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Buffalo Coal Corp - Unaudited Interim Results For The Period Ended 30 June 2015

Release Date: 14/08/2015 15:18:00      Code(s): BUC     
BUFFALO COAL CORP.
(previously Forbes & Manhattan 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
"Buffalo Coal" or "the Company"

CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
(Unaudited)

For the three and six months ended June 30, 2015
and the four and seven months ended June 30, 2014
(Presented in South African Rands)

Condensed Interim Consolidated Statements of Financial Position
(Presented in South African Rands)

                                                              June 30,    December 31,       June 30,   
                                                                  2015            2014           2015   
                                                                                             (Note 1)   
                                                 Notes               R               R             C$   
Assets                                                                                                  
Non-current assets                                                                                      
Property, plant and equipment                              550 751 401     561 403 916     55 390 311   
Investment in financial assets                              32 443 104      29 134 182      3 262 876   
Deferred tax asset                                          43 557 372      15 495 588      4 380 663   
Other receivables                                            4 835 442      14 238 959        486 311   
Long-term restricted cash                                   11 200 000      11 200 000      1 126 409   
Total non-current assets                                   642 787 319     631 472 645     64 646 570   
Current assets                                                                                          
Trade and other receivables                                 93 522 263      95 474 959      9 405 745   
Inventories                                                 40 399 139      27 034 967      4 063 033   
Non-interest bearing receivables                             1 645 689       1 587 765        165 511   
Taxation receivable                                          1 081 113       2 336 605        108 730   
Cash and cash equivalents                                   23 632 538      12 120 081      2 376 778   
Total current assets                                       160 280 742     138 554 377     16 119 797   
Total assets                                               803 068 061     770 027 022     80 766 367   
Equity and liabilities                                                                                  
Capital and reserves                                                                                    
Share capital                                              955 219 185     937 966 442     96 068 548   
Currency translation reserve                             (219 945 085)   (219 945 085)   (22 120 373)   
Reserves                                                    16 714 296      19 599 807      1 680 994   
Accumulated retained loss                                (616 310 266)   (497 359 808)   (61 983 713)   
Equity attributable to owners of the company               135 678 130     240 261 356     13 645 456   
Non-controlling interest                                     4 339 142       4 339 142        436 396   
Total equity                                               140 017 272     244 600 498     14 081 852   
Non-current liabilities                                                                                 
Borrowings                                                 123 006 541     132 047 902     12 371 045   
Warrant liability                                            1 986 746       8 818 534        199 812   
RCF loan facilities                                  3     157 376 364     132 542 252     15 827 696   
Conversion option liability                          3     144 135 605      54 088 555     14 496 043   
Asset retirement obligation                                 22 903 691      18 758 187      2 303 476   
Total non-current liabilities                              449 408 947     346 255 430     45 198 072   
Current liabilities                                                                                     
Trade and other payables                                   192 977 633     170 506 885     19 408 196   
Current portion of borrowings                               18 000 000       6 000 000      1 810 301   
Current portion of asset retirement obligation               2 664 209       2 664 209        267 946   
Current liabilities                                        213 641 842     179 171 094     21 486 443   
Total liabilities                                          663 050 789     525 426 524     66 684 515   
Total equity and liabilities                               803 068 061     770 027 022     80 766 367   


Commitments and contingencies                             1, 5

Approved on behalf of the Board:

Signed "Craig Wiggill", Director                                               Signed "Robert Francis", Director

The accompanying notes are an integral part of the condensed interim consolidated financial statements.

Condensed Interim Consolidated Statements of Profit or Loss and Other Comprehensive Income
(Presented in South African Rands)

                                                         6 months        7 months        3 months        4 months       6 months   
                                                            ended           ended           ended           ended          ended   
                                                         June 30,        June 30,        June 30,        June 30,       June 30,   
                                            Notes            2015            2014            2015            2014           2015   
                                                                                                                        (Note 1)   
                                                                R               R               R               R             C$   
Revenue                                               343 920 026     383 486 041     179 219 667     220 169 793     34 588 813   
Cost of sales                                       (377 296 860)   (425 554 945)   (195 846 902)   (242 902 561)   (37 945 596)   
Gross loss                                           (33 376 834)    (42 068 904)    (16 627 235)    (22 732 768)    (3 356 783)   
Other (expense)/income - net                    4    (42 718 303)   (160 371 813)    (47 151 622)       6 399 634    (4 296 277)   
General and administration expenses                  (37 722 014)    (51 166 985)    (18 171 530)    (23 955 973)    (3 793 788)   
Loss before the undernoted                          (113 817 151)   (253 607 702)    (81 950 387)    (40 289 107)   (11 446 848)   
Finance income                                            842 714       1 338 169         546 978         428 391         84 754   
Finance expense                                      (36 063 517)    (17 437 901)    (19 085 467)    (10 785 916)    (3 626 989)   
Loss before income tax                              (149 037 954)   (269 707 434)   (100 488 876)    (50 646 632)   (14 989 083)   
Income tax benefit                                     26 710 145      31 407 385      12 133 057      12 533 533      2 686 300   
Loss for the period                                 (122 327 809)   (238 300 049)    (88 355 819)    (38 113 099)   (12 302 783)   
Other comprehensive loss                                        -               -               -               -              -   
Total comprehensive loss for the                                                                                                   
period                                              (122 327 809)   (238 300 049)    (88 355 819)    (38 113 099)   (12 302 783)   
Loss attributable to:                                                                                                              
- Owners of the parent                              (122 327 809)   (238 300 049)    (88 355 819)    (38 113 099)   (12 302 783)   
- Non-controlling interest                                      -               -               -               -              -   
                                                    (122 327 809)   (238 300 049)    (88 355 819)    (38 113 099)   (12 302 783)   
Net loss per share - basic and diluted                     (1.77)          (6.30)          (1.16)          (0.97)         (0.18)   
Headline loss per share - basic and diluted                (1.82)          (6.12)          (1.17)          (0.97)         (0.18)   
Weighted average number of common                                                                                                  
shares outstanding:                                                                                                                
- Basic                                                69 088 164      37 818 850      76 138 298      39 323 403     69 088 164   
- Diluted                                              69 088 164      37 818 850      76 138 298      39 323 403     69 088 164   

The accompanying notes are an integral part of the condensed interim consolidated financial statements.

Condensed Interim Consolidated Statements of Changes in Equity
(Presented in South African Rands)

                                                                    Attributable to owners of the Group                                                 
                                                                           Reserves                                              
                                                                                                                   Currency                             Non-           
                                  No. of shares          Share        Option     BEE option     Accumulated     translation                      controlling      
                                         issued        capital       reserve        reserve   retained loss         reserve            Total        interest     Total equity
                                                             R             R              R               R               R                R               R                R
Balance at November 30, 2013         35 070 108    937 251 979    21 669 502      9 073 711   (186 324 916)   (247 266 389)      534 403 887       4 339 142      538 743 029
Shares issued in relation to RCF  
Convertible Loan                      5 706 239      6 713 963             -              -               -               -        6 713 963               -        6 713 963
Stock options expired/cancelled               -              -  (10 511 874)              -      10 511 874               -                -               -                -
Other comprehensive gain/(loss)      
for the period                                -      8 140 754       194 122              -               -    (21 590 833)     (13 255 957)               -     (13 255 957)
Net loss for the period                       -              -             -              -   (238 300 049)               -    (238 300 049)               -    (238 300 049)
Other comprehensive gain/(loss)    
due to change in functional    
currency                                      -              -             -              -    (48 912 137)      48 912 137                -               -                -
Balance at June 30, 2014             40 776 347    952 106 696    11 351 750      9 073 711   (463 025 228)   (219 945 085)      289 561 844       4 339 142      293 900 986
Shares issued in relation to RCF  
Convertible Loan                     16 770 364     20 724 491             -              -               -               -       20 724 491               -       20 724 491
Stock-based compensation                      -              -       302 734              -               -               -          302 734               -          302 734
Stock options expired/cancelled               -              -   (1 128 388)              -       1 128 388               -                -               -                -
Cancellation of shares in escrow    (1 350 000)   (34 864 745)             -              -      34 864 745               -                -               -                -
Net loss for the period                       -              -             -              -    (70 327 713)               -     (70 327 713)               -     (70 327 713)
Balance at December 31, 2014         56 196 711    937 966 442    10 526 096      9 073 711   (497 359 808)   (219 945 085)      240 261 356       4 339 142      244 600 498
Shares issued in relation to RCF   
convertible loan                     26 195 466     17 252 743             -              -               -               -       17 252 743               -       17 252 743
Stock-based compensation                                             491 840                                                         491 840               -          491 840
Stock options expired/cancelled               -              -   (3 377 351)              -       3 377 351               -                -               -                -
Net loss for the period                       -              -             -              -   (122 327 809)               -    (122 327 809)               -    (122 327 809)
Balance at June 30, 2015             82 392 177    955 219 185     7 640 585      9 073 711   (616 310 266)   (219 945 085)      135 678 130       4 339 142      140 017 272

The accompanying notes are an integral part of the condensed interim consolidated financial statements.

Condensed Interim Consolidated Statements of Cash Flow
(Presented in South African Rands)

                                                                  6 months       7 months      6 months   
                                                                     ended          ended         ended   
                                                                  June 30,       June 30,      June 30,   
                                                                      2015           2014          2015   
                                                                                               (Note 1)   
                                                                         R              R            C$   
Cash flows from operating activities                                                                      
Cash utilized in operations                                    (8 804 323)   (38 727 583)     (885 473)   
Interest received                                                  842 714        783 617        84 754   
Interest paid                                                  (6 414 577)    (7 953 805)     (645 128)   
Taxation (paid)/received                                          (96 149)         91 390       (9 670)   
Net cash utilized in operating activities                     (14 472 335)   (45 806 381)   (1 455 517)   
Cash flows from investing activities                                                                      
Investment in financial assets                                 (2 444 277)    (2 675 100)     (245 824)   
Purchase of property, plant and equipment                     (34 535 377)   (41 230 140)   (3 473 301)   
Proceeds from the disposal of property, plant and equipment      5 500 000      7 051 872       553 147   
Settlement of cancelled Riversdale Acquisition                           -     29 280 423             -   
Movement in non-interest bearing receivables                      (57 924)      (193 847)       (5 825)   
Movement in restricted cash                                              -    (4 204 599)             -   
Net cash utilized in investing activities                     (31 537 578)   (11 971 391)   (3 171 803)   
Cash flows from financing activities                                                                      
Proceeds from RCF Convertible Loan                              57 656 620     48 913 264     5 798 656   
Issuance costs related to the RCF Convertible Loan               (134 250)    (3 733 251)      (13 502)   
Proceeds from borrowings                                                 -      7 906 061             -   
Movement in loans payable                                                -      (214 798)             -   
Net cash generated from financing activities                    57 522 370     52 871 276     5 785 154   
Net increase/(decrease) in cash and cash equivalents            11 512 457    (4 906 494)     1 157 834   
Cash and cash equivalents at the beginning of the period        12 120 081     18 174 486     1 218 944   
Exchange loss on cash and cash equivalents                               -    (3 769 512)             -   
Cash and cash equivalents at the end of the period              23 632 538      9 498 480     2 376 778   

The accompanying notes are an integral part of the condensed interim consolidated financial statements.

Notes to the Condensed Interim Consolidated Financial Statements
For the periods ended June 30, 2015 and June 30, 2014
(Presented in South African Rands)

1      BASIS OF PREPARATION

The unaudited condensed interim consolidated financial statements (the "Interim Results") of Buffalo Coal Corp. ("BC
Corp" or the "Company") and its subsidiaries (the "Group") for the periods ended June 30, 2015 and June 30, 2014 have
been prepared in accordance with the recognition and measurement criteria of International Financial Reporting
Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB") and have been prepared in
accordance with accounting policies based on the IFRS standards and International Financial Reporting Interpretations
Committee ("IFRIC") interpretations and are in compliance with IAS 34, Interim Financial Reporting.

The Interim Results have not been audited by the Group's external auditors. The Interim Results do not include all the
information and disclosures required in the annual financial statements and should be read in conjunction with the
Group's annual financial statements for the year ended December 31, 2014, which have been prepared in accordance
with IFRS. The Group has adopted the required new or revised accounting standards in the current period, as further set
out in note 2 below, none of which had a material impact on the Group's results.

The preparation of the Interim Results requires management to make judgments, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. In
preparing these Interim Results, the significant judgments made by management in applying the Group's accounting
policies and the key sources of estimation and uncertainty were the same as those applied to the consolidated
annual financial statements for the year ended December 31, 2014.

The Interim Results have been prepared on the basis of accounting principles applicable to a going concern, which
assume that the Group will continue in operation for the foreseeable future and will be able to realize its assets and
discharge its liabilities in the normal course of operations. The Company entered into a second amended and restated
agreement with Resource Capital Fund V L.P. ("RCF") ("Second Amended RCF Agreement") on March 27, 2015 which
included a bridge loan of US$4.0 million, of which US$2.7 million was drawn as at June 30, 2015 and the remainder of
which was drawn subsequent to June 30, 2015, for working capital purposes (note 3). The performance at Magdalena
had deteriorated significantly over the course of CY2014, which resulted in the Company implementing a restructuring at
Buffalo Coal Dundee (Pty) Ltd ("BC Dundee") in March 2015 and a further restructuring being implemented in Q3 2015.
The restructuring to date has resulted in the Company outperforming expectations in terms of current production levels,
and consequently unit costs, however, market conditions have deteriorated and the Company continues to incur
operating losses and is dependent upon reaching profitable levels of operation in the future to support working capital
needs. Current market conditions cast significant doubt as to whether or when the Company can attain profitability and
positive cash flow from operations and continue as a going concern.

It is likely that the Company will not meet the Investec Bank Limited ("Investec") covenants at December 31, 2015. The
Company has initiated discussions with Investec in this regard.

The Company's assessed loss position has again increased this quarter, further increasing the deferred tax asset. The
Company continues to review the likelihood of the deferred tax asset being utilized in the future as is reflected in the
Company's current Life Of Mine following the implementation of the current restructurings.

If the going concern assumption was not appropriate for the Interim Results of the Group then adjustments would be
necessary to the carrying values of assets and liabilities, the reported revenues and expenses and the statement of
financial position classifications used. Such adjustments could be material and adverse in nature.

References to CYQ1 2015 and CYQ2 2015 mean the three months ended March 31, 2015 and June 30, 2015 respectively
and references to CYQ1 2014 and CY 2014 mean the four months ended June 30, 2014 and the ten months ended
December 31, 2014.

References to "R", "Rands" mean South African Rands, "C$" mean Canadian Dollars and to "US$" mean United States
Dollars.

Convenience rate translation

The Company's functional and presentation currency is Rands. The Canadian Dollar amounts provided in the Interim
Results represent supplementary information solely for the convenience of the reader. The financial position as of
June 30, 2015 and the financial results for the six months ended June 30, 2015 were translated into Canadian Dollars
using a convenience translation at the rate of C$1:R9.9431, which is the exchange rate published on Oanda.com as of
June 30, 2015. Such presentation is not in accordance with IFRS and should not be construed as a representation that
the Rand amounts shown could be readily converted, realized or settled in Canadian Dollars at this or at any other rate.

2       NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

The following standards, amendments and interpretations are issued and effective for the first time for the
period ended June 30, 2015:

Amendments to IAS 19 ? 'Defined Benefit Plans: Employee Contributions'
These narrow scope amendments apply to contributions from employees or third parties to defined benefit plans. The
objective of the amendments is to simplify the accounting for contributions that are independent of the number of years
of employee service, for example, employee contributions that are calculated according to a fixed percentage of salary.
This amendment has not had a significant impact on the Group.

Annual Improvements to IFRSs 2010-2012 Cycle:

IFRS 2, 'Share-based Payments' - The amendments clarify the definition of a 'vesting condition' and separately define
'performance condition' and 'service condition'.

IFRS 3, 'Business Combinations' ? The amendments clarify that a contingent consideration that is classified as an asset or
a liability should be measured at fair value at each reporting date, irrespective of whether the contingent consideration
is a financial instrument within the scope of IFRS 9 or IAS 39 or a non-financial asset or liability. Changes in fair value
(other than measurement period adjustments) should be recognized in profit or loss.

IFRS 8, 'Operating Segments' - The amendments require an entity to disclose the judgments made by management in
applying the aggregation criteria to operating segments, including a description of the operating segments aggregated
and the economic indicators assessed in determining whether the operating segments have 'similar economic
characteristics'; and clarify that a reconciliation of the total of the reportable segments' assets to the entity's assets
should only be provided if the segment assets are regularly provided to the chief operating decision-maker.

IFRS 13, 'Fair Value Measurements' - The amendments to the basis for conclusions of IFRS 13 and consequential
amendments to IAS 36 and IFRS 9 did not remove the ability to measure short-term receivables and payables with no
stated interest rate at their invoice amounts without discounting, if the effect of discounting is immaterial.

IAS 16, 'Property, Plant and Equipment' and IAS 38, 'Intangible Assets' - The amendments remove perceived
inconsistencies in the accounting for accumulated depreciation/amortization when an item of property, plant and
equipment or an intangible asset is revalued. The amended standards clarify that the gross carrying amount is adjusted
in a manner consistent with the revaluation of the carrying amount of the asset and that accumulated
depreciation/amortization is the difference between the gross carrying amount and the carrying amount after taking
into account accumulated impairment losses.

IAS 24, Related Party Disclosure - The amendments clarify that a management entity providing key management
personnel services to a reporting entity is a related party of the reporting entity. Consequently, the reporting entity
should disclose as related party transactions the amounts incurred for the service paid or payable to the management
entity for the provision of key management personnel services. However, disclosure of the components of such
compensation is not required.

The amendments did not have a significant impact on the Group.

Annual Improvements to IFRSs 2011-2013 Cycle:

IFRS 3 - The amendment clarifies that the standard does not apply to the accounting for the formation of all types of
joint arrangements in the financial statements of the joint arrangement itself.

IFRS 13 ? The amendment clarifies that the scope of the portfolio exception for measuring the fair value of a group of
financial assets and financial liabilities on a net basis includes all contracts that are within the scope of, and accounted
for in accordance with, IAS 39 or IFRS 9, even if those contracts do not meet the definitions of financial assets or financial
liabilities within IAS 32.

IAS 40, 'Investment Property' - The amendment clarifies that IAS 40 and IFRS 3 are not mutually exclusive and application
of both standards may be required. The guidance in IAS 40 assists preparers to distinguish between investment property
and owner-occupied property. Preparers also need to refer to the guidance in IFRS 3 to determine whether the
acquisition of an investment property is a business combination.

The amendments did not have a significant impact on the Group.

3       RCF LOAN FACILITIES

On March 27, 2015, BC Corp closed the Second Amended RCF Agreement and secured an additional US$4.0 million loan
facility which was advanced as a bridge loan ("2015 Bridge Loan") and, on June 19, 2015, upon the Company receiving
shareholder approval at the annual and special meeting of shareholders, rolled over into the US$25.0 million loan
facility ("Existing RCF Convertible Loan"), under the same terms and conditions except for the amendments to the
interest rate and conversion price on the full US$29.0 million facility ("RCF Convertible Loan").

The 2015 Bridge Loan bore interest at a rate of 15% per annum, payable on the maturity date which was the earlier of
the date on which the shareholder approval was received or June 30, 2015. Upon receipt of the shareholder approval,
interest became payable in common shares of the Company ("Common Shares") at a price per share equal to the 20-day
volume weighted average price ("VWAP") as at the date the payment was due. No establishment fees were incurred on
the 2015 Bridge Loan.

Upon receipt of the shareholder approval, the interest rate on the RCF Convertible Loan was increased to 15% per
annum and the conversion price was decreased to C$0.0469, a 25% discount to the 5-day VWAP as at January 30, 2015.

In terms of IAS 39, Financial Instruments ? Recognition and Measurement, the revised terms of the Second Amended
RCF Agreement were considered "substantially" different to those of the Existing RCF Convertible Loan. Consequently,
IAS 39 required an extinguishment of the Existing RCF Convertible Loan and the recognition of a new financial liability as
at the date shareholder approval was obtained. A resultant loss on extinguishment of debt of R111.8 million was
recognized as of June 30, 2015, which had no cash flow impact on the Group (note 4).

The new financial liability has been recognized in two parts, a component liability with an initial value of R156.3 million,
and a conversion option liability with an initial value of R182.3 million. The component liability will be accreted to its face
value of US$27.7 million (R339.9 million), being the amount drawn down from the RCF Convertible Loan as at
June 30, 2015, using the effective interest rate method at approximately 43.5%.

The initial carrying value of the conversion option liability relating to the new financial liability was obtained using the
Black-Scholes option pricing model and the following assumptions: volatility of 77.41%, life of 4.04 years, risk free rate of
0.80% and expected dividend yield of 0%.

The fair value of the conversion option liability at June 30, 2015 was obtained using the Black Scholes option pricing
model and the following assumptions: volatility of 71.75%, life of 4.01 years, risk free rate of 0.80% and expected
dividend yield of 0%.

The Company issued Common Shares to RCF during CYQ2 2015 in settlement of interest owing on the Existing RCF
Convertible Loan for the periods ended March 31, 2015, April 30, 2015 and May 31, 2015. An additional 4 619 258,
4 926 229 and 6 202 191 Common Shares were issued at prices of C$0.0682, C$0.0610 and C$0.0502, respectively.

As of June 30, 2015, the Company had drawn US$27.7 million (R339.9 million) from the RCF Convertible Loan and had
US$1.3 million available for drawdown from the RCF Convertible Loan. Subsequent to June 30, 2015, the Company drew
the remaining US$1.3 million.

4      OTHER (EXPENSE)/INCOME - NET

                                                   6 months        7 months        3 months    4 months       6 months   
                                                      ended           ended           ended       ended          ended   
                                                   June 30,        June 30,        June 30,    June 30,       June 30,   
                                      Notes            2015            2014            2015        2014           2015   
                                                                                                              (Note 1)   
                                                          R               R               R           R             C$   
Foreign exchange (loss)/gain - net              (3 306 946)       4 728 777     (2 868 345)   1 512 705      (332 587)   
Impairment of escrow funds                                -    (19 426 928)               -           -              -   
impairment of goodwill, intangible                                                                                       
assets and property, plant and                                                                                           
equipment                                                 -   (152 007 765)               -           -              -   
Fair value adjustment on financial                                                                                       
assets                                              898 616         439 359       (161 063)   1 066 394         90 376   
Fair value adjustment on conversion                                                                                      
option and warrant liability                     71 520 530     (3 107 446)      65 704 454   (519 735)      7 192 981   
Loss on extinguishment of debt            3   (111 842 506)               -   (111 842 506)           -   (11 248 253)   
Other income                                         12 003       9 002 191       2 015 838   4 340 270          1 206   
                                               (42 718 303)   (160 371 813)    (47 151 622)   6 399 634    (4 296 277)   

5      COMMITMENTS AND CONTINGENCIES

Management Contracts

Management contracts in place require that payments of approximately R14.1 million be made upon the occurrence of a
change in control, other than a change of control attributable to RCF. As no triggering event has taken place, no
provision has been recognized as of June 30, 2015.

Capital Commitments

Capital expenditures contracted for at the statement of financial position date but not recognized in the condensed
interim consolidated financial statements are as follows:

                                                                                   June 30,   December 31,   June 30,   
                                                                                       2015           2014       2015   
                                                                                          R              R         C$   
Property, plant and equipment                                                     2 612 433     27 378 909    262 738   


Included in the R27.4 million disclosed as of December 31, 2014 are commitments relating to the purchase of machinery
and equipment which were funded by equipment advances from RCF.

Environmental Contingency

The Company's mining and exploration activities are subject to various laws and regulations governing the environment.
These laws and regulations are continually changing and generally becoming more restrictive. The Company believes its
operations are materially in compliance with all applicable laws and regulations. The Company has made, and expects to
make in the future, expenditures to continue to comply with such laws and regulations.

Outstanding Legal Proceedings

On March 20, 2015, the Association of Mineworkers and Construction Union ("AMCU") brought an application against
BC Dundee and Zinoju Coal (Pty) Ltd ("Zinoju") in the Labour Court of South Africa pertaining to the Section 189A
restructuring process implemented by BC Dundee during CYQ1 2015 in terms of the South African Labour Relations Act,
No 66 of 1995 ("LRA"), as announced on March 11, 2015. The matter was heard in Court on April 14, 2015. On April 24,
2015, the LRA dismissed the application brought by AMCU with costs. An application for leave to appeal was lodged by
AMCU on April 29, 2015, and the appeal record was filed on July 15, 2015. AMCU filed its heads of argument on July 31,
2015, and the Company has until September 30, 2015 to deliver its responding heads of argument. The hearing has been
set down by the Labour Appeal Court for November 4, 2015.

On April 10, 2015, BC Dundee received notice that AMCU had referred a dispute to the Commission for Conciliation,
Mediation and Arbitration ("CCMA") in respect of the substantive fairness of the S189A restructuring process
implemented in CYQ1 2015, which was heard on May 18, 2015. The CCMA referred the matter to the Labour Court.
AMCU has until August 17, 2015 to submit this dispute should they elect to pursue the matter.

On April 20, 2015, the trustees of the Avemore Trust brought an application in the High Court of South Africa against,
among others, the South African Minister of Mineral Resources ("the Minister"), BC Dundee and Zinoju. In terms of the
application, the trustees of the Avemore Trust challenged the decision by the Minister, subsequent to an internal appeal
process concluded during September 2014, to grant a converted mining right to BC Dundee and to grant consent for the
cession of the converted mining right to Zinoju. There have been various settlement offers between the parties, but
should settlement not be reached, BC Dundee and Zinoju intend to oppose the application.

6       TORONTO STOCK EXCHANGE ("TSX") DELISTING REVIEW

The TSX has advised the Company that it has been placed under a remedial delisting review in terms of whether the
Company meets the continued listing requirements of the TSX in the following areas: (i) the Company's financial
condition and operating results, and (ii) the market value of publicly held listed securities of the Company. The Company
has been granted an initial period of 120 days to comply with all requirements of the TSX for continued listing. The
Company is currently in discussions with the TSX to satisfy the continued listing requirements. In the event the Company
is unable to continue with the listing of its securities on the TSX, the Company will assess other listing alternatives.

7       RESTRUCTURING OF MINING OPERATIONS

In May 2015, BC Dundee initiated a second restructuring process focusing on Magdalena, which at that time continued
to underperform, particularly relative to the capital which had been spent on new equipment over the past year. This
restructuring is anticipated to be implemented by BC Dundee in Q3 2015. A provision for retrenchment costs of
R6.4 million (excluding leave pay which was previously provided for) has been recognized as of June 30, 2015.

Issuance of Share Capital

Subsequent to June 30, 2015, the Company issued additional shares to RCF in settlement of interest owing on the
Existing RCF Convertible Loan for June 2015, on the 2015 Bridge Loan for the period from March 30, 2015 to
June 30, 2015 and on the RCF Convertible Loan for July 2015. An additional 9 700 895 and 10 147 748 Common Shares
were issued at weighted average VWAP prices of C$0.0480 and C$0.446, in July and August respectively.

Of the 9 700 895 Common Shares issued in July, 2 397 202 related to accrued interest on the 2015 Bridge Loan, issued at
prices ranging from C$0.0467 to C$0.0682, and 7 303 693 related to the Existing RCF Convertible Loan, issued at a
C$0.0467.

In July 2015, restricted stock units to the value of C$0.1 million, which were previously allocated to a director of the
Company, were settled through the issuance of 2 083 333 Common Shares at a price of C$0.048. On April 20, 2015, the
Company granted performance bonuses to senior management of the Company which were settled through the
issuance of Common Shares at a deemed issuance price of C$0.048 (a 25% discount to the 5-day VWAP being C$0.063
per Common Share). On July 10, 2015, 3 441 667 shares were issued to senior management.

Resignation of Corporate Secretary

On July 23, 2015, the Company announced the resignation of Ms. Lorraine Harrison as Corporate Secretary of BC Corp,
effective July 24, 2015. On that date, the Company appointed Ms. Sarah Williams as Corporate Secretary of BC Corp.

Other Matters

Except for the matters discussed above, no other matters which management believes are material to the financial
affairs of the Company have occurred between the statement of financial position date and the date of approval of the
Interim Results.

Sponsor
Questco (Pty) Ltd
Date: 14/08/2015 03:18:00 Supplied by www.sharenet.co.za                     
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