Settlement of the Pappas Quarry waste disposal facility Delta EMD Limited (Incorporated in the Republic of South Africa) Registration number 1919/006020/06 ISIN: ZAE000132817 Share code: DTA ("Delta" or "the Group") SETTLEMENT OF THE PAPPAS QUARRY WASTE DISPOSAL FACILITY Shareholders are referred to the Group’s statement of unaudited results for the six months ended 27 June 2015 released on the Stock Exchange News Service of the JSE Limited on 14 July 2015, and to the disclosure therein related to an obligation arising under an agreement for the disposal of plant residue at a landfill site. Shareholders are advised that the referred obligation arises under a 1985 Supply Agreement between Delta E.M.D. (Proprietary) Limited ("Delta EMD") (a subsidiary of Delta) and Manganese Metal Company ("MMC"), and a 2003 Addendum thereto (the "MMC Agreement"). The MMC Agreement provided for the disposal of Delta EMD’s plant residue at Pappas Quarry, a waste disposal facility developed, maintained and operated by MMC, and located at ERF 1517, West Acres, Extension 12, Nelspruit ("the Pappas Quarry WDF"). The MMC Agreement obligated Delta EMD to pay to MMC a portion of the annual operating costs, and eventual rehabilitation and restoration costs, incurred by MMC in connection with the Pappas Quarry WDF. Delta EMD’s portion of such costs is determined with reference to the volumes of residue disposed by each of Delta EMD and MMC, and approximates 26%. As detailed immediately below Delta has: i) provided annually for an estimated portion of the eventual costs to be incurred by MMC rehabilitating and restoring the site (as estimated by Golder Associates annually), and ii) expensed annually the amounts paid each year to MMC under the MMC Agreement toward annual operating costs: Year Closure Provision (R) Annual Expense (R) 2009 7 228 038 1 914 268 2010 7 981 234 1 126 090 2011 7 261 800 1 448 555 2012 8 108 079 1 601 243 2013 7 293 880 1 719 131 2014 7 304 133 1 068 305 With the winding up of the Group’s business, the Board determined to provide as at 27 December 2014 for both: i) a portion of the costs MMC was likely to incur in connection with the rehabilitation and restoration of the Pappas Quarry WDF (R7 304 133), and ii) a portion of the net present value of the future holding costs MMC was likely to incur following rehabilitation and restoration (R15 000 000). The provisions were determined with reference to reports prepared by Golder Associates. During June 2014 Delta EMD initiated discussions with MMC to explore the payment of a lump sum in settlement of any remaining obligations under the MMC Agreement. On the basis of the historical reports prepared by Golder Associates and provided to Delta EMD by MMC, Delta EMD offered to pay MMC R22 500 000 in full settlement of any remaining contractual obligation under the MMC Agreement. By letter dated 1 September 2015 MMC provided Delta EMD additional due diligence information suggesting that the Pappas Quarry WDF closure and holding costs most likely would exceed earlier estimates. The Group has undertaken a detailed review of the additional due diligence information provided by MMC and has engaged with MMC to identify opportunities to resolve any remaining obligations or liabilities relating to the Pappas Quarry WDF. Delta EMD and MMC have reached agreement pursuant to which: i) Delta EMD will pay into escrow R37.5 million; ii) MMC will be permitted to withdraw from the escrow for reimbursement of any capital expenditures made by MMC relating to the remediation, rehabilitation and/or closure of the Pappas Quarry WDF; and, iii) MMC will release, and will defend, indemnify and hold harmless, the Group from and against any and all obligations or liabilities the Group might now or hereafter have with respect to the Pappas Quarry WDF. 17 November 2015 Nelspruit Sponsor RAND MERCHANT BANK (a division of FirstRand Bank Limited) Date: 17/11/2015 03:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.