TRANS HEX GROUP LIMITED - TRANS HEXS NAMAQUALAND MINES ACQUISITION - VOLUNTARY MEDIA RELEASE

TRANS HEX’S NAMAQUALAND MINES ACQUISITION - VOLUNTARY MEDIA RELEASE

Trans Hex Group Limited

(Incorporated in the Republic of South Africa)

(Registration number: 1963/007579/06)

Share code: TSX

ISIN: ZAE000018552

("Trans Hex" or the "Company")





TRANS HEX’S NAMAQUALAND MINES ACQUISITION - VOLUNTARY MEDIA RELEASE



“This acquisition has the potential to generate positive returns and value for shareholders in

the short to medium term.” Llewellyn Delport, CEO of Trans Hex.



As announced on 29 October 2013, Trans Hex has reached agreement with De Beers

Consolidated Mines Limited (DBCM) in regards to the acquisition by Trans Hex’s 40% held

company, Emerald Panther Investments 78 (Pty) Limited (EPI), of assets and liabilities

relating to Namaqualand Mines (NM) (the Transaction). The parties are in the final stages of

concluding the amendment to the sale agreement between Trans Hex and DBCM that will

address the last outstanding issue regarding the State’s 20% interest in NM to close the

Transaction.



A number of aspects of the Transaction have changed since the first announcement in May

2011. As such, Trans Hex has updated shareholders on the most relevant terms of the

Transaction.



Trans Hex shareholders are encouraged to access the full details pertaining to this

acquisition, which can be found on Trans Hex’s website (www.transhex.co.za).



The salient points of the NM Competent Persons Report (CPR), as compiled by the mining

industry consultancy group Snowden in October 2013, are as follows:



   -   Total mineral resources are 6.62 million carats at an average grade of 5.60 carats

       per hundred tons.

   -   Total carats to be mined are 1.826 million carats at an average grade of 9.27 carats

       per hundred tons. The annual production will peak at 316 000 carats while the

       average production during the first seven years of the project will be 218 000 carats.

       Thereafter production will reduce to just over 50 000 carats for the remainder of the

       life of the project when tailing mineral resources are treated.

   -   The average diamond price is US$221 per carat.

   -   The South African Rand / US$ exchange rate used was R9.60.

   -   Gross revenue of R3 875 million will be generated over the life of the mine, while

       operating cost over the life of the mine will amount to R1 504 million.

   -   Total capital expenditure will be R353 million over the life of the mine.

   -   Funding for the Transaction will have the following elements:

            o An insurance company that is acceptable to the Department of Mineral

              Resources will issue a rehabilitation guarantee of R165.9 million;

            o The IDC will provide total funding of R189 million for the acquisition of mining

              equipment and working capital; and

            o EPI shareholders will fund R130 million towards the start-up capital.

   -   No Trans Hex shareholder funding is required for the Transaction.

   -   The NPV valuation is based on a real model and its future cash flows were

       discounted at a rate of 12%. The CPR value on a project basis is R478 million and,

       after project financing arrangements are taken into consideration, the value is R545

       million.

   -   The IRR of the project is 43%.

   -   Trans Hex will manage NM as the exclusive operator and market the diamonds for a

       total fee of 5.5% of revenue, which amounts to R213 million over the life of the

       project. This fee increases Trans Hex’s effective interest in NM to 52%.

   -   The NPV of Trans Hex’s 40% interest, including the after tax cash flows of the

       management and marketing fees, amounts to R300 million or R2.83 per share.

   -   Trans Hex’s average cash flow from NM during FY 2016 to FY 2021 is R73 million

       per year or R0.69 per share. From 2022 onwards, tailing mineral resources are

       treated at an average cash flow of R20 million per year.

   -   Trans Hex will invest R52 million and receive cash flows of R643 million over the life

       of the project.



According to Mr Delport, the acquisition of NM by EPI will increase the scope of Trans Hex’s

South African operations to 14 years. Importantly, the acquisition also provides Trans Hex

with access to the rich channel gravels that extend from land into the South African sea

concessions held by Trans Hex and are difficult to explore without access from land.



For and on behalf of the board

Cape Town

21 November 2013



Attorneys

Bowman Gilfillan Inc.



JSE Sponsor

Sasfin Capital

A division of Sasfin Bank Limited



ENQUIRIES:

Tracey Peterson

Cell:      083 408 7173

Email:     tracey@aprio.co.za


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