3 February 2012

Terms announcement relating to the distribution of shares in Sephaku Fluoride Limited (“Sephaku Fluoride”) to Sephaku Holdings shareholders and withdrawal of cautionary

1. Introduction

Shareholders are referred to the detailed cautionary announcement dated 20 December 2011 which set out information relating to the distribution of shares in Sephaku Fluoride to Sephaku Holdings` shareholders in the ratio of 1 Sephaku Fluoride share valued at R0.59 per share for every 1 Sephaku Holdings share held (“the Sephaku Fluoride distribution”). The pro forma financial effects, the effective dates and the conditions precedent to the Sephaku Fluoride distribution are set out below.

2. Pro forma financial effects

The unaudited pro forma financial effects of the Sephaku Fluoride distribution are presented below. Such pro forma financial effects are the responsibility of the board of directors of Sephaku Holdings and are presented for illustrative purposes only to provide information on how the Sephaku Fluoride distribution may have impacted on the reported financial information of Sephaku Holdings if it had been implemented in the twelve months ended 30 June 2011. Because of their nature, the pro forma financial effects may not give a fair indication of the group`s financial position at 30 June 2011 or its future earnings.

Notes:

1. The figures in this column are extracted from the published audited consolidated annual financial results of Sephaku Holdings for the twelve months ended 30 June 2011.
2. The figures in this column are based on the figures set out in the previous column, having adjusted for the effects of the Sephaku Fluoride distribution and having taken account of an agreement between Sephaku Holdings and Sephaku Fluoride in terms of which, prior to the Sephaku Fluoride distribution, Sephaku Holdings will subscribe, in cash, for 177.1 million Sephaku Fluoride shares, which cash will be immediately applied to settle loans owing by Sephaku Fluoride and its subsidiaries to Sephaku Holdings (“the Sephaku Fluoride subscription agreement”); 5.4 million of the Sephaku Fluoride shares subscribed for are to be transferred to the holders of certain vested options over Sephaku Holdings shares and the balance, together with the Sephaku Fluoride shares currently in issue, distributed in terms of the Sephaku Fluoride distribution.
3. The figures in this column reflect the percentage change from the audited results of Sephaku Holdings presented in the first column and the pro forma figures set out in the second column.
4. For purposes of (loss)/earnings, headline (loss)/earnings and diluted (loss)/earnings per Sephaku Holdings ordinary share, it was assumed that the Sephaku Fluoride subscription agreement and the Sephaku Fluoride distribution were implemented on 1 July 2010.
5. For purposes of net asset value and net tangible asset value per Sephaku Holdings ordinary share, it was assumed that the Sephaku Fluoride subscription agreement and the Sephaku Fluoride distribution were implemented on 30 June 2011.
6. The diluted (loss)/earnings and diluted headline (loss)/earnings per Sephaku Holdings ordinary share and the diluted weighted average number of Sephaku Holdings ordinary shares in issue reflect the issue of Sephaku Holdings ordinary shares in respect of all issued share options.

3. Conditions precedent

The implementation of the Sephaku Fluoride distribution is conditional upon, inter alia, shareholder approval of the resolutions relating to the Sephaku Fluoride distribution.

4. Effective dates

The effective dates for the Sephaku Fluoride distribution are set out below:

Notes:

1. Unless otherwise indicated, all times are South African times. Any changes to the above dates and times will be released on SENS.
2. ii. In order to comply with the requirements of Strate, between Friday 16 March 2012 and Friday 23 March 2012, both days inclusive, no Sephaku Holdings ordinary shares may be dematerialised or rematerialised.

5. Documentation

A circular setting out further details of the Sephaku Fluoride distribution and containing a notice convening a general meeting to consider and vote on resolutions relating to, inter alia, the Sephaku Fluoride distribution and an amendment to the company’s share incentive scheme to allow for the inclusion of employees of associates of the Sephaku Holdings group, will be posted to shareholders on 7 February 2012.

6. Withdrawal of cautionary

Shareholders are advised that they are now no longer required to exercise caution in relation to the Sephaku Fluoride distribution when dealing in their Sephaku Holdings shares.

Pretoria
3 February 2012

Sponsor and transaction adviser
QuestCo (Pty) Limited

Reporting accountants
PKF (Jhb) Inc.