Legal dispute between Keaton Mining Proprietary Limited and Megacube Mining Proprietary Limited Keaton Energy Holdings Limited (Incorporated in the Republic of South Africa) (Registration number 2006/011090/06) JSE code: KEH ISIN code: ZAE000117420 ('Keaton' or the ‘Company’) LEGAL DISPUTE BETWEEN KEATON MINING PROPRIETARY LIMITED (KEATON MINING) A 100% HELD SUBSIDIARY OF THE COMPANY AND MEGACUBE MINING PROPRIETARY LIMITED (MEGACUBE) Shareholders are referred to the 31 March 2015 Annual Financial Statements of the Company with specific reference to notes 27 and 30 to the financial statements distributed, which states the following: “Included in trade and other payables (note 27) is an amount of R42.5m for contract mining services rendered by Megacube to Keaton Mining. As a result of several alleged breaches of the contract mining agreement, Keaton Mining disputes that this amount is due and owing to Megacube. As a result of Megacube’s breaches of the contract mining agreement, Keaton Mining has lodged several counterclaims against Megacube for damages and losses sustained. Keaton Mining delivered a notice of termination of the agreement to Megacube on 16 May 2012 in accordance with the provisions of the agreement and subsequently terminated the agreement on 5 July 2012. The litigation is ongoing.” The matter was referred to arbitration which took place during February 2016 and March 2016. On 9 March 2016, and by agreement between the parties, an interim award was made in terms whereof the merits of the dispute were separated from the quantum. Closing arguments regarding the merits were heard in April 2016. The board of directors of the Company is pleased to announce that the following award was made in favour of the Company on 28 April 2016 regarding the merits of the dispute. The more substantial claims awarded in favour of the Company are listed below: 1. Megacube’s claim of R42.5m is dismissed with cost; 2. Megacube is liable to compensate Keaton Mining for the damages which flow from its failure to mine and deliver 300 000 tons of ROM coal per month; 3. Megacube is liable to make payment to Keaton Mining in such an amount equalling the present value of 657 583.8 tons of ROM coal not mined; and 4. Megacube is directed to pay Keaton Mining’s costs, such costs to include the employment of two counsel and the qualifying fees of expert witnesses. The quantum of the disputes will be dealt with in the coming months and a follow up announcement regarding the outcome of the quantification portion of the arbitration will be released when that part of the arbitration has been finalised or settled. The Company’s headline earnings per share for the year ended 31 March 2016 will benefit from the reversal of the R42.5m claim of Megacube, which was previously recorded in trade and other payables. Johannesburg 3 May 2016 Sponsor Investec Bank Limited Date: 03/05/2016 11:00:00 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.