial, high-achievers;

        (b)     an appropriate portion of total compensation is variable and linked to achievements, both
                individual and corporate;

        (c)     all compensation and compensation objectives shall be fully and plainly disclosed; and

        (d)     the Company?s overall financial position.

In addition, the Corporation completed a benchmarking exercise during fiscal year 2014 and intends to
use benchmarking against industry comparable data in determining compensation in the future. See
?Compensation Discussion and Analysis?.

Compensation Governance

The Compensation Committee is established by the Board to assist the Board in fulfilling its
responsibilities relating to human resources and compensation issues and to establish a plan of continuity
for executive officers and other members of senior management. The Compensation Committee has
adopted a charter setting out the duties and responsibilities of the committee, with the primary function to
assist the Board in fulfilling its oversight responsibilities by:

    -   reviewing and approving and then recommending to the Board salary, bonus, and other benefits,
        direct or indirect, and any change-of-control packages of the Chief Executive Officer (?CEO?);

    -   considering and approving the recommendation of the CEO on the salary, bonus, and other
        benefits, direct or indirect, and any change-of-control packages of the Chief Financial Officer
        (?CFO?) and Chief Operating Officer, as applicable

    -   reviewing compensation of the Board on at least an annual basis;

    -   administrating the Corporation?s compensation plans, including stock option plans, outside
        directors? compensation plans, and such other compensation plans or structures as are adopted
        by the Corporation from time to time;

    -   researching and identifying trends in employment benefits; and

    -   establishing and periodically reviewing the Corporation?s policies in the area of management
        benefits and perquisites based on comparable benefits and perquisites in the mining industry.

Through their previous work experiences, each member of the Compensation Committee has developed
the necessary skills and experience that are relevant to the mandate of the Compensation Committee
and their qualifications are set out below.

David Thomas (Chairman) - Mr. Thomas, P.Geo., is Managing Director (Canada) for RCF Management
(Toronto) Inc. Prior to joining RCF in 2010, Mr. Thomas spent 15 years in investment banking as a mining
analyst and as an institutional equity salesperson. Mr. Thomas is a geologist with an Honours Bachelor of
Earth Science degree from the University of Waterloo and a Master of Science degree from Queen?s
University. As an exploration geologist, Mr. Thomas worked for eight years with Minnova Inc. and Metall
Mining, exploring primarily for base metals in Canada.

Robert Francis ? Mr. Francis is a retired senior partner of the Toronto office of Deloitte & Touche, having
enjoyed an extensive career in public accounting. His 39 years of public accounting experience, 30 years
as a partner, has focused on the audits of financial statements of Canadian and United States public
companies and securities engagements of companies operating in the resources, retail, manufacturing,
electronics and real estate industries. Mr. Francis has also played a contributing role in the development
of many clients? governance programs. Mr. Francis also has experience with public offering documents,
debt and equity issues, and recurring regulatory filings in Canada and the United States, including with
respect to proxy information.

Michael Price - Mr. Price has more than 35 years? experience in mining and mining finance. He has
B.Sc. and Ph.D. qualifications in mining engineering from University College Cardiff, UK, a Mine
Managers Certificate of Competency (Coal Mines) South Africa and he is a European Engineer (FEANI)
and Chartered Mining Engineer (CEng). After working for BP Coal, BP Minerals and BP Exploration in
various mine management and business development roles, Mr. Price moved into mining finance with NM
Rothschild & Sons, Societe Generale and Barclays Capital where he structured, arranged and advised on
the financing of mining projects worldwide. Mr. Price is now a Non-Executive Director of several mining
companies and he is an independent adviser on mining finance to various companies including Resource
Capital Funds.

Messrs. Francis and Price are independent members of the Board; Mr. Thomas is not independent by
virtue of being a nominee of RCF to the Board (having replaced Mr. Thomas Quinn Roussel effective
June 12, 2014). The members of the Compensation Committee are appointed annually by the Board and
serve at the pleasure of the Board until their successors are duly appointed.

Compensation Discussion and Analysis

The objective of the Corporation?s compensation strategy is to ensure that compensation for its Named
Executive Officers or NEOs (as defined herein) is sufficiently attractive to recruit, retain and motivate high
performing individuals to assist Buffalo Coal in achieving its goals. The Corporation also ensures that
compensation is fair, balanced and generally linked to the performance of the Corporation and the
individual NEO.

Compensation for the NEOs is composed primarily of three components: base fees, performance
bonuses and stock based compensation. Compensation of NEOs is determined primarily via discussions
of the Compensation Committee and the Board based on their knowledge and personal experience. The
Compensation Committee recommends to the Board the base salary, performance bonus and stock
options to be granted to the NEOs and the Compensation Committee recommends to the Board the fees
and stock options to be granted to directors. With reference to the Compensation Committee?s
recommendations, the Board is responsible for approving the compensation of the directors and NEOs.

The Corporation completed a benchmarking exercise during fiscal year 2014 to determine appropriate
salary levels for new members of management. The benchmarking exercise applied to the CFO?s salary
from February 1, 2014, and the CEO?s salary from May 1, 2014. The chosen peer group comprised
globally listed companies with operations or development assets in South Africa: Keaton Energy Holdings
Limited; Coal of Africa Limited; Universal Coal plc; Ikwezi Mining Limited; Firestone Energy Limited; and
Resource Generation Limited. The Corporation also used REMchannel, a commercial remuneration
survey product to inform salary amounts.

The Board believes that the compensation paid to each NEO during the last financial year was
commensurate with the NEO?s position, experience and performance.

Base Fees:

Base fees form an essential component of the Corporation?s compensation strategy as they are key to the
Corporation remaining competitive, are fixed and therefore not subject to uncertainty, and can be used as
the base to determine other elements of compensation and benefits. In determining the base fees of
executive officers, the Compensation Committee and Board consider the following:                                                    
    a. the recommendations of the CEO of the Corporation (other than with respect to the compensation
       of the CEO);
    b. the particular responsibilities related to the position;
    c. the experience, expertise and level of the executive officer;
    d. the executive officer?s length of service to the Corporation; and
    e. the executive officer?s overall performance based on informal feedback.

There is no mandatory framework that determines which of the above-referenced factors may be more or
less important and the emphasis placed on any of these factors is at the discretion of the Board and may
vary among the executive officers.

Bonus Payments:

The Corporation determines bonuses using a scheme based on achieving various key objectives,
including production, processing, marketing and financial performance, health and safety, and strategic
initiatives. For each executive officer entitled to receive a bonus, actual performance is measured relative
to the targeted numbers on criteria relevant to their position, on a weighted average basis. An overall
rating approved by the Compensation Committee is then applied to the result, based on the individual
performance, so that bonuses will ultimately be determined based on both the Corporation?s and
individual performance. The aforementioned is subject to the overarching discretion of the Compensation
Committee, where in the circumstances, use of key objectives as a basis is not appropriate or otherwise
feasible.

Long-Term Incentives:

Stock Options

The Board believes that granting long-term incentives in the form of stock options to officers, directors,
consultants and employees encourages retention and more closely aligns the interests of such key
personnel with the interests of Shareholders while at the same time preserving the limited cash resources
of the Corporation.

Buffalo Coal does not utilize a set of formal objective measures; rather, long-term incentive grants of
stock options to NEOs are determined in a discretionary manner on a case by case basis, with
consideration of the number of options previously granted to each individual. There are no other specific
quantitative or qualitative measures associated with option grants and no specific weights are assigned to
any criteria individually, rather, the performance of the Corporation and the individual is broadly
considered as a whole when determining the stock based compensation (if any) to be granted and the
Compensation Committee and Board do not focus on any particular performance metric.

Stock options are granted to retain NEOs and motivate the NEOs by rewarding sustained, long-term
development and growth that will result in increases in stock value. There is no formal process for
assessing when stock options are to be granted, rather they are granted at a time determined necessary
by the Compensation Committee and the Board in their discretion.

Restricted Stock Unit Plan

On April 3, 2013, the Board approved and authorized the creation of a Restricted Stock Unit Plan (the
?RSU Plan?). The RSU Plan provides for the issuance of units (?RSUs?) to acquire Common Shares by
way of purchases of Common Shares by an independent trustee pursuant to a trust set up and funded by
the Corporation. On the applicable vesting date without any further action on the part of the holder of the
RSU, each RSU entitles the participant to receive one Common Share, without payment of additional
consideration, or, in the discretion of the Board, the cash equivalent thereof.

                                                   
The purpose of the RSU Plan is to attract, retain and motivate individuals with the requisite training,
experience and leadership to carry out key roles with the Corporation, to advance the interests of the
Corporation by providing such individuals with appropriate compensation and to strengthen the alignment
of the RSU holders? interest with the interests of Shareholders.

Directors, officers and key management employees of the Corporation are eligible to participate in the
RSU Plan. The RSU Plan is administered by the Board, which may determine from time to time, after
considering recommendations of the Compensation Committee, the number and timing of RSUs to be
awarded and the applicable vesting criteria, provided that the vesting period does not exceed three years.

The Board has previously allocated the issuance of $100,000 worth of RSUs to Mr. Craig Wiggill;
however, no RSUs have been formally granted to Mr. Wiggill and no other RSUs have been issued under
the RSU Plan as of the Record Date. See also ?Matters to be Considered - Settlement of Bonuses and
Restricted Share Units?.

Chief Executive Officer Compensation

The Compensation Committee:

        (a)     periodically reviews the CEO?s compensation and recommends any changes to the
                Board for approval;

        (b)     reviews corporate and individual goals and objectives relevant to the compensation of the
                CEO (which form the basis of measurement for short term incentives) and recommends
                them to the Board for approval; and

        (c)     reviews, and if appropriate, recommends to the Board for approval, any agreements
                between the Corporation and the CEO, including protections in the event of a change of
                control or other special circumstances, as appropriate.

The components of the CEO?s compensation are the same as those that apply to the other executive
officers of the Corporation, namely base salary, bonus and long-term incentives in the form of stock
options and RSUs.

The Compensation Committee reviews and ensures that the compensation of the CEO complies with the
principles underlying the Corporation?s overall general approach to compensation.

Risks Associated with Compensation

The Board is aware of the fact that certain compensation practices can have unintended risk
consequences. The Board?s oversight of the Corporation?s strategic direction and using a mix of short and
long term compensation are used to mitigate the risk of too much emphasis on short-term goals at the
expense of long-term sustainable performance. Long-term incentive awards align management?s interest
with the Shareholders? interest in the Corporation?s growth and encourage appropriate management
behaviours. The Compensation Committee reviews the Corporation?s compensation policies to identify
any practice that might encourage an employee to expose the Corporation to unacceptable risk, and has
not identified any risks arising from the Corporation?s compensation policies and practices that could
encourage a NEO or other individual to take inappropriate or excessive risks.

                                                   
Financial Instruments

The Corporation does not currently have a policy that restricts directors or NEOs from purchasing
financial instruments, including, for greater certainty, prepaid variable forward contracts, equity swaps,
collars, or units of exchange funds that are designed to hedge or offset a decrease in market value of
equity. However, to the knowledge of the Corporation, as of the date of hereof, no director or NEO of the
Corporation has participated in the purchase of such financial instruments.

Performance Graph

The following graph compares the yearly percentage change in the cumulative total shareholder return for
$100 invested in Common Shares on March 1, 2010 against the cumulative total shareholder return of the
S&P/Toronto Stock Exchange (the ?TSX?) Composite Index and the S&P/TSX Composite Index - Coal &
Consumable Fuels Index for the period from March 1, 2010 to December 31, 2014, taking into account a
39.8 for one consolidation of Common Shares on September 20, 2010.

                                      Feb. 28/10   Feb. 28/11   Feb. 29/12   Feb. 28/13   Feb. 28/14   Dec. 31/14

Buffalo                                  $100.00      $206.94       $86.80       $19.19        $7.31        $3.43
Coal Corp.

S&P/TSX                                  $100.00      $121.56      $121.56       $110.25       $122.18     $125.82
Composite Index

S&P/TSX Composite Index ?                $100.00      $149.39      $149.39       $77.20        $94.29       $67.00
Coal and Consumable Fuels


                               Feb. 28/10    Feb. 28/11     Feb. 29/12   Feb. 28/13    Feb. 28/14      Dec. 31/14
 Buffalo Coal Corp.                100.00        206.94          86.80        19.19          7.31            3.43
 S&P/TSX Composite Index           100.00        121.56         108.72       110.25        122.18          125.82
 S&P/TSX Composite Index -
 Coal and Consumable Fuels         100.00         149.39         86.93        77.20          94.29           67.00

Between March 1, 2010 and December 31, 2014, Executive Compensation did not directly tie to
shareholder value as depicted by the performance graph as a result of decisions made by the Board to
consider the additional time and effort contributed by each executive in achieving various milestones. In
addition, the Board considered the significant lure of outside recruitment, the need to reward the NEOs?
loyalty and continued efforts on its behalf and the difficulties involved with recruiting new, high quality
personnel. The Corporation has since experienced a decline in the trading price of its Common Shares, a
large part of which relates to a decline in global coal export prices, a factor outside the control of the
Corporation and that is affecting the industry worldwide. The level of compensation to executive officers
has not materially differed despite the decline in the market value of the Corporation?s shares as the
market value of the Corporation?s shares is not reflective of the need to maintain compensation at 
competitive levels for the Corporation to attract and retain qualified personnel, especially in a depressed
commodity price environment.

Summary Compensation Table

The following table summarizes the compensation paid during the following financial years; (i) the ten
months ended December 31, 2014 (?2014A?); (ii) the year ended February 28, 2014 (?2014B?); and (iii)
the year ended February 28, 2013 (?2013?) in respect of the individuals who were carrying out the role of
the CEO of the Corporation, the CFO of the Corporation and each of the three most highly compensated
executive officers other than the CEO and CFO at the end of the most recently completed financial year
whose total compensation was individually more than $150,000 for that financial year, or to whom the
description above would apply save that they were not acting as an executive officer of the Corporation at
the end of the most recently completed financial year (the "Named Executive Officers" or ?NEOs?).

                                             
                                             Share-    Option-      Non-equity incentive plan
    Name and                                 based     based          compensation                     All other compensation   Total compensation
                       Year    Salary ($)    awards    awards            ($)     
principal position                              ($)       ($)                                                   ($)                   ($)
                                                                         
                                               

                                                                      Annual
                                                                     incentive    Long-term incentive
                                                                           (2)           plans
                                                                      plans

                                      (2)
Malcolm Campbell       2014A   300,000        NIL        NIL           NIL                NIL                    NIL                  300,000

 Chief Executive                                             (1)
                       2014B    277,083       NIL      44,000          NIL                NIL                    NIL                  321,083
 Officer (Former
 Chief Operating
     Officer)          2013     275,000       NIL        NIL         175,000              NIL                    NIL                  450,000


                       2014A    175,000       NIL        NIL           NIL                NIL                    NIL                  175,000
 Sarah Williams
                                                             (1)
                       2014B    155,000       NIL      34,000          NIL                NIL                    NIL                  189,000
 Chief Financial
     Officer
                       2013     137,500       NIL        NIL          10,000              NIL                    NIL                  147,500

                                      (3)                                                                             (3)
  Craig Wiggill        2014A    125,000        NIL        NIL          NIL                NIL                  75,000                 200,000

                                                             (1)
Chairman, Former       2014B    150,000       NIL      30,000          NIL                NIL                    NIL                  180,000
  Interim Chief                       (4)
Executive Officer      2013      50,000       NIL        NIL           NIL                NIL                    NIL                   50,000

                       2014A    175,000       NIL        NIL           NIL                NIL                    NIL                  175,000
 Kevern Mattison
                                       (5)                   (1)
                       2014B   179,464       NIL        34,000         NIL                NIL                    NIL                  213,464
General Manager                        (6)
                       2013    200,400       NIL           NIL          NIL                NIL                    NIL                  200,400



    Notes:

    (1)           The value of these options was estimated using the Black-Scholes option pricing model under the following assumptions
                  as at February 28, 2014: expected dividend ?0%; risk-free interest rates of 1.88%; expected volatility ? 65%; and time to
                  expiry ? 5 years from the date of grant. This is consistent with the accounting values used in the Corporation?s financial
                  statements.
    (2)           Mr. Campbell assumed the role of Chief Executive Officer on May 1, 2014. Compensation amount includes compensation
                  paid while Mr. Campbell served in the role of Chief Operating Officer, at an annual salary of $300,000 per annum from
                  February 28, 2014 to May 1, 2014.
    (3)           On February 5, 2014, Mr. Wiggill assumed the role of Executive Chairman and Interim Chief Executive Officer until April
                  30, 2014, for which services he received a once off payment of $75,000. Salary represents fees paid to Mr. Wiggill for
                  services as a director during the most recently completed financial year. See also note (2). All fees paid (other than salary
                  paid as Interim CEO) were paid in capacity as director.                                                                           
     (4)          Represents director fees for the year ended February 28, 2013. Mr. Wiggill joined the Corporation as a director in
                  November, 2012.
     (5)          The compensation for the period up until February 1, 2014, was paid in Rands and has been translated at the average R
                  to C$ rate of 9.5083.
     (6)          The compensation for the period was paid in Rands and has been translated at the average R to C$ rate of 8.3832.

     
     Long Term Incentive Plan (LTIP Awards)

     Other than the granting of stock options under the Corporation?s stock option plan (the ?Stock Option
     Plan?), the Corporation did not have a long term incentive plan pursuant to which cash or non-cash
     compensation intended to serve as an incentive for performance (whereby performance is measured by
     reference to financial performance or the price of the Corporation?s securities) was paid or distributed to
     the NEOs during the most recently completed financial year. On April 3, 2013, the Board approved the
     RSU Plan. The Board has previously allocated the issuance of $100,000 worth of RSUs to Mr. Craig
     Wiggill; however, no RSUs have been formally granted to Mr. Wiggill and no other RSUs have been
     issued under the RSU Plan as of December 31, 2014.

     Incentive Plan Awards

     The following table provides information regarding the incentive plan awards for each NEO outstanding
     as of December 31, 2014.

                                         Option-based Awards                                                        Share-based Awards


                                                                                                                                         Market or payout
                 Number of                                                                           Number of       Market or payout    value of vested
                 securities                                                     Value of          shares or units     value of share-      share-based
                 underlying                                                   unexercised          of shares that     based awards       awards not paid
                unexercised      Option exercise    Option expiration        in-the-money         have not vested      that have not          out or
   Name         options (#)(1)      price ($)             date               options ($)(2) (3)          (#)             vested ($)       distributed ($)


 Malcolm
 Campbell         150,000        150,000 at $2.77     June 13, 2016
   Chief           70,000        70,000 at $1.80     January 25, 2017              NIL                 N/A                 N/A                 N/A
 Executive        275,000        275,000 at $0.29    August 13, 2018
  Officer

   Sarah
  Williams
   Chief          212,500        212,500 at $0.29    August 13, 2018               NIL                 N/A                 N/A                 N/A
 Financial
  Officer

Craig Wiggill
 Chairman,
   Former         187,500        187,500 at $0.29    August 13, 2018               NIL                 N/A                 N/A                 N/A
Interim Chief
  Executive
   Officer


  Kevern
  Mattison         30,000        30,000 at $1.80     January 25, 2017
  General         212,500        212,500 at $0.29    August 13, 2018               NIL                 N/A                 N/A                 N/A
  Manager


     Notes:
     (1)        The number of unexercised options excludes options granted subsequent to December 31, 2014. Please refer to
                ?Ownership of securities of the Corporation? below.
     (2)        Based on the closing market price of $0.075 per Common Share on December 31, 2014 and subtracting the exercise
                price of the options.
     (3)        These options have not been, and may never be, exercised and accrual gains, if any, on exercise will depend on the
                value of the Common Shares on the date of exercise.

                                                                       
Value on Pay-Out or Vesting of Incentive Plan Awards

None of the NEOs exercised any options during the year ended December 31, 2014. Except as described
herein, all options granted were vested in their entirety upon grant. Options granted on or after September
29, 2014 are subject to a two year vesting schedule (with one third vesting on the date of the grant, one
third vesting on the first anniversary of the grant and the balance vesting on the second anniversary of the
grant).

Defined Benefit or Actuarial Plan

The Corporation does not currently have a defined benefit or actuarial plan under which benefits are
determined primarily by final compensation (or average final compensation) and years of services.

Termination of Employment, Change in Responsibilities and Employment Contracts

The following describes the respective agreements entered into by the Corporation and the NEOs which
remain in effect as of the Record Date.

For the purpose of the following, ?Change in Control? is defined as the acquisition by any person (person
being defined as an individual, a corporation, a partnership, an unincorporated association or
organization, a trust, a government or department or agency thereof and the heirs, executors,
administrators or other legal representatives of an individual and an associate or affiliate of any thereof as
such terms are defined in the Canada Business Corporations Act) of: (1) shares or rights or options to
acquire shares of the Corporation or securities which are convertible into shares of the Corporation or any
combination thereof such that after the completion of such acquisition such person would be entitled to
exercise 30% or more of the votes entitled to be cast at a meeting of the Shareholders of the Corporation;
(2) shares or rights or options to acquire shares, or their equivalent, of any material subsidiary of the
Corporation or securities which are convertible into shares of the material subsidiary or any combination
thereof such that after the completion of such acquisition such person would be entitled to exercise 30%
or more of the votes entitled to be cast a meeting of the Shareholders of the material subsidiary; or (3)
more than 50% of the material assets of the Corporation, including the acquisition of more than 50% of
the material assets of any material subsidiary of the Corporation.

Malcolm Campbell

Effective May 1, 2014, the Corporation entered into an employment contract with Mr. Campbell pursuant
to which Mr. Campbell agreed to provide services to the Corporation in the capacity of CEO of the
Corporation. Mr. Campbell is entitled to compensation for the provision of such services in the amount of
C$375,000 per annum. In the event of termination without cause, Mr. Campbell is entitled to the
equivalent of three months of the annual salary in the form of a lump sum payment, within thirty days of
the termination date. The Corporation may terminate the agreement without cause at any time by making
a payment equivalent to three months of the annual salary, in the form of a lump sum payment, within
thirty days of the termination date. In the event of a Change in Control, (other than a Change in Control
attributable to RCF), Mr. Campbell will have the option to terminate his employment within six months,
and the Corporation shall have the option to terminate Mr. Campbell?s employment within one year from
the date of such Change in Control. In the event that such an election is made by either party, the
Corporation shall, within thirty days of being notified of such election by the relevant party in writing, make
a lump sum termination payment to Mr. Campbell of 18 months? salary plus an amount that is equivalent
to all cash bonuses paid in the 18 months prior to the Change in Control, as well as all accrued bonuses
awarded but not yet paid up to the date of notification of election of termination by the relevant party.
These amounts will be converted into R at publicly available exchange rates. Following a Change in
Control, all unvested options will immediately vest, and all outstanding options will be treated according to
the Stock Option Plan. Mr. Campbell?s employment agreement includes a standard confidentiality
provision. The material breach of any term of the agreement will serve as grounds for termination of the
agreement for cause and the inapplicability of any notice provision or termination payment in lieu thereof.

                                                     
Sarah Williams

The Corporation entered into an employment contract with Ms. Williams effective February 1, 2014
pursuant to which Ms. Williams agreed to provide services to the Corporation in the capacity of CFO of
the Corporation. Ms. Williams is entitled to compensation for the provision of such services in the amount
of C$210,000 per annum. The Corporation may terminate the agreement without cause at any time by
making a payment equivalent to three months of the annual salary, in the form of a lump sum payment,
within thirty days of the termination date. In the event of a Change in Control, (other than a Change in
Control attributable to RCF), Ms. Williams will have the option to terminate her employment within six
months, and the Corporation shall have the option to terminate Ms. William?s employment within one year
from the date of such Change in Control. In the event that such an election is made by either party, the
Corporation shall, within thirty days of being notified of such election by the relevant party in writing, make
a lump sum termination payment to Ms. Williams of one year?s salary plus an amount that is equivalent to
all cash bonuses paid in the 12 months prior to the Change in Control, as well as all accrued bonuses
awarded but not yet paid up to the date of notification of election of termination by the relevant party.
These amounts will be converted into R at publicly available exchange rates. Following a Change in
Control, all unvested options will immediately vest and all outstanding options will be treated according to
the Stock Option Plan. Ms. Williams? employment agreement includes a standard confidentiality provision.
The material breach of any term of the agreement will serve as grounds for termination of the agreement
for cause and the inapplicability of any notice provision or termination payment in lieu thereof.

Craig Wiggill

Through a corporation Mr. Wiggill controls, Mr. Wiggill is party to an agreement pursuant to which Mr.
Wiggill agreed to provide services to the Corporation in the capacity of a director. Mr. Wiggill is entitled to
compensation for the provision of such services in the amount of C$12,500 per month. The Corporation
may terminate the agreement without cause at any time by making a lump sum payment equivalent to six
months of director?s fees within thirty days of the termination date. In the event of a Change in Control of
the Corporation, either Mr. Wiggill or the Corporation shall have one year from the date of such Change in
Control to elect to have Mr. Wiggill?s appointment terminated. In the event that such an election is made,
the Corporation shall, within 30 days of such election, make a lump sum termination payment that is
equivalent to 24 months base directors? fees plus an amount that is equivalent to all cash bonuses paid in
the 24 months prior to the Change in Control as well as all accrued bonuses on unrealized gains.
Following a Change in Control, all stock options granted to Mr. Wiggill shall be dealt with in accordance
with the terms of the Stock Option Plan; however all stock options granted to the Director, but not yet
vested, shall vest immediately. Similarly, following a Change in Control, all shares granted to Mr. Wiggill
under the Corporation?s share compensation plan, but not yet vested, shall vest immediately.

The estimated incremental payments, payables, accruals and benefits that might be paid to the NEOs
pursuant to the above noted agreements (those that have not been terminated as of the date of this
Circular) in the event of termination without cause or after a Change of Control (assuming such
termination or Change of Control is effective as of the Record Date) are detailed below, assuming a
triggering event on December 31, 2014, the last day of the Corporation?s most recently completed
financial year.

                                                     
Named Executive Officer                   Termination not for Cause ($)      Termination on a Change of
                                                                                            Control ($)

 Malcolm Campbell

    Salary and Quantified Benefits                                 93,750                         562,500

    Bonus                                                             NIL                         175,000

    Total                                                          93,750                         737,500

 Sarah Williams

    Salary and Quantified Benefits                                 52,500                         210,000

    Bonus                                                             NIL                             NIL

    Total                                                          52,500                         210,000

 Craig Wiggill

    Salary and Quantified Benefits                                 75,000                         300,000

    Bonus                                                             NIL                             NIL

    Total                                                          75,000                         300,000

 Kevern Mattison

    Salary and Quantified Benefits                                 52,500                             NIL

    Bonus                                                             NIL                             NIL

    Total                                                          52,500                             NIL




Compensation of Directors

Compensation of directors for the financial year ended December 31, 2014 was determined with
reference to the role that each director provided to the Corporation. The following information details
compensation paid in the recently completed financial year.

In addition, directors are entitled to participate in the Stock Option Plan, which is designed to give each
option holder an interest in preserving and maximizing shareholder value in the longer term. The amount
of options and shares to be granted is based on the relative contribution and involvement of the individual
in question as well as taking into consideration previous option and share grants.

Executive officers who also act as directors of the Corporation do not receive any additional
compensation for services rendered in their capacity as directors. No executive officers served on the
Board during the financial year ended December 31, 2014.

During the financial year ended December 31, 2014, directors were granted the fees, options and
bonuses in their capacity as directors of the Corporation as set out in the table below.

                                                   
    Director Compensation Table

    The following table provides information regarding compensation paid to the Corporation?s directors, other
    than Craig Wiggill, during the financial year ended December 31, 2014. Information regarding
    compensation for Mr. Wiggill is reflected in the ?Summary Compensation Table? above.

                                             Share-                             Non-equity
                               Fees           based          Option-          incentive plan             All other
                              earned         awards          based            compensation             compensation
             Name               ($)            ($)         awards ($)(1)           ($)(2)                  ($)(3)               Total ($)

    John Dreyer                37,500           NIL           10,375                   NIL                    NIL                47,875

    Michael Price              39,247           NIL             NIL                    NIL                    NIL                39,247

    Thomas Quinn               10,333           NIL             NIL                    NIL                    NIL                10,333
    Roussel(4)

    David Thomas(4)            25,419           NIL           10,375                   NIL                    NIL                35,794

    Bernard Wilson(4)          14,086           NIL             NIL                    NIL                    NIL                14,086

    Robert Francis             41,666           NIL           10,375                   NIL                    NIL                52,041


    Notes:
    (1)       The value of these options was estimated using the Black-Scholes option pricing model under the following assumptions
              as at December 31, 2014: expected dividend ?0%; risk-free interest rates of 1.66%; expected volatility ? 102%; and time
              to expiry ? 5 years from the date of grant. This is consistent with the accounting values used in the Corporation?s financial
              statements.
    (2)       Compensation received in the form of discretionary performance based bonuses accrued in accordance with the bonus
              compensation policy as described in further detail under the heading ?Compensation of Officers? set out above.
    (3)       Other benefits did not exceed the lesser of $50,000 and 10% of the total annual compensation for the named director.
    (4)       Mr. Roussel resigned as a director effective June 12, 2014 and was replaced by Mr. Thomas on June 12, 2014. Mr.
              Wilson resigned as a director effective July 7, 2014. The stock options which have been granted to Mr. Thomas were
              granted to RCF Management (Toronto) Inc.

    Incentive Plan Awards

    The following table provides information regarding the incentive plan awards for each director outstanding
    as of December 31, 2014.

                                       Option-based Awards                                                  Share-based Awards


                                                                                                                                   Market or
                                                                                              Number of         Market or       payout value
               Number of                                                                       shares or      payout value of      of vested
               securities                                                   Value of            units of       share-based       share-based
               underlying                                                 unexercised         shares that      awards that        awards not
              unexercised      Option exercise            Option         in-the-money          have not          have not         paid out or
  Name         options (#)        price ($)           expiration date    options ($)(1) (2)    vested (#)       vested ($)      distributed ($)


John
Dreyer         125,000(6)      125,000 at $0.11       August 12, 2019          NIL               N/A                N/A               N/A

                                                                       
Michael
Price           125,000        125,000 at $0.29    August 13, 2018           NIL                 N/A                N/A               N/A


Robert
Francis         125,000(6)      125,000 at $0.11    August 12, 2019           NIL                N/A                N/A               N/A



Thomas
Quinn             NIL                  N/A                N/A                NIL                 N/A                N/A               N/A
        (3)
Roussel


Bernard
       (4)        NIL                  N/A                N/A                NIL               N/A                  N/A               N/A
Wilson


David
       (5)
Thomas         125,000(6)      125,000 at $0.11    August 12, 2019           NIL               N/A                  N/A               N/A


     Notes:

     (1)      Based on the closing market price of $0.075 per Common Share on December 31, 2014 and subtracting the exercise
              price of the options.
     (2)      These options have not been, and may never be, exercised and accrual gains, if any, on exercise will depend on the
              value of the Common Shares on the date of exercise.
     (3)      Mr. Roussel resigned as director of the Corporation on June 12, 2014.
     (4)      Mr. Wilson resigned as director of the Corporation on July 7, 2014.
     (5)      Mr. Thomas became a director on June 12, 2014. The stock options which have been granted to Mr. Thomas were
              granted to RCF Management (Toronto) Inc.
     (6)      Of the 125,000 options granted, 83,333 must still vest, of which 41,667 will vest on August 12, 2015, and 41,666 will vest
              on August 12, 2016.

     Value on Pay-Out or Vesting of Incentive Plan Awards

     None of the directors of Buffalo Coal exercised any options during the year ended December 31, 2014.
     Except as described herein, all options granted were vested in their entirety upon grant. Options granted
     on or after September 29, 2014 are subject to a two year vesting schedule (with one third vesting on the
     date of the grant, one third vesting on the first anniversary of the grant and the balance vesting on the
     second anniversary of the grant).

     Securities Authorized for Issuance Under Equity Compensation Plans

     The table below sets out the outstanding options under the Stock Option Plan, being the Corporation?s
     only compensation plan under which Common Shares are authorized for issuance, as of December 31,
     2014.

                                             Number of securities to          Weighted-average             Number of securities
                                             be issued upon exercise           exercise price of         remaining available under
                                             of outstanding options,         outstanding options,          equity compensation
                                               warrants and rights            warrants and rights            plans (excluding
                                                                                                           securities reflected in
                                                                                                                column (a))
       Plan Category                                   (a)                            (b)                            (c)
       Equity compensation plans                    2,507,250                        $0.70                       3,112,421
       approved by security holders
       Equity compensation plans not                   NIL                            NIL                              NIL
       approved by security holders
       TOTAL                                        2,507,250                        $0.70                        3,112,421


                                                                     
Indebtedness of Directors and Executive Officers

As at the date of this Circular, and during the financial year ended December 31, 2014, no director or
executive officer of the Corporation or Nominee (as defined herein) (and each of their associates and/or
affiliates) was indebted, including under any securities purchase or other program, to (i) the Corporation
or its subsidiaries, or (ii) any other entity which is, or was at any time during the financial year ended
December 31, 2014, the subject of a guarantee, support agreement, letter of credit or other similar
arrangement or understanding provided by the Corporation or its subsidiaries.

Directors? and Officers? Insurance and Indemnification

The Corporation maintains insurance for the benefit of its directors and officers against liability in their
respective capacities as directors and officers. The Corporation has purchased directors? and officers?
insurance with an aggregate of $12,000,000 in coverage. The approximate amount of premiums paid by
the Corporation for the financial year ended December 31, 2014 in respect of such insurance was
$30,155.

Interest of Informed Persons in Material Transactions

Other than as disclosed herein, during the most recently completed financial year, no informed person of
the Corporation, nor any associate or affiliate of an informed person had any material interest, direct or
indirect, in any transaction or any proposed transaction which has materially affected or would materially
affect the Corporation or any of its subsidiaries. An ?informed person? means: (a) a director or executive
officer of the Corporation; (b) a director or executive officer of a person or company that is itself an
informed person or subsidiary of the Corporation; (c) any person or company who beneficially owns,
directly or indirectly, voting securities of the company or who exercises control or direction over voting
securities of the Corporation or a combination of both carrying more than 10% of the voting rights other
than voting securities held by the person or company as underwriter in the course of a distribution; and
(d) the Corporation itself, if and for so long as, it has purchased, redeemed or otherwise acquired any of
its shares.

The Bonus Recipients (as defined herein) and Mr. Wiggill have a direct interest in the Shareholder
approval of the potential issuance of the Bonus Shares (as defined herein) in satisfaction of their
performance bonuses and previous restricted stock unit allocation, as the case may be. In addition, some
of the directors and executive officers of the Corporation or its subsidiaries have been granted stock
options under the Stock Option Plan and may be granted stock options under the Stock Option Plan as
proposed to be amended hereunder and, as such, have an interest in the Shareholder approval of the
amendment to such plan. ?Matters to be Considered ? Amendment to Stock Option Plan? and ?-
Settlement of Bonuses and Restricted Share Units?

RCF is a lender to the Corporation under the Existing RCF Loan and has an interest in Bridge Loan and
Amended and Restated RCF Loan (each, as defined herein). See ?Matters to be Considered ? RCF
US$29 Million Convertible Loan Facility.? As of May 19, 2015, RCF holds 50,021,394 Common Shares
representing 65.65% of the Corporation?s issued and outstanding share capital. Mr. David Thomas is a
member of the Board nominated by RCF. Mr. Thomas declared his interest and abstained from any
Board discussions or votes with respect to the Bridge Loan and Amended and Restated RCF Loan.

Rolling Stock Option Plan

The Corporation is engaged in the development and production of coal and is dependent upon its ability
to recruit and retain skilled management and operators. The Corporation believes that weighting
compensation to options (or other equity based compensation) better aligns the interests of management
with the interests of Shareholders and is consistent with the Corporation?s growth strategy.
                                                  
Accordingly, the Corporation has adopted a Stock Option Plan. The Stock Option Plan was approved by
the Shareholders of the Corporation at its annual and special meeting on September 11, 2013. The TSX
requires that the Shareholders approve of securities based compensation arrangements every three
years.

Pursuant to the Stock Option Plan, the Corporation may grant up to that number of stock options that
equals 10% of the number of issued and outstanding Common Shares at the time of the stock option
grant, from time to time. As of the Record Date, an aggregate of 6,238,397 stock options are outstanding
under the Stock Option Plan, which represents approximately 8.19% of the outstanding Common Shares.
There are 1,380,602 stock options available for grant under the Stock Option Plan, which represents
approximately 1.81% of the outstanding Common Shares. The Stock Option Plan provides that the
Corporation cannot grant stock options to any one person representing more than 5% of the outstanding
Common Shares of the Corporation. Since inception 75,000 stock options have been exercised into
shares of the Corporation, representing 0.10% of the issued and outstanding shares of the Corporation.

The terms and conditions of each option granted under the Stock Option Plan will be determined by the
Board, upon the recommendations of the Compensation Committee. Options will be priced in the context
of the market and in compliance with applicable securities laws and TSX guidelines. Consequently, the
exercise price for any stock option shall not be lower than the market price of the underlying Common
Shares at the time of grant. Vesting terms will be determined at the discretion of the Board. The Board
shall also determine the term of stock options granted under the Stock Option Plan, provided that no
stock option shall be outstanding for a period greater than five years.

Any Common Shares underlying stock options which have been granted under the Stock Option Plan and
which have been exercised, cancelled or terminated in accordance with the terms of the Stock Option
Plan will again be available under the Stock Option Plan.

The Stock Option Plan provides for amendment procedures that specify the kind of amendments to the
Stock Option Plan that will require Shareholder approval.

The Board may, subject to receipt of requisite Shareholder and regulatory approval, make the following
amendments to the Stock Option Plan:

                       i.   any amendment to the number of securities issuable under the Stock Option
                            Plan, including an increase to a fixed maximum percentage or a change from
                            a fixed maximum percentage of securities to a fixed maximum number of
                            securities;

                      ii.   any amendment granting additional powers to the Board to amend the Stock
                            Option Plan or entitlements without security holder approval;

                     iii.   any amendment reducing the exercise price of options or other entitlements
                            held by insiders;

                     iv.    any amendment extending the term of options held by insiders;

                      v.    any amendment changing the insider participation limits which result in the
                            security holder approval to be required on a disinterested basis;

                     vi.    any change to the definition of the eligible participants which would have the
                            potential of broadening or increasing insider participation;

                     vii.   the addition of any form of financial assistance;
                                                    
                     viii.   any amendment to a financial assistance provision that is more favourable to
                             participants;

                      ix.    any addition of a cashless exercise feature, payable in cash or securities that
                             does not provide for a full deduction of the number of underlying securities
                             from the Stock Option Plan reserve;

                       x.    the addition of a deferred or restricted share unit or any other provision that
                             results in participants receiving securities while no cash consideration is
                             received by the Corporation;

                      xi.    a discontinuance of the Stock Option Plan; and

                      xii.   any other amendments that may lead to significant or unreasonable dilution
                             in the Corporation's outstanding securities or may provide additional benefits
                             to eligible participants, especially insiders of the Corporation, at the expense
                             of the Corporation and its existing Shareholders.

The Stock Option Plan provides that except for the material changes to the Stock Option Plan outlined
above it is important that the Board has the flexibility to make changes to the Stock Option Plan without
Shareholder approval. Such amendments could include (i) making a change to the vesting provisions of a
security or the Stock Option Plan, (ii) a change to the termination provisions of a security or the Stock
Option Plan that does not entail an extension beyond the original expiry date, (iii) the addition of a
cashless exercise feature, payable in cash or securities, which provides for a full deduction of the number
of underlying securities from the Stock Option Plan reserve, and (iv) amendments to the Stock Option
Plan that are of a ?housekeeping? nature.

The Stock Option Plan provides that holders of options who are restricted from trading in securities of the
Corporation during periodic black-out periods imposed by the Corporation shall be entitled to exercise an
option that was set to expire during a black-out period imposed by the Corporation until the day that is five
business days following the expiry of the black-out period.

Directors, officers, employees and certain consultants shall be eligible to receive stock options under the
Stock Option Plan. Upon the termination of an optionholder?s engagement with the Corporation, the
cancellation or early vesting of any stock option shall be in the discretion of the Board. In general, the
Corporation expects that stock options will be cancelled 30 days following an optionholder?s termination
from the Corporation if terminated without cause. Upon an optionholder?s termination for just cause, all
options held by such optionholder will be terminated immediately. Stock options granted under the Stock
Option Plan shall not be assignable.

The Corporation will not provide financial assistance to any optionholder to facilitate the exercise of
options under the Stock Option Plan.

See ?Matters to be Considered ? Amendment to Stock Option Plan? for a discussion of the proposed
amendment to the Stock Option Plan.

Corporate Governance Practices

The Corporation and the Board recognize the importance of corporate governance to the effective
management of the Corporation and to the protection of its stakeholders, particularly Shareholders. The
Corporation?s approach to significant issues of corporate governance is designed with a view to ensuring
that the business and affairs of the Corporation are effectively managed so as to enhance shareholder
value. The Board fulfills its mandate directly and through its committees at regularly scheduled meetings
or as required. The Board is kept informed regarding the Corporation?s operations at regular meetings
and through reports and discussions with management on matters within their particular areas of
expertise. Frequency of meetings may be increased and the nature of the agenda items may be changed
depending upon the state of the Corporation?s affairs and in light of opportunities or risks that the
Corporation faces.

The Corporation believes that its corporate governance practices are in compliance with applicable
Canadian requirements, including National Policy 58-201 ? Corporate Governance Guidelines. The
Corporation has considered the applicable requirements and believes that its approach is appropriate and
works effectively for the Corporation and its Shareholders. The Corporation continues to monitor
developments in Canada with a view to further revising its governance policies and practices, as
appropriate.

Board of Directors

Pursuant to National Instrument 58-101 ? Disclosure of Corporate Governance Practices, a director is
independent if the director has no direct or indirect relationship with the issuer which could, in the view of
the issuer?s board of directors, be reasonably expected to interfere with the exercise of a member?s
independent judgment. Certain directors are deemed to have a material relationship with the issuer by
virtue of their position or relationship with the Corporation. The Board is currently composed of five
members, four of whom the Board has determined are independent, being a majority of the members of
the Board. Messrs. Price, Dreyer, Francis and Wiggill are considered to be independent. Mr. Thomas is
not considered to be independent because of the material relationships between the Corporation and
RCF. Mr. Thomas is RCF?s nominee to the Board. In assessing whether a director is independent for
these purposes, the circumstances of each director have been examined by the Board as a whole in
relation to various factors.

Board Independence

To facilitate the functioning of the Board independently of management, the following structures and
processes are in place:

    -   the Corporation has appointed an independent Chairman;

    -   a majority of the directors are not management of the Corporation and are considered
        independent of the Corporation;

    -   members of management, including without limitation, the CEO of the Corporation, may be asked
        to leave a meeting during discussions and determinations of certain Board and committee
        matters;

    -   the Audit Committee of the Board is comprised solely of independent directors;

    -   the Corporate Governance Committee of the Board is comprised of a majority of independent
        directors;

    -   the Compensation Committee of the Board is comprised of a majority of independent directors;

    -   under the by-laws of the Corporation, any two directors may call a meeting of the Board;

    -   the CEO?s compensation is considered by the Board, in his absence, and by the Compensation
        Committee at least once a year;

    -   in addition to the standing committees of the Board, independent committees will be appointed
        from time to time, when appropriate; and
                                                    
    -   the Board policy is to hold in-camera meetings with the independent directors at the end of each
        Board or committee of the Board meeting to the extent required.

Chairman

As of November 1, 2012, the Chairman of the Board is Craig Wiggill. In terms of the governance of the
Corporation, the Chairman of the Board?s primary roles are to chair all meetings of the Board and
Shareholder meetings in a manner that promotes meaningful discussion, to manage the affairs of the
Board, including ensuring the Board is organized properly, functions effectively and meets its obligations
and responsibilities. The Chairman of the Board?s responsibilities include, without limitation, ensuring that
the Board works together as a cohesive team with open communication, ensuring that the resources
available to the Board are adequate to support its work, and working with the corporate governance
committee to ensure that the necessary processes are in place to assess the effectiveness of the Board
and its committees as well as the contribution of individual directors at least annually. The Chairman of
the Board also acts as the primary spokesperson for the Board, ensuring that management is aware of
concerns of the Board, Shareholders, other stakeholders and the public and, in addition, ensures that
management strategies, plans and performance are appropriately represented to the Board. The
Chairman of the Board maintains communications with the Corporation?s executive management and
consults regularly with the Board and management on the development and operation of the
Corporation?s projects.

Board Committee Meetings

The independent directors comprise a majority of the membership of the committees of the Board and, in
such roles, hold in camera sessions without management at their committee meetings to review the
business operations, corporate governance, compensation, and financial results of the Corporation.

During the financial year ended December 31, 2014, the independent directors, in connection with
meetings of the Audit Committee, met three times. The attendance of each of the current members of the
Audit Committee, based on the number of meetings each was eligible to attend is as follows: Mr. Dreyer
3/3), Mr. Francis 3/3) and Mr. Wiggill 2/2).

The Compensation Committee met four times during the year ended December 31, 2014. The attendance
of each of the current members of the Compensation Committee, based on the number of meetings each
was eligible to attend is as follows: Mr. Francis (4/4), Mr. Price (4/4), and Mr. Thomas (3/3).

The Corporate Governance Committee met three times during the year ended December 31, 2014. The
attendance of each of the current members of the Corporate Governance Committee, based on the
number of meetings each was eligible to attend is as follows: Mr. Dreyer (3/3), Mr. Thomas (2/2) and Mr.
Francis (3/3).

During the financial year ended December 31, 2014, the Board held seven meetings. The attendance of
each of the current directors, based on the number of meetings each was eligible to attend is as follows:
Mr. Dreyer (5/7), Mr. Francis (7/7), Mr. Price (7/7), Mr. Thomas (6/6) and Mr. Wiggill (7/7). The remainder
of the Board?s activities were conducted by way of written consent resolutions.

Board Mandate

The Board has adopted a written mandate. The duties and responsibilities of the Board are to supervise
the management of the business and affairs of the Corporation, and to act with a view towards the best
interests of the Corporation. In discharging its mandate, the Board is responsible for the oversight and
review of:

       -        the strategic planning process of the Corporation;
                                                     
       -        identifying the principal risks of the Corporation?s business and ensuring the
                implementation of appropriate systems to manage these risks;

       -        succession planning, including appointing, training and monitoring senior management;

       -        a communications policy for the Corporation to facilitate communications with investors
                and other interested parties; and

       -        the integrity of the Corporation?s internal control and management information systems.

The Board discharges its responsibilities directly and through its committees, currently consisting of the
Audit Committee, the Compensation Committee, the Corporate Governance Committee and the Health &
Safety Committee.

Position Descriptions

The Corporation does not have a codified position description for the CEO. The Board assists in the
delineation of the role of the CEO through its regular meetings and the responsibilities of the CEO are
well-known by the Board and the CEO due to their extensive experience and knowledge in the industry
and based on customary practice.

Code of Business Conduct and Ethics

The Board has adopted a Code of Business Conduct and Ethics (the ?Code?) for its directors, officers and
employees. The Corporate Governance Committee has responsibility for monitoring compliance with the
Code by ensuring all directors, officers and employees receive and become thoroughly familiar with the
Code and acknowledge their support and understanding of the Code. Any non-compliance with the Code
is to be reported to the CEO.

The Board takes steps to ensure that directors, officers and employees exercise independent judgment in
considering transactions and agreements in respect of which a director, officer or employee of the
Corporation has a material interest, which include ensuring that directors, officers and employees are
familiar with the Code and, in particular, the rules concerning reporting conflicts of interest and obtaining
direction from the Corporation?s directors and the Chairman and CEO regarding any potential conflicts of
interest.

The Board encourages and promotes an overall culture of ethical business conduct by promoting
compliance with applicable laws, rules and regulations in all jurisdictions in which the Corporation
conducts business; providing guidance to directors, officers and employees to help them recognize and
deal with ethical issues; promoting a culture of open communication, honesty and accountability; and
ensuring awareness of disciplinary action for violations of ethical business conduct.

A copy of the Code and other corporate governance policies may be obtained upon request to the
Corporation by contacting the Corporate Secretary of the Corporation by email at
lorraine.harrison@buffalocoal.co.za or by telephone at +27 11 656 3210.

Whistleblower Policy

The Corporation has adopted a Whistleblower Policy which allows its directors, officers, consultants and
employees who feel that a violation of the Code has occurred, or who have concerns regarding financial
statement disclosure issues, accounting, internal accounting controls or auditing matters, to report such
violations or concerns on a confidential and anonymous basis. Reporting a violation of the Code is made
by informing anonymously to the Whistleblower hotline or URL or (if desired) to a member of the Audit
Committee, who then investigates each matter so reported and takes corrective and disciplinary action, if
appropriate.
                                                     
Nomination of Directors and Mechanisms of Board Renewal

The Corporation has not adopted term limits for its directors at this time. Each of the directors of the
Corporation has served in such capacity for less than three years and all but one of the directors are
independent. The Board does not consider term limits to be appropriate, as imposing arbitrary limits may
impede the effectiveness of the Board given the restructuring initiatives that are being implemented and
the continuity of a solid base of directors being beneficial to the Corporation at this time. The Corporate
Governance Committee will continue to oversee the assessment of the Board?s performance,
effectiveness and composition to ensure that it is in line with the strategic direction of the Corporation.

Generally, the Corporate Governance Committee, which is composed of a majority of independent
directors, is responsible for identifying and recruiting new candidates for nomination to the Board, and
reviewing the qualifications of new candidates proposed by other members of the Board. By appointing a
committee that is comprised of a majority of independent directors the Board ensures an objective
nominating process. The process by which the Board anticipates that it will identify new candidates is
through recommendations of the Corporate Governance Committee whose responsibility it is to develop,
and periodically update and recommend to the Board for approval, a long-term plan for Board
composition that takes into consideration the following: (a) the independence of each director; (b) the
competencies and skills the Board, as a whole, should possess such as financial literacy, integrity and
accountability, the ability to engage in informed judgment, governance, strategic business development,
excellent communications skills and the ability to work effectively as a team; (c) the current strengths,
skills and experience represented by each director, as well as each director?s personality and other
qualities as they affect Board dynamics; and (d) the strategic direction of the Corporation.

The Corporate Governance Committee?s responsibilities include periodically reviewing the charters of the
Board and the committees of the Board; assisting the Chairman of the Board in carrying out his
responsibilities; considering and, if thought fit, approving requests from directors for the engagement of
independent counsel in appropriate circumstances; reviewing the Code and annually preparing and
reviewing the Corporation?s Corporate Governance disclosure to be included in the Corporation?s
management information circular; reviewing the Board?s relationship with management to ensure the
Board is able to, and in fact does, function independently of management; assisting the Board by
identifying individuals qualified to become Board members and members of Board committees; and
assisting the Board in monitoring compliance by the Corporation with legal and regulatory requirements.

Diversity on the Board and Officer Positions

The Corporation does not have a formal written policy for the identification and nomination or appointment
of women as directors or officers, nor has it established any such targets. However, as the majority of the
Corporation?s and its major subsidiary?s workforce is governed by South African law, the Corporation has
adopted a policy that, while it strives to identify suitably qualified and experienced women, it does not
discriminate in favour of any person based on gender, sexual orientation, race or religious belief. The
Board currently has no representation of women on the Board. The Corporation recognizes that diversity
is important to good governance. The Corporate Governance Committee will continue to identify new
director candidates based on their independence, education skills and experience to ensure that the
Board as a whole will possess the appropriate talent to oversee the Corporation?s business. The
Corporation currently has one female executive officer out of four, representing 25% of the executive
officers of the Corporation. The Corporation?s major subsidiary has one female director out of three,
representing 33.33% of the Board and executive officers of that subsidiary. Senior management
candidates will continue to be evaluated with regard to their education, skills and experience without
regard to gender, sexual orientation, race or religious belief.

Majority Voting Policy

The Corporation has adopted a Majority Voting Policy to provide a meaningful way for the Corporation?s
Shareholders to hold individual directors accountable and to require the Corporation to closely examine
directors that do not have the support of a majority of Shareholders. The policy provides that forms of
proxy for the election of directors will permit a Shareholder to vote in favour of, or to withhold from voting,
separately for each director nominee and that where a director nominee has more votes withheld than are
voted in favour of him or her, the nominee will be considered not to have received the support of the
Shareholders, even though duly elected as a matter of corporate law. Pursuant to the policy, such a
nominee will forthwith submit his or her resignation to the Board, such resignation to be effective on
acceptance by the Board. The Board will then establish an advisory committee (the ?Committee?) to
which it shall refer the resignation for consideration. In such circumstances, the Committee will make a
recommendation to the Board as to the director?s suitability to continue to serve as a director after
reviewing, among other things, the results of the voting for the nominee and the Board will consider such
recommendation. This policy does not apply where an election involves a proxy battle (i.e. where proxy
material is circulated in support of one or more nominees who are not part of the director nominees
supported by the Board).

Other Public Corporation Directorships

To the best of the Corporation?s knowledge and based on publicly available information, the following
directors of the Corporation are currently also directors of the reporting issuers set out below:

 Name                                                      Directorships with Other Reporting Issuers

 Michael Price                                             Eldorado Gold Corporation
                                                           Asanko Gold Corporation

 David Thomas                                              Noront Resources
 Craig Wiggill                                             Tiger?s Realm Coal Limited

 Robert Francis                                            Alloycorp. Mining Inc.


Orientation and Continuing Education

Generally, the Corporate Governance Committee is responsible for ensuring that new directors, if
requested, are provided with documents from recent Board meetings, and provided with opportunities for
meetings and discussion with senior management and other directors. Directors are expected to attend
all meetings of the Board and are also expected to prepare thoroughly in advance of each meeting in
order to actively participate in the deliberations and decisions.

The Board recognizes the importance of ongoing director education and the need for each director to take
personal responsibility for this process. The Board notes that it has benefited from the experience and
knowledge of individual members of the Board in respect of the evolving governance regime and
principles. The Board ensures that all directors are apprised of changes in the Corporation?s operations
and business.

The Board takes an active interest in the progress of the Corporation?s properties and assets and
members are invited to visit the Corporation?s properties in South Africa. Messrs. Dreyer, Price, Thomas
and Wiggill have each visited the Corporation?s properties in South Africa.

Ethical Business Conduct

The Board is apprised of the activities of the Corporation and ensures that it conducts such activities in an
ethical manner. The Board encourages and promotes an overall culture of ethical business conduct by
promoting compliance with applicable laws, rules and regulations; providing guidance to consultants,
officers and directors to help them recognize and deal with ethical issues; promoting a culture of open
communication, honesty and accountability; and ensuring awareness of disciplinary actions for violations
of ethical business conduct.
                                                    
Committees of the Board

As of the Record Date, the Board had the following four standing committees:

          -   Audit committee, comprised of Robert Francis (Chair since March 1, 2014), John Dreyer and
              Craig Wiggill, each of whom is an independent director;

          -   Compensation Committee, comprised of David Thomas (Chair since July 7, 2014), Robert
              Francis and Michael Price, of whom Messrs. Francis and Price are independent directors;

          -   Corporate Governance Committee, comprised of John Dreyer (reconfirmed as Chair on July
              7, 2014), David Thomas and Robert Francis, of whom Messrs. Dreyer and Francis are
              independent directors; and

          -   Health & Safety Committee, comprised of Michael Price (reconfirmed as Chair on July 7,
              2014) and Craig Wiggill.

All of the committees were comprised of at least a majority of directors who are independent of
management and each of the committees report directly to the Board. From time to time, when
appropriate, ad hoc committees of the Board may be appointed by the Board.

For further information regarding the Audit Committee, see the Corporation?s Annual Information Form for
the financial year ended December 31, 2014 under the heading ?Audit Committee?.

Auditor

The Corporation?s auditor is McGovern, Hurley, Cunningham, LLP, Chartered Accountants of Toronto,
Ontario. McGovern, Hurley, Cunningham, LLP, Chartered Accountants, have been the auditors of the
Corporation since July 10, 2007.

                                     MATTERS TO BE CONSIDERED

Financial Statements

The financial statements for the financial year ended December 31, 2014, together with the auditor?s
report thereon, will be presented to Shareholders for review at the Meeting and were mailed to
Shareholders with the Notice of Meeting and this Circular. No vote by the Shareholders is required with
respect to this matter.

Number of Directors

Shareholders of the Corporation will be asked to consider, and if thought appropriate, approve an
ordinary resolution fixing the number of directors to be elected at the Meeting at five directors. In order to
be effective an ordinary resolution requires approval by a majority of the votes cast by Shareholders who
vote in respect of the resolution. UNLESS OTHERWISE DIRECTED IT IS THE INTENTION OF THE
PERSONS NAMED IN THE ACCOMPANYING PROXY TO VOTE THE PROXIES IN FAVOUR OF THE
RESOLUTION FIXING THE NUMBER OF DIRECTORS TO BE ELECTED AT THE MEETING AT FIVE
DIRECTORS.

Election of Directors

The Corporation has nominated five persons (the ?Nominees?) for election as directors of the Corporation
at the Meeting. At the Meeting, Shareholders will be asked to elect these Nominees as directors of the
Corporation. The Corporation has in place an advance notice policy requiring advance notice to the
Corporation in circumstances where nominations of persons for election to the Board are made by
Shareholders. No director nomination proposals were received by the required deadline set out under the
advance notice policy.

The following table provides the names of the Nominees and information concerning such Nominees. The
persons in the enclosed form of proxy intend to vote for the election of the Nominees. Management does
not contemplate that any of the Nominees will be unable to serve as a director. At the Meeting,
Shareholders will be asked to elect these Nominees as directors. Shareholders will be able to vote for or
withhold from voting on the election of each director on an individual basis. See ?Corporate Governance
Practices? for more information on our Majority Voting Policy.

UNLESS AUTHORITY TO DO SO IS WITHHELD, THE PERSONS NAMED IN THE ACCOMPANYING
PROXY INTEND TO VOTE FOR THE ELECTION OF ALL OF THE NOMINEES. If prior to the Meeting
any of such Nominees is unable to or unwilling to serve, the persons named in the accompanying Form of
proxy will vote for another nominee or nominees in their discretion if additional nominations are made at
the Meeting. Each Nominee elected will hold office until his successor is elected at the next annual
meeting of the Corporation, or any postponement(s) or adjournment(s) thereof, or until his successor is
elected or appointed.

Information in the table below regarding the number of Common Shares of the Corporation beneficially
owned, directly or indirectly, or over which control or direction is exercised by the Nominees is based
upon information furnished by the respective Nominee and is as at the Record Date.

         Name and Municipality of                       Principal Occupation           Director Since   Number of Shares
               Residence                                                                                Beneficially Owned
                                                                                                          or Over which
                                                                                                            Control is
                                                                                                            Exercised(1)
                          (2) (4)
            John Dreyer                        Senior Mining Professional            October 16, 2012          NIL
            Sydney, Australia
                          (2) (3) (4)
           Robert Francis                  Corporate Director; Retired Senior        February 5, 2014          NIL
            Toronto, Ontario                 Partner at Deloitte & Touche
                          (3) (5)
            Michael Price                      Senior Mining Professional            October 16, 2012          NIL
         London, United Kingdom
                           (3)(4)
            David Thomas                      Managing Director of RCF                 June 12, 2014           NIL
             Oakville, Ontario                Management (Toronto) Inc.
                          (2)(5)
            Craig Wiggill                       Senior Mining Professional           October 16, 2012          NIL
      Berkhamsted, United Kingdom


Notes:
(1)
           The Corporation has relied exclusively on the respective Nominee for this information.
(2)
           Member of the Audit Committee.
(3)
           Member of the Compensation Committee.
(4)
           Member of the Corporate Governance Committee.
(5)
           Member of the Health and Safety Committee.

All of the Nominees are presently directors of the Corporation and were elected as directors at the last
annual and special meeting of Shareholders of the Corporation on June 27, 2014.

Cease Trade Orders or Bankruptcies, Penalties and Sanctions

No proposed director of the Corporation is, or within ten years prior to the date hereof has been, a
director, chief executive officer or chief financial officer of any company (including the Corporation) that, (i)
was subject to a cease trade order, an order similar to a cease trade order or an order that denied the
relevant company access to any exemption under securities legislation, that was in effect for a period of
more than 30 consecutive days, that was issued while the director or executive officer was acting in the
capacity as director, chief executive officer or chief financial officer; or (ii) was subject to a cease trade
order, an order similar to a cease trade order or an order that denied the relevant company access to any
exemption under securities legislation, that was in effect for a period of more than 30 consecutive days,
that was issued after the director or executive officer ceased to be a director, chief executive officer or
chief financial officer and which resulted from an event that occurred while that person was acting in the
capacity as director, chief executive officer or chief financial officer:

Other than as set forth below, no proposed director of the Corporation is or has been, within the ten years
before the date of this Circular, a director or executive officer of any company (including the Corporation)
that, while that person was acting in that capacity, or within a year of that person ceasing to act in that
capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency,
or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a
receiver, receiver manager or trustee appointed to hold the assets of the proposed director.

Mr. Dreyer retired as a director of Cobar Consolidated Resources (?Cobar?) on December 19, 2013. On
18 March 2014, the board of directors of Cobar appointed administrators pursuant to Section 436A of the
Australian Corporations Act.

No proposed director or executive officer has, within the 10 years before the date of this Circular, become
bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or become subject
to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver
manager or trustee appointed to hold the assets of the director or executive officer.

No proposed director has been subject to (i) any penalties or sanctions imposed by a court relating to
securities legislation or by a securities regulatory authority or has entered into a settlement agreement
with a securities regulatory authority; or (ii) any other penalties or sanctions imposed by a court or
regulatory body that would likely be considered important to a reasonable Shareholder in deciding
whether to vote for a proposed director.

Appointment of Auditors

Unless authority to do so is withheld, the persons named in the accompanying proxy intend to vote for the
appointment of McGovern, Hurley, Cunningham, LLP, Chartered Accountants of Toronto, Ontario as
auditors of the Corporation until the close of the next annual meeting of Shareholders of the Corporation
and to authorize the directors to fix their remuneration. McGovern, Hurley, Cunningham, LLP, Chartered
Accountants, have been the auditors of the Corporation since July 10, 2007. Further information
regarding the Auditors and the fees paid to them in the year ended December 31, 2014 is included in the
Corporation?s current annual information form for the year ended December 31, 2014 under the heading
?Audit Committee - External Auditor Service Fees (by category)?.

Recommendation of the Board

The Board recommends that Shareholders vote in favour of the appointment of McGovern, Hurley,
Cunningham, LLP and the authorization of the Board to fix their remuneration.

Amendment to Stock Option Plan

Given the current financial situation of the Corporation, including the general reduction in export coal
prices, as disclosed in the audited financial statements and related management?s discussion and
analysis for the financial year ended December 31, 2014, the Board believes that it is in the best interests
of the Corporation to attract and retain employees, officers, directors and consultants by continuing to
provide incentive compensation in the form of stock options. The Stock Option Plan is intended to
maintain the Corporation?s competitiveness within the industry and to facilitate the achievement of the
Corporation?s long-term strategy by aligning the interests of personnel with interests of Shareholders.
                                                     
The Board believes that it is in the best interests of the Corporation to amend the Stock Option Plan as
follows:

        (a)     by increasing the maximum number of Common Shares issuable thereunder, and under
                any other security based compensation arrangement of the Corporation, from a maximum
                of 10% to a maximum of 20% of the number of issued and outstanding Common Shares
                at the time of grant, from time to time;

        (b)     by removing the prohibition on granting to any one person stock options representing
                more than 5% of the outstanding Common Shares; and

        (c)     by removing the insider participation limits of the number of Common Shares (i) issued to
                the insiders within any one year period, and (ii) issuable to insiders at any time.

As of the Record Date, an aggregate of 6,238,397 stock options are outstanding under the Stock Option
Plan, which represents approximately 8.19% of the outstanding Common Shares. There are 1,380,602
stock options available for grant under the original Stock Option Plan, which represents approximately
1.81% of the outstanding Common Shares.

If the Stock Option Plan Amendment Resolution (as defined herein) is approved, unallocated stock
options to purchase an aggregate of 8,999,600 Common Shares (equal to approximately 11.81% of the
outstanding Common Shares) would be available for future grants based on the number of outstanding
Common Shares as of the Record Date. Such number of unallocated Common Shares would be reduced
by the number of Common Shares issuable pursuant to future grants under any other security based
compensation arrangement.

Approval of the Stock Option Plan Amendment Resolution

At the Meeting, disinterested Shareholders will be asked to consider and, if deemed advisable, to approve
the following resolution (the ?Stock Option Plan Amendment Resolution?). To become effective, the Stock
Option Plan Resolution must be approved, with or without variation, by an affirmative vote of at least a
simple majority of the votes cast by the disinterested Shareholders voting in person or by proxy at the
Meeting. For these purposes, disinterested Shareholder approval requires the approval of a majority of
the votes cast by all Shareholders present in person or represented by proxy at the Meeting excluding
votes attaching to shares beneficially owned by insiders of the Corporation to whom options have or may
be granted under the Stock Option Plan. Such insiders hold 50,023,849 Common Shares representing
approximately 65.66% of the issued and outstanding Common Shares and they will not be entitled to vote
on the resolution. The Board recommends that Shareholders vote IN FAVOUR of the Stock Option
Plan Amendment Resolution. In the absence of a contrary instruction, the persons designated by
management of the Corporation in the enclosed Proxy intend to vote FOR the Stock Option Plan
Amendment Resolution.

If the Stock Option Plan Amendment Resolution is passed at the Meeting, the amendments will become
effective and the Corporation will be required to seek Shareholder approval for unallocated options rights
and other entitlements no later than three years from the date hereof. If Shareholders do not approve the
Stock Option Plan Amendment Resolution, the currently outstanding stock options will continue in full
force and effect; however, the Corporation will not be permitted to make further grants until Shareholder
approval is obtained.

BE IT RESOLVED as an ordinary resolution that:

    1. The Stock Option Plan is amended as set forth in the Circular, including (a) to increase the
       maximum number of Common Shares issuable thereunder, and under any other security based
       compensation arrangement of the Corporation, from a maximum of 10% to a maximum of 20% of
       the number of issued and outstanding Common Shares at the time of grant, from time to time, (b)
       to remove the 10% insider limits under the Stock Option Plan; and (c) to remove certain
       restrictions that limit the number of Common Shares issuable to any one person pursuant to the
       grant of stock options to that number which is equal to 5% of the total number of outstanding
       Common Shares.

      2. The unallocated options, rights and other entitlements under the Stock Option Plan, as amended,
         are hereby approved until June 19, 2018, which is the date that is three years from the date of the
         meeting at which Shareholder approval is being sought as set forth in the Circular.

      3. Any director or officer of the Corporation is authorized to execute and deliver all other documents
         and do all other acts and things as may be necessary or desirable to give effect to this resolution.

Settlement of Bonuses and Restricted Share Units

The Shareholders of the Corporation will be requested at the Meeting to consider and, if thought fit, pass,
with or without amendment, a resolution approving the issuance of Common Shares (the ?Bonus
Shares?) in settlement of cash bonuses as follows:

 Name, Title                                  Gross     Cash        Bonus     Net    Cash        Bonus     Net Number of Bonus
                                              Entitlement ($)(1)              Entitlement ($)(2)           Shares(2)
 Malcolm     Campbell,    Chief   Executive      100,000                          59,000                     1,229,167
 Officer
 Sarah Williams, Chief Financial Officer          75,000                          44,250                       921,875
 Kevern Mattison, General Manager,                45,000                          26,550                       553,125
 Buffalo Coal Dundee Proprietary Limited
 Fanie Muller, Vice-President Business            45,000                          26,550                       553,125
 Development and Technical Support
 Lindsey Styles, Group Finance Manager            15,000                           8,850                       184,375
 Lorraine Harrison, Corporate Secretary            5,000                           2,950                        61,458
 Total                                           285,000                         168,150                     3,503,125

Notes:

(1)        This number is presented on a pre-tax basis without deduction of tax payable in South Africa.
(2)        This number is presented net of tax payable in South Africa (being a tax rate of 41%).

The Corporation has granted performance bonuses to the persons named above (?Bonus Recipients?)
in the amounts shown above. Given the current financial situation and restructuring initiatives of the
Corporation, on April 20, 2015, the Board approved settling such bonus amounts in the form of Common
Shares at a deemed issuance price of $0.048 (valued at a 25% discount to the 5-day volume-weighted
average price (the ?VWAP?) of the Common Shares as of April 17, 2015, being $0.063 per Common
Share). The issuance of the Bonus Shares is subject to TSX and disinterested Shareholder approval.

Furthermore, on April 20, 2015, the Board acknowledged the previous allocation of $100,000 worth of
restricted stock units to Mr. Craig Wiggill, Chairman of the Corporation during the financial year ended
February 28, 2014, which had not get been formally granted. Given the current financial state of the
Corporation and since the existing RSU Plan does not provide for the issuance of Common Shares from
treasury of the Corporation and only for purchases of Common Shares by the trustee thereunder (or cash
equivalent thereof), the Board approved settling such restricted stock units through the issuance of an
Common Shares (the ?RSU Settlement Shares?), valued the same as the Bonus Shares as set forth
above, being $0.048 per RSU Settlement Share, again subject to approval TSX and disinterested
Shareholder approval. The aggregate number of RSU Settlement Shares issuable to Mr. Wiggill under
this arrangement is 2,083,333 RSU Settlement Shares.
                                                               
Each recipient of Bonus Shares and/or RSU Settlement Shares pursuant to the arrangements discussed
in this section of the Circular has contractually agreed not to transfer, sell or otherwise dispose of any
such Common Shares for a period of three months following the issuance date.

The aggregate number of Bonus Shares and RSU Settlement Shares pursuant to the arrangements
discussed in this section is 5,586,458 Common Shares (after deducting the applicable South African tax
payable in connection with such arrangements), representing approximately 7.33% of the currently issued
and outstanding Common Shares.

Approval of the Settlement of Bonuses and Restricted Share Units Resolution

At the Meeting, disinterested Shareholders will be asked to consider and, if deemed advisable, to approve
the following resolution (the ?Settlement Resolution?). To become effective, the Settlement Resolution
must be approved, with or without variation, by an affirmative vote of at least a simple majority of the
votes cast by the disinterested Shareholders voting in person or by proxy at the Meeting. For these
purposes, disinterested Shareholder approval requires the approval of a majority of the votes cast by all
Shareholders present in person or represented by proxy at the Meeting excluding votes attaching to
shares beneficially owned by the Bonus Recipients, who are insiders of the Corporation, and the
Chairman. Such Bonus Recipients and the Chairman hold 2,455 Common Shares representing less than
0.01% of the issued and outstanding Common Shares and they will not be entitled to vote on the
resolution. The Board recommends that Shareholders vote IN FAVOUR of the Settlement
Resolution. In the absence of a contrary instruction, the persons designated by management of
the Corporation in the enclosed Proxy intend to vote FOR the Settlement Resolution.

BE IT RESOLVED as an ordinary resolution that:

    1. The Corporation is authorized to issue an aggregate of approximately 3,503,125 Bonus Shares to
       the Bonus Recipients (representing approximately 4.60% of the currently issued and outstanding
       Common Shares) and approximately 2,083,333 RSU Settlement Shares to the Chairman
       (representing approximately 2.73% of the currently issued and outstanding Common Shares), all
       as more particularly described in the Circular.

    2. Any director or officer of the Corporation is authorized to execute and deliver all other documents
       and do all other acts and things as may be necessary or desirable to give effect to this resolution.

RCF US$29 Million Convertible Loan Facility

Current Facility - Existing RCF Loan

The Corporation currently has a US$25 million secured convertible loan facility with RCF (the ?Existing
RCF Loan?) which bears interest at a rate of 12% per annum, payable monthly in arrears. Interest is
payable in Common Shares at a price per Common Share equal to the 20-day VWAP of the Common
Shares on the TSX as at the date the payment is due. The Existing RCF Loan is convertible into Common
Shares at a price of C$0.1446 per Common Share. The Existing RCF Loan matures on June 30, 2019.

Bridge Loan

An additional US$4 million secured loan facility with RCF (the ?Bridge Loan?) was established on March
30, 2015. No establishment fees were incurred on the Bridge Loan.
                                                    
The Bridge Loan matures on the earlier of (i) receipt of all requisite regulatory and Shareholder approvals
(the ?Approvals?) and (ii) June 30, 2015 (the ?Maturity Date?). The Bridge Loan will bear interest at a
rate of 15% per annum, payable on the Maturity Date. Upon and subject to receipt of the Approvals, the
Bridge Loan will convert into a convertible loan with the same terms and conditions as the Existing RCF
Loan, subject to the amendments discussed below. If the Approvals are not received on or before June
30, 2015, the Bridge Loan and all accrued but unpaid interest due to RCF will be immediately due and
payable in cash. If the Approvals are not obtained and the Corporation is not able to meet its obligations
under the Bridge Loan, RCF will be entitled to realize on its security under the Bridge Loan in accordance
with the terms thereof. The Corporation does not have the financial capacity to repay the Bridge Loan if
this situation should arise.

The proceeds of the Bridge Loan will be used for general working capital and to implement the
restructuring process at Buffalo Coal?s operations in Dundee, South Africa, as announced on March 11,
2015. Funds from the Bridge Loan will be available upon the satisfaction of the conditions precedent set
out in the Bridge Loan documents and will be drawn on an as needed basis.

Amended and Restated RCF Loan

In consideration of the advance of the Bridge Loan, and subject to receipt of all Approvals, the
Corporation and RCF have agreed to amend and restate the Existing RCF Loan (the ?Amended and
Restated RCF Loan?) as follows:

    1. The Bridge Loan will convert into a convertible loan to be governed by the terms and conditions of
       the Amended and Restated RCF Loan, with the aggregate amount of the facility being increased
       from US$25 million to US$29 million to account for the Bridge Loan.

    2. The Amended and Restated RCF Loan will bear interest at 15% per annum (increased from 12%
       per annum under the terms of the Existing RCF Loan), payable monthly in arrears. Interest will
       continue to be payable in Common Shares at a price per Common Share equal to the 20-day
       VWAP as at the date the payment is due.

    3. The principal amount of the Amended and Restated RCF Loan will be convertible into Common
       Shares at a price of C$0.0469, representing a 25% discount to the 5-day VWAP of the Common
       Shares as at January 30, 2015 (the last trading day prior to the date of announcement of the
       Bridge Loan). The conversion price represents a reduction from the current conversion price of
       C$0.1446 under the terms of the Existing RCF Loan.

As security for the Amended and Restated RCF Loan, (i) the Corporation will pledge the reversionary
rights of its shares in and over its subsidiary, Buffalo Coal Dundee Proprietary Limited (formerly Forbes
Coal Proprietary Limited) (?Buffalo Coal Dundee?) and cede its reversionary rights in favour of RCF; (ii)
Buffalo Coal Dundee will pledge the reversionary rights of its shares in and over its subsidiary Zinoju Coal
Proprietary Limited and cede its reversionary rights in favour of RCF; and (iii) a limited recourse
guarantee will be granted by Buffalo Coal Dundee in favour of RCF for the obligations of the Corporation
in respect of the Amended and Restated RCF Loan.

The Amended and Restated RCF Loan matures on June 30, 2019.

Effect of the Bridge Loan and the Proposed Amendments

RCF currently owns 50,021,394 Common Shares representing approximately 65.65% of the currently
issued and outstanding Common Shares (on a non-diluted basis). Accordingly, the transactions
discussed in this section will not result in a change of control of the Corporation.
                                                    
The table below illustrates the dilution to Shareholders of the Corporation under the Existing RCF Loan
and the Amended and Restated RCF Loan based on the Oanda noon exchange rate on May 15, 2015 of
US$1.00 = C$1.1958:

Shareholder Dilution

                             Current (Non-Diluted)              Existing       Loan       Terms    Proposed        Loan     Terms
                                                                (Diluted)(1)                       (Diluted)(2)
                             No.              %                 No.               %                No.                 %

RCF                          50,021,394       65.65%            555,714,133       90.11%           1,222,906,143       95.25%

Other Shareholders           26,168,592       34.35%            26,168,592        4.24%            26,168,592          2.04%

Investec Bank Limited        0                0                 34,817,237        5.65%            34,817,237          2.71%
(?Investec?)(3)

Total                        76,189,986       100.00%           616,699,962       100.00%          1,283,891,972       100.00%

Notes:

      1.   The principal amount of the Existing RCF Loan would convert into an aggregate of 206,742,739 Common Shares issuable
           to RCF. Assuming (a) RCF receives all interest payments under the Existing RCF Loan in cash, and (b) the entire
           principal amount of the Existing RCF Loan remains outstanding at maturity, an aggregate of C$14,947,500 in interest
           would be payable to RCF. If the entire amount of such interest is converted into common shares, assuming a conversion
           price of C$0.05 (the approximate 20-day VWAP as at May 15, 2015), an additional 298,950,000 Common Shares would
           be issuable to RCF. Following the issuance of such shares, and assuming no other changes, RCF would own an
           aggregate of 555,714,133 Common Shares being approximately 729.4% of the currently issued and outstanding Common
           Shares (on a non-diluted basis) and 90.11% of the then issued and outstanding Common Shares (on a fully-diluted basis).
      2.   The principal amount of the Amended and Restated RCF Loan would convert into an aggregate of 739,407,249 Common
           Shares issuable to RCF. Assuming (a) RCF receives all interest payments under the Amended and Restated RCF Loan
           in cash, and (b) the entire principal amount of the Amended and Restated RCF Loan remains outstanding at maturity, an
           aggregate of C$21,673,,875 in interest would be payable to RCF. If the entire amount of such interest is converted into
           common shares, assuming a conversion price of C$0.05, an additional 433,477,500 Common Shares would be issuable
           to RCF. Following the issuance of such shares, and assuming no other changes, RCF would own an aggregate of
           1,222,906,143 Common Shares being approximately 1,605.10% of the currently issued and outstanding Common Shares
           (on a non-diluted basis) and 95.25% of the then issued and outstanding Common Shares (on a fully-diluted basis). This
           represents a net increase of 667,192,010 Common Shares (being approximately 875.70% of the currently issued and
           outstanding Common Shares) from the number of Common Shares previously approved by the shareholder for issuance
           to RCF under the Existing RCF Loan.
      3.   The Corporation?s subsidiary, Buffalo Coal Dundee, previously entered into loan facilities with Investec consisting of a
           revolving loan facility of up to R30 million and a term loan facility of up to R140 million. In connection with the
           Corporation?s July 3, 2014 restructuring, Investec was issued 34,817,237 warrants of the Corporation with an exercise
           price of C$0.1446.

The Amended and Restated RCF Loan will become effective upon receipt of disinterested Shareholder
approval of the Loan Resolution (as defined herein) and final TSX approval.

Background and Particulars of the Transaction

From early 2012 to the present, international coal export prices and markets have been very weak. A low
coal price environment resulted in continuing cash flow shortfalls for the Corporation. Despite the
restructuring initiatives which had been implemented during 2013 and 2014, the current market conditions
and operational performance necessitated further restructuring and, hence, the negotiation of and entry
into the Bridge Loan and the proposed Amended and Restated RCF Loan. The additional funds will be
used to improve operating efficiencies and support the group's working capital requirements during the
restructuring period in the Corporation's return to profitability, thereby ensuring that Buffalo remains
sustainable into the future.

The Corporation has made diligent efforts to renegotiate certain agreements or obtain deferrals of
liabilities in an effort to improve its financial situation, including restructuring of credit facilities with
                                                               
Investec in July 2014, and restructuring of liabilities to existing customers and other creditors of the
Corporation. The Corporation has also sought to aggressively cut costs, including the closing of the
Corporation?s Toronto office in 2014 and the 2014/2015 consultation process in South Africa with
organized labour and relevant stakeholders as required in terms of section 189A of the South African
Labour Relations Act, as a consequence of which the Corporation has retrenched approximately 25% of
mine employees.

RCF had no role in the negotiation of the term sheet or definitive agreement, or any other potential or
contemplated transactions, on behalf of the Corporation with respect to the Bridge Loan and the
Amended and Restated RCF Loan. Mr. David Thomas, as a member of the Board nominated by RCF.
declared his interest and abstained from any Board discussions or votes with respect thereto.

Regulatory and MI 61-101 Matters

The Corporation is a reporting issuer in each of the provinces of Canada other than Quebec and is
subject to Multilateral Instrument 61-101 ? Protection of Minority Shareholders in Special Transactions
(?MI 61-101?). MI 61-101 regulates insider bids, issuer bids, business combinations and related party
transactions to ensure equality of treatment among securityholders, generally by requiring enhanced
disclosure, disinterested securityholder approval, and, in certain instances, independent valuations and
approval and oversight of certain transactions by a special committee of independent directors.

RCF is a ?related party? of the Corporation pursuant to MI 61-101 as RCF is a person that has beneficial
ownership of, and control or direction over, directly or indirectly securities of the Corporation carrying
more than 10% of the voting rights attached to all of the Corporation?s outstanding voting securities. The
Bridge Loan and the Amended and Restated RCF Loan, including the conversion features thereof,
constitute a ?related party transaction? pursuant to MI 61-101. Pursuant to subsection 5.5(c) of MI 61-101-
securities issued for cash consideration, the Corporation is exempt from the requirements under MI 61-
101 of having to obtain a formal valuation. Neither the Corporation nor, to the knowledge of the
Corporation, RCF, has knowledge of any material information concerning the Corporation or its securities
that has not been generally disclosed. Neither the Corporation nor any of its officers or directors, after
reasonable inquiry, are aware of any prior valuations or bona fide offers that have been completed or
received by the Corporation in the past 24 months in respect of the Corporation that relate to the subject
matter of or are otherwise relevant to the transaction.

In addition, (a) the aggregate number of Common Shares issuable at a discount to the market price of the
Common Shares pursuant to the Bridge Loan and the Amended and Restated RCF Loan, including the
conversion features thereof, is greater than 25% of the number of the currently issued and outstanding
Common Shares, on a non-diluted basis, and (b) the number of Common Shares issuable to RCF, an
insider of the Corporation, is greater than 10% of the number of Common Shares currently issued and
outstanding, on a non-diluted basis.

Accordingly, pursuant to section 5.6 of MI 61-101 and section 607(g)(i) and (ii) of the TSX Company
Manual, the Corporation is seeking disinterested Shareholder approval of the conversion of the Bridge
Loan into the Amended and Restated RCF Loan, the amendments to the Existing RCF Loan discussed in
this Circular and the issuance of common shares to RCF in satisfaction of the conversion of the principal
amounts of, and interest payments under the Amended and Restated RCF Loan Funding. Pursuant to
section 8.1(2) of MI 61-101, in determining disinterested Shareholder approval, the Corporation shall
exclude the votes attached to Common Shares that are held or controlled by an ?interested party?. For a
related party transaction, an ?interested party? is a related party of the Corporation that (i) is a party to the
transaction, or (ii) is entitled to receive, directly or indirectly, as a consequence of the transaction, a
collateral benefit. Therefore, Common Shares held or controlled by a director or executive officer or other
related party receiving a ?collateral benefit? would be excluded from the disinterested Shareholder vote
pursuant to MI 61-101.
                                                       
None of the directors or officers of the Corporation will be receiving any collateral benefits in connection
with the Transaction, and as such, none of the directors or officers of the Corporation are ?interested
parties? as defined in MI 61-101.

Common Shares held or controlled by RCF will be excluded from the Shareholder votes required to
approve the conversion of the Bridge Loan and the Amended and Restated RCF Loan, as RCF is a party
to both. As at May 19, 2015, RCF held or controlled 50,021,394 (or approximately 65.65%) of the issued
and outstanding Common Shares on a non-diluted basis. In addition, the Corporation advises that Mr.
Thomas is a member of the Board nominated by RCF. Mr. Thomas declared his interest and abstained
from any Board discussions or votes with respect to the Bridge Loan and Amended and Restated RCF
Loan.

Recommendation of the Board

The Board carefully considered the Bridge Loan and proposed terms of the Amended and Restated RCF
Loan. After negotiations with RCF and a review of the terms of the Bridge Loan and Amended and
Restated RCF Loan, the Board, unanimously (with Mr. Thomas abstaining from the discussions and
voting), approved the conversion of the Bridge Loan into the Amended and Restated RCF Loan and of
the amendments to the Existing RCF Loan and unanimously recommends that Shareholders vote IN
FAVOUR of the Loan Resolution at the Meeting. In recommending that Shareholders vote in favour of
such resolution, the Board considered, among other things, the following factors:

-       the financial condition of the Corporation and the inability of the Corporation to satisfy its
        obligations without the injection of additional capital;

-       the lack of viable recapitalization alternatives to the Amended and Restated RCF Loan available
        to the Corporation; and

-       the alternatives available to enable a return of value to Shareholders should the Corporation be
        placed into administrative or liquidation proceedings, which was one outcome in the range of
        possibilities, would effectively be nothing.

If Shareholder approval is not received, then the Bridge Loan, and any accrued interest thereon, will
become due and payable in cash on June 30, 2015, and the Corporation does not have the financial
capacity to repay the outstanding amount should this situation arise. As a result, RCF will be entitled to
realize on its security in accordance with the terms of the Bridge Loan.

The Board and management of the Corporation believe that the Amended and Restated RCF Loan will
enable the Corporation to move forward with an optimized and streamlined corporate and operational
structure.

Approval of the Loan Resolution

At the Meeting, disinterested Shareholders will be asked to consider and, if deemed advisable, to approve
the following resolution (the ?Loan Resolution?). To become effective, the Loan Resolution must be
approved, with or without variation, by an affirmative vote of at least a simple majority of the votes cast by
the disinterested Shareholders voting in person or by proxy at the Meeting. The disinterested directors
of the Board (being those directors that are not affiliated or associated with RCF) recommend that
disinterested Shareholders vote IN FAVOUR of the Loan Resolution. In the absence of a contrary
instruction, the persons designated by management of the Corporation in the enclosed Proxy
intend to vote FOR the Loan Resolution.
                                                   
BE IT RESOLVED as an ordinary resolution that:

     1. The conversion of the Bridge Loan into the Amended and Restated RCF Loan; the amendments
        to the Existing RCF Loan; and the issuance to RCF of an additional 667,192,010 Common
        Shares (in addition to that number of Common Shares previously authorized by the Shareholders
        in connection with the approval of the Existing RCF Loan) upon conversion of the principal
        amount of the Amended and Restated RCF Loan and interest payments thereunder (or such
        other higher number of Common Shares not previously authorized for issuance by the
        Shareholders as may be required to satisfy the obligations of the Corporation under the Amended
        and Restated RCF Loan after giving effect to any changes in the assumed exchange rate and/or
        the assumed conversion price of the interest payable under the Amended and Restated RCF
        Loan), all as more particularly described in the Circular, are hereby approved and authorized.

     2. Any director or officer of the Corporation that is not a nominee of RCF is authorized to execute
        and deliver all other documents and do all other acts and things as may be necessary or
        desirable to give effect to this resolution.

Ownership of Securities of the Corporation

The following table sets forth the number, designation and the percentage of outstanding securities
beneficially owned or over which control or direction is exercised (a) by each director and officer of the
Corporation, and (b) if known after reasonable inquiry, by (i) each associate or affiliate of an insider of the
Corporation, (ii) each associate or affiliate of the Corporation, (iii) an insider of the Corporation, other than
a director or officer of the Corporation:


                                                                   Number of Common             Percentage of Outstanding
                     Name of Shareholder                            Shares Owned(1)                 Common Shares
RCF(2)                                                                 50,021,394                          65.65%

Malcolm Campbell(3)                                                        30                             <0.01%

John Dreyer(4)                                                            NIL                               N/A

Robert Francis(5)                                                         NIL                               N/A

Kevern Mattison (6)                                                        75                             <0.01%

Michael Price(7)                                                          NIL                               N/A

David Thomas(8)                                                           NIL                               N/A

Craig Wiggill(9)                                                          NIL                               N/A

Sarah Williams(10)                                                       2,350                            <0.01%

Notes:
     1.    The information as to shares beneficially owned or controlled is not within the knowledge of the management of the
           Corporation and has been furnished by the respective director, officer or insider.
     2.    This number does not include Common Shares issuable pursuant to or upon conversion of the Existing RCF Loan.
     3.    This number does not include stock options to acquire an aggregate of 1,413,140 Common Shares of which 918,140 were
           granted subsequent to December 31, 2014. The number does also not include Common Shares to be issued to settle
           performance bonuses.
     4.    This number does not include stock options to acquire an aggregate of 125,000 Common Shares.
     5.    This number does not include stock options to acquire an aggregate of 446,349 Common Shares, of which 321,349 were
           granted subsequent to December 31, 2014.                                                            
     6.    This number does not include stock options to acquire an aggregate of 436,500 Common Shares, of which 194,000 were
           granted subsequent to December 31, 2014. The number does also not include Common Shares to be issued to settle
           performance bonuses.
     7.    This number does not include stock options to acquire an aggregate of 446,349 Common Shares, of which 321,349 were
           granted subsequent to December 31, 2014.
     8.    This number does not include stock options to acquire an aggregate of 446,349 Common Shares, of which 321,349 were
           granted subsequent to December 31, 2014. Such stock options are held by RCF Management (Toronto) Inc. and not in
           Mr. Thomas? personal capacity.
     9.    This number does not include stock options to acquire an aggregate of 876,105 Common Shares, of which 688,605 were
           granted subsequent to December 31, 2014, or Common Shares to be issued to settle RSUs.
     10.   This number does not include stock options to acquire an aggregate of 901,105 Common Shares, of which 688,605 were
           granted subsequent to December 31, 2014. The number does also not include Common Shares to be issued to settle
           performance bonuses.


Commitments to Acquire Securities of the Corporation

Except as disclosed herein, to the Corporation?s knowledge, there are no agreements, commitments or
understandings to acquire securities of the Corporation by any of the persons referred to in the table
above under the heading ?Ownership of Securities of the Corporation? except as disclosed in the
footnotes to that table with respect to Common Shares of the Corporation that may be acquired upon the
exercise of outstanding stock options, the settlement of performance bonuses and the settlement of
RSUs.

Benefits from the Amended and Restated RCF Loan

Except as disclosed herein, none of the persons referred to in the table above under the heading
?Ownership of Securities of the Corporation? will derive any direct or indirect benefits as a result of the
Corporation entering into the Amended and Restated RCF Loan.

Material Changes in the Affairs of the Corporation

Except as disclosed herein, there are no plans or proposals for material changes in the affairs of the
Corporation expected to arise as a result of entering into the Amended and Restated RCF Loan.

Previous Trading in Common Shares and Prior Sales

Trading

The common shares of the Corporation are listed and posted for trading on the TSX under the stock
symbol ?BUF?. The closing price of the Common Shares of the Corporation on the TSX on May 15, 2015,
the last trading date prior to the date of this Information Circular, was $0.05.

The following table sets forth the reported high and low prices and the trading volumes for the Common
Shares of the Corporation for the periods indicated as reported by sources the Corporation believes to be
reliable.

                                               Price Range ($)                     Aggregate Trading Volume
                                        High                     Low
    2015
           May 1-15, 2015              $0.05                    $0.04                            565,262
           Apr. 2015                   $0.07                    $0.05                            817,505
           Mar. 2015                   $0.095                   $0.05                            220,364
           Feb. 2015                   $0.10                    $0.055                           32,642
           Jan. 2015                   $0.07                    $0.06                            43,760
    2014
           Dec. 2014                   $0.13                    $0.045                           291,262
           Nov. 2014                   $0.125                   $0.10                            153,820
           Oct. 2014                   $0.14                    $0.11                            277,907
           Sept. 2014                  $0.16                    $0.10                            125,062


                                                                
                                               Price Range ($)                       Aggregate Trading Volume
                                          High                     Low
        Aug. 2014                      $0.18                     $0.10                           120,150
        Jul. 2014                     $0.145                    $0.075                           101,782
        Jun. 2014                      $0.13                     $0.07                            93,870
        May. 2014                      $0.08                    $0.075                           273,951

Prior Sales

In connection with the Existing RCF Loan and loan arrangements with RCF prior thereto, the Corporation
issued Common Shares to RCF as follows:

    -   The Corporation issued 17,270,571 Common Shares to RCF to settle the interest owing for the
        period between January 1, 2015 and the date of this Circular, at prices per share ranging
        between C$0.0610 and C$0.0812, being the 20-day VWAP as at the dates the payments were
        due.

    -   The Corporation issued 9,264,060 Common Shares to RCF between July 3, 2014 and December
        31, 2014, to settle the interest on the Existing RCF Loan, at prices per share ranging between
        C$0.0982 and C$0.1308, being the 20-day VWAP as at the dates the payments were due.

    -   On July 3, 2014, the Corporation closed the final tranche of the Existing RCF Loan and issued
        5,531,120 Common Shares at a price of C$0.1446 per share to settle the establishment fee
        thereon.

    -   Prior to the closing of the final tranche of the Existing RCF Loan, the Corporation issued Common
        Shares to RCF in settlement of interest on the original convertible loan facility of US$6.0 million
        (?RCF Original Convertible Loan?) and the bridge loan facility of US$4.0 million (?Previous RCF
        Bridge Loan?). For the period between March 1, 2014 and June 30, 2014 the Corporation issued
        5,324,449 shares at prices per share ranging between C$0.0787 to C$0.1247, being the 20-day
        VWAP as at the dates the payments were due.

In addition, during the prior 12 months, the Corporation granted an aggregate of 4,552,397 stock options
to certain directors, officer, employees and consultants, as follows:

    -   On August 12, 2014, the Corporation granted an aggregate of 375,000 stock options to certain
        directors of the Corporation. The options have an exercise price of $0.11, have a term of five
        years and are subject to the following vesting schedule: one third of the stock options vest on the
        grant date, one third of the stock options vest on the first anniversary of the grant and the balance
        vest on the second anniversary of the grant.

    -   On April 20, 2015, the Corporation granted an aggregate of 4,177,397 stock options to certain
        directors, officers and employees of the Corporation. The options have an exercise price of
        $0.065, have a term of five years and are subject to the following vesting schedule: one third of
        the stock options vest on the grant date, one third of the stock options vest on the first
        anniversary of the grant and the balance vest on the second anniversary of the grant.

Lastly, the Corporation issued an aggregate of 34,817,237 common share purchase warrants in the
Company to Investec on July 3, 2014. Each warrant entitles the holder to acquire one Common Share at
an exercise price of C$0.1446 until July 3, 2019.

Please see also ?Matters to be Considered - Settlement of Bonuses and Restricted Stock Units?.
                                                         
Additional Information

Additional information relating to the Corporation may be found under the profile of the Corporation on
SEDAR at www.sedar.com. Additional financial information is provided in the Corporation's audited
financial statements and related management?s discussion and analysis for the financial year ended
December 31, 2014, and the most recent interim financial statements of the Corporation and related
management?s discussion and analysis, which can be found under the profile of the Corporation on
SEDAR. Shareholders may also request these documents from the Corporate Secretary of the
Corporation by email at lorraine.harrison@buffalocoal.co.za or by telephone at +27 11 656 3210.

Board of Directors Approval

The contents of this Circular and the sending thereof to Shareholders of the Corporation have been
approved by the Board.

BY ORDER OF THE BOARD OF DIRECTORS

Craig Wiggill
Chairman

Toronto, Ontario
May 19, 2015



1 June 2015

Sponsor to Buffalo Coal Corp.
Questco (Pty) Ltd




                                            

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