Ann: Media Release - Quarterly Activities Report , page-48

re: Ann: Media Release - Quarterly Activities... BigJack

I feel it is essential to realise that the transaction with WWR to establish Goliath is a reverse aquisition, and when you aquire something you generally exchange some value to the other party in the transaction.

In this case GDO is acquiring in very simple terms a listing vehicle. We are giving the current WWR shareholders 26% of our Megamine assets, in exchange for effective control of their company (including Control of the board, managerial control, a majority shareholding, and a new name)

To asertain whether this is a fair deal it is necessary to comapare what 26% of Megamine is worth in its current form as opposed to what 74% is worth in its new form to GDO holders plus savings associated with avoiding an IPO. This is a key point IMO.

Currently it is obvious to most here that Megamine is contributing no value to our current market cap.

By separating out the assets of Megamine into a separate company listed on the JSE from those of ME and Ventersburg, mangement are forcing the market to place some value on the Megamine assets. For example if Goliath has an MC(when trading) of 30m AUD equililant then 22m worth can be carried over as an asset value in analysts valuation of GDO.

So one of the key benefits to GDO holders of this transaction is it forces Megamine assets to be attributed some value.

The second benefit I see is that it clearly defines what GDO is as a company. Namely a South African gold miner operating and developing SHALLOW gold resources.

It is essential that GDO is defined as unique in the SA gold industry (we are unique in terms of the lowest C1 costs for any goldmine in SA). The SA gold industry is known as having the highest cost base in the world, which no doubt is something prospective investors to GDO have in mind when they first learn GDO operates a mine in SA. Separating the Megamine assets helps GDO reinforce we are SHALLOW miners and low cost.

Equally defining what Megamine is to potential investors is also important and i believe Froneman's vision is to rebirth East Rand as a gold province in SA. This no doubt will be Goliath's story.

I don't beleive selling Megamine is a good option at this stage as further exploration will likely build more value into the assets.