14.   MINING ASSETS VALUATION

14.11  

Valuation Adjustments Exxaro

The valuation adjustments include the following:

• The value of unallocated corporate expenses. This is based on an assumption of unallocated corporate overheads being ZAR1,577m (in 1 January 2006 money terms). All costs are discounted at the WACC derived for the Material Properties;
  
• The Net debt position as at 31 December 2005 which is stated as ZAR2,629m;
  
• Derivative Instruments totalling some ZAR5m negative which comprise:
  • The mark to market value of commodity contracts as at 31 December 2005 and valued by independent risk and treasury management experts is ZAR6m negative. This value was based on exchange rates of 1:6.3250 (USD:ZAR) and 1877 (USD/t) zinc price, and the prevailing market rates at the time;
  • The mark to market value of interest rate swaps as at 31 December 2005 and valued by independent risk and treasury management experts is ZAR0.5m negative; and
  • The mark to market value of currency contracts as at 31 December 2005 and valued by independent risk and treasury management experts is ZAR2m positive; and
• A purchase consideration of R1,603 million for 100% of Eyesizwe’s shares at 1 January 2006. The purchase consideration and value of Eyesizwe’s 35% interest in the Twistdraai JV was excluded as this transaction had not been finalised at the date of this report.