Annual Report 2009

Wits Gold Prospecting Rights in the Witwatersrand Basin, South Africa

Witwatersrand Basin

Johannesburg Carletonville Potchefstroom Goldfield Evander

Klerksdorp Klerksdorp Goldfield

Potchefstroom

N
0 100 Km

Welkom

Southern Free State Goldfield

Wits Gold Prospecting Rights Mining Leases Witwatersrand Basin Basement Rocks

Disclaimer
Certain statements in this directors’ report may constitute forward-looking information within the meaning of securities laws. In some cases, forward-looking information can be identified by use of terms such as “may”, “will”, “should”, “expect”, “believe”, “plan”, “scheduled”, “intend”, “estimate”, “forecast”, “predict”, “potential”, “continue”, “anticipate” or other similar expressions concerning matters that are not historical facts. Forward-looking information may relate to management’s future outlook and anticipated events or results, and may include statements or information regarding the future plans or prospects of the Company. Without limitation, statements about the timing of the pre-feasibility studies regarding the Company’s Bloemhoek project and De Bron project, the ability of the Company to manage its business risks, the sufficiency of capital to cover exploration and operating expenses, and other related statements are forwardlooking information. Forward-looking information involves known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking information. Such risks, uncertainties and other important factors include among others: economic, business and political conditions in South Africa; decreases in the market price of gold; hazards associated with underground and surface gold mining; the ability to attract and retain qualified personnel; labour disruptions; changes in laws and government regulations, particularly environmental regulations and Mineral Rights legislation including risks relating to the acquisition of the necessary licences and permits; changes in exchange rates; currency devaluations and inflation and other macro-economic factors; risk of changes in capital and operating costs, financing, capitalisation and liquidity risks, including the risk that the financing required to fund all currently planned exploration and related activities may not be available on satisfactory terms, or at all; the ability to maximise the value of any economic resources. These forward-looking statements speak only as of the date of this document. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. The Company undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events except where required by applicable laws.

Contents
1 2 4 5 12 15 17 18 21 22 23 Highlights Board of directors and management Company profile Chairman’s report Chief executive officer’s report Mineral resources Corporate social responsibility Corporate governance Directors’ approval and statement of responsibility Independent auditor’s report Report of the audit committee 24 28 29 30 31 32 56 56 57 Directors’ report Balance sheet Income statement Statement of changes in equity Cash flow statement Notes to the financial statements Shareholder information Shareholder diary Notice of annual general meeting

Attached Proxy form IBC Administration and contact details

Highlights
• • • • • • • Active drilling in three Witwatersrand goldfields with the completion of 14 755 metres of drilling in eleven boreholes containing 70 reef intersections. Annual expenditure of R55 million (US$5.4 million) of which R39 million (US$ 3.8 million) or 71% was devoted to exploration. Focus on technical programme at the Bloemhoek and De Bron projects which are progressing towards a mine development decision. Pre-feasibility study at Bloemhoek expanded to include the adjacent De Bron resources, where four reefs occur 500 – 1 200 metres below surface. Indicated Resources at De Bron 23.2Mt at 5.2 g/t Au (3.8 Moz) in addition to Inferred Resources of 9.4Mt at 5.2g/t (1.6Moz).* New order Prospecting Rights for uranium granted in the Potchefstroom and Klerksdorp goldfields. Resource estimation in progress. Acquisition of historic exploration data from AngloGold Ashanti in the Beisa North area. Uranium and gold resources are being independently estimated.

* Snowden Mining Industry Consultants (Qualified Persons: Shaun Hackett and George Gilchrist).

“With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people.”
Fredrich August von Hayek

www.witsgold.com
Wits Gold Annual Report 2009

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Board of directors
Non-executive directors

Mr Adam Fleming (61)* Chairman
Adam Fleming has a track record of creating shareholder value in the South African gold mining industry. He was appointed chairman of Harmony Gold in 1999 and remained in this position during the metamorphosis of Harmony Gold from a single mine operation into the fifth-largest gold mining company in the world. He resigned as chairman of Harmony Gold in 2003 and initiated the formation of Wits Gold.

Prof Taole Mokoena (56)*† Deputy chairman
Taole Mokeona is the head of department of surgery at Kalafong Hospital and the University of Pretoria. From 2002 to 2005, he acted as the chairman of Eyesizwe Coal (now part of Exxaro Resources Limited) and has also had considerable experience as a director of a number of public and unlisted companies at different times. He represents Continental Africa Gold Resources Consortium, a broadbased group of black shareholders, with just under 18% shareholding in Wits Gold. He is the chairperson of the Wits Gold remuneration and nomination committee and a member of the audit and risk management committee.

Dr Humphrey Mathe (58)*† Director
Humphrey Mathe has a PhD in geology from the University of Natal. He is the CEO of Scinta South Africa, a BEE company which focuses on coal and energy. He represents Tranter Kismet Investments, a group of South African black professionals that currently owns just under 10% shareholding in Wits Gold. He is a member of the Company’s audit and risk management committee as well as the remuneration and nomination committee.

Mrs Gayle Wilson (64)*† Director
Gayle Wilson is a chartered accountant (SA) and was a partner at Ernst & Young where she was intimately involved with the South African mining industry for 24 years. During this time she was responsible for the audits of many major mining companies such as Avmin (now African Rainbow Minerals), Northam Platinum, Aquarius Platinum and certain of the Anglo Platinum operations. She was also involved in AngloGold’s listing on the NYSE and in 2001 took over as the lead engagement partner of their global audit until her retirement in June 2005. Gayle Wilson joined the Wits Gold board in September 2006 and is chairman of the Company’s audit and risk management committee as well as a member of the remuneration and nomination committee. Gayle is also a non-executive director of Gold Fields Limited.

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Wits Gold Annual Report 2009

Executive directors

Dr Marc Watchorn (56)‡ Chief executive officer
Marc Watchorn completed five years of post-graduate research on the Witwatersrand Basin and has a PhD in geology from the University of the Witwatersrand. His independent review of the Witwatersrand Basin formed the basis for Wits Gold’s subsequent negotiations with the SA gold mining companies and resulted in the acquisition of the Company’s ‘old order’ Mineral Rights. Prior to co-founding Wits Gold, he worked for Anglo American between 1981 and 2002, both in South Africa and internationally, and has over 28 years’ experience in the international gold sector. He is chairman of the Wits Gold executive committee.

Mr Derek Urquhart (53)‡ Chief financial officer
Derek Urquhart qualified as a chartered accountant (SA) in 1980 after studying at the University of the Witwatersrand. After graduating, he established his own auditing practice. He was then instrumental in the formation and management of Tyco Truck Manufacturers, where he served as vice chairman of the board of directors until his resignation in 2001 to follow his private business interests. He joined Wits Gold in March 2005 as chief financial officer and is a member of the Company’s executive committee.

Executive management

Mr Hethen Hira (39) Investor relations manager
Hethen Hira obtained his MSc (Economic Geology) from Rhodes University in 1997 whilst employed at the Council for Geoscience. He then joined West Rand Consolidated Mines which subsequently merged with Harmony Gold in 1999. Here, he was involved with managing the Mineral Rights of the exploration division. This was followed by a secondment to the new business division, where he evaluated growth and acquisition opportunities. He joined Wits Gold in January 2005 and is a member of the Company’s executive committee.

Mr Dirk Muntingh (47) Exploration manager
Dirk Muntingh has an MSc in geology from the University of Johannesburg. He previously worked at the Council for Geoscience before joining the gold division of Anglo American Corporation in 1987. At Anglo American he worked at Elandsrand Gold Mine and two years later transferred to the new projects development unit, providing specialist input to both gold mining and exploration ventures. In 1997 he was transferred to the new mining business division, where he was appointed exploration manager for Ghana before joining AngloGold Ashanti in Australia. He joined Wits Gold in March 2006 and is a member of the Company’s executive committee.

* Non-executive ‡ Executive

† Independent

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Company profile
Wits Gold is an active gold and uranium exploration company registered in the Republic of South Africa. The Company has a primary listing in Johannesburg on the JSE Limited and a secondary listing on the Toronto Stock Exchange. It is a designated foreign issuer under Canadian legislation as defined in National Instrument 71-102 (Continuous Disclosure and Other Exemptions Relating to Foreign Issuers). The Company is subject to the foreign regulatory requirements of the JSE Limited and is governed by the regulations of the JSE Limited. Wits Gold also has a Level 1 American Depository Receipt programme backed by the Bank of New York Mellon. In accordance with the Minerals and Petroleum Resources Development Act (2002), Wits Gold has a 31% broad based black economic empowerment shareholding, in excess of the 26% required by the legislation. Subsequent to this compliance, the Company has been granted thirteen new order Prospecting Rights covering 1,025 km2 adjacent to existing mining operations in the Witwatersrand Basin. The total Mineral Resources in these Prospecting Rights in the Potchefstoom, Klerksdorp and southern Free State goldfields have been independently estimated by Snowden Mining Industry Consultants. These include an Indicated Resource of 100.7Mt at 6.0g/t Au with 19.4Moz of gold in addition to an Inferred Resource of 504.5Mt at 8.3g/t Au with 130.4Moz of gold. In the southern Free State goldfield this gold mineralisation is accompanied by an Inferred Resource of 85.8Mt at 0.13kg/t U3O8 containing 54.3Mlbs of uranium. The geological diversity of this substantial Mineral Resource provides Wits Gold with significant leverage to future changes in the gold price. The Company has contractual agreements with AngloGold Ashanti, Gold Fields and Harmony whereby these gold mining companies have an option to acquire an interest of up to 40% in any future mining operation on ground originally acquired from them. Although active exploration is undertaken in all three goldfields, current attention is focused on progressing towards a development decision at the advanced Bloemhoek and De Bron projects in the southern Free State goldfield. Wits Gold currently has cash resources of R106 million (US$13 million), sufficient to finance its present exploration programme until early 2012.

Share performance since Wits Gold listing relative to JSE Gold Index (24 Apr 2006 to 31 May 2009) (24 April 2006 = 100)
350 300 250 200 150 100 50 0
Apr 06 Jun 06 Aug 06 Oct 06 Dec 06 Feb 07 Apr 07 Jun 07 Aug 07 Oct 07 Dec 07 Feb 08 Apr 08 Jun 08 Aug 08 Oct 08 Dec 08 Feb 09 Apr 09 May 09

Gold price performance in $/oz and R/kg since Wits Gold inception (Jan 2003 to May 2009)
1100 900 700
US$/oz

350 000 300 000 250 000 200 000
R/Kg

500 150 000 300 100 100 000 50 000

Jan Mar Jun Sep Dec Mar Jun Sep Nov Feb May Aug Nov Feb May Aug Nov Jan Apr Jun Sep Jan Apr Jun Sep Dec Jan Apr May 03 03 03 03 03 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 08 09 09 09

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Wits Gold Annual Report 2009

Chairman’s report
Dear Shareholder,
Some sage once commented ‘brevity is the soul of wit’. On that basis, this short letter may prove a side splitter for, as each year goes by, trying to conjure up new reasons for buying gold, gold shares and, of course, your Company, Wits Gold, gets harder and harder. The fact is that the avoidance of repetition depletes the arsenal of fresh, cute and plausible pointers. Charts and pictures that take up lots of room help of course… but there is a limit. Never mind, the original case for this sector remains as bright and strong as ever and so, if we have to go back over familiar ground, please avert your eyes. Herewith then, our original bill of charter; the corporate aims and targets that we set ourselves upon embarking on this journey into the unknown. We leave it to you to decide whether or not so far we have been successful. We set up our stall, it seems decades ago, in 2003. Marc Watchorn had retired as a geologist of note from Anglo American, a lifer of 25 years with a doctorate to boot in the arcane world of geology and the Witwatersrand in particular. Your chairman, with no particular intellectual achievements to hand, stood, and still stands, guilty of being a gold ‘bug’, a nutter with the unshakeable belief that the precious metals, gold and silver, currencies with a 5000 year lineage, once again will have their day in the sun and play a central role in the world’s economic system. Our joint aim was ambitious but simple. To assemble a world class holding of gold rights in the incredible Witwatersrand gold system; these to act as an option on the gold price; and, with exploration, development and rising gold prices over time, to dividend down to our shareholders one or more mining projects – either as quoted companies run by independent operators, or the sale proceeds in the form of cash or shares in the operating company. We were in luck. Big changes in the politics of the ownership of minerals in South Africa led to new minerals legislation and the birth of the black empowerment system. Controversial maybe, but this development allowed a midget, Wits Gold, to become a giant. Majority owned by our empowerment friends at Continental, Tranter and the Wits Gold Women’s Trust, we were able to unlock the non-core brown fields development assets of the world’s three major deep level gold miners, Anglogold Ashanti, Gold Fields and Harmony. Coupled with a 40% claw back for the majors, this deal, in the new world of ‘use it or lose it’, was irresistible both to them and to us. An added bonus, we acquired 500kms of drill core and all associated exploration data – an estimated US$100 million value in today’s money.

“Gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium.”
Hans F Sennholz
Drilling at the Kromdraai project

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Chairman’s report continued
With the backing of some intrepid risk finance from South African and international investors, we completed the independent audit of our resource – 150Moz of gold and 50Mlbs of uranium. With new order Mineral Rights granted courtesy of the South African Department of Minerals and Energy, we were able to complete a successful listing on the Johannesburg Stock Exchange in April 2006 and, later, a secondary equivalent in Toronto. Fast forward to today. Here are the boxes we have ticked since that listing: • Growth in exploration acreage. We have added approximately 117 square kilometres to our exploration holdings, including the north and south extensions to the Gold Fields Beisa uranium mine. These were granted to us by the Government at no additional cost. We have received also from the Government our outstanding uranium rights in the Potchefstroom goldfield. These are being audited by Snowden Mining Consultants prior to release. • Upgrading our gold resource. In the past year we have spent approximately US$4 million on our drilling programme and since 2006 have grown the higher confidence level ‘indicated’ proportion of our resource by 80% from 4Moz Au to +20Moz Au. The cost of progressing these upgraded resources works out at less than $1 per ounce. This compares favourably with the industry standard of US$30 to find 1 new ounce of gold. The momentum here will continue. • Project development. Completion of the pre-feasibility studies on both Bloemhoek and De Bron is imminent. Combined, these projects rank in size within the top ten new gold mining prospects world wide. • Financial parsimony. With a total head count of 17 souls, our costs are as low as is feasible, consistent with professional excellence. Exploration drilling counts for over 70% of total costs. Our finance director always would prefer our exchequer to be more healthy but, with US$13 million in the bank, we have enough resources to keep us going for at least three years. In extremis, that could be stretched out at least two years more. In conclusion, your Company is in rude, good health, operating in a country that has 150 years of mining history, where mining legislation has the approval of the electorate and in a gold system that contains 50% of the world’s known remaining resources. We are blessed with loyal and hard working employees. They are the backbone of Wits Gold. And, finally, we own the rights to the world’s fifth largest resource of a precious metal that has produced the financial return appended below. What other business would you rather be in?

Adam Fleming Chairman
Footnote: For those wishing to read about the case for gold in greater depth, please turn to page 7. Here you can enjoy a double whammy; both the beautiful prose and also the irresistible logic of John Hathaway of Tocqueville Asset Management L.P., a senior player in the gold investment game and also shareholder in your Company.

2001 2002 2003 2004 2005 2006 2007 2008 Average Prepared by GoldMoney.com January 2009

USD 2.5% 24.7% 19.6% 5.2% 18.2% 22.8% 31.4% 5.8% 16.3%

AUD 11.3% 13.5% (10.5)% 1.4% 25.6% 14.4% 18.6% 32.5% 13.3%

CAD 8.8% 23.7% (2.2)% (2.0)% 14.5% 22.8% 10.4% 32.4% 13.6%

Gold % Annual Change CNY EUR INR 2.5% 8.1% 5.8% 24.8% 5.9% 24.0% 19.5% -0.5% 13.5% 5.2% -2.1% 0.0% 15.2% 35.1% 22.8% 18.8% 10.2% 20.5% 23.0% 17.9% 17.5% (1.1)% 11.9% 30.4% 13.5% 10.8% 16.8%

JPY 17.4% 13.0% 7.9% 0.9% 35.7% 24.0% 24.7% (14.9)% 13.6%

CHF 5.0% 3.9% 7.0% -3.0% 36.2% 13.9% 21.5% 0.2% 10.6%

GBP 5.4% 12.7% 7.9% (2.0)% 31.8% 7.8% 29.2% 44.3% 17.1%

“Stronger than thunder’s winged force; all-powerful gold can speed its course; through watchful guards its passage make, and loves through solid walls to break.”
Horace (65 BC to 8 BC)

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Wits Gold Annual Report 2009

A surplus of gullibility by John Hathaway Portfolio Manager and Senior Managing Director © Tocqueville Asset Management L.P. Since the implosion of credit, gold has become a much more respected topic. This is a significant change in the character of the market. When we first launched our gold fund in 1998, it was the Rodney Dangerfield of investment ideas, a laughable outcast on the utmost fringe of investment strategies. However, times have changed and now it is okay to mention gold in polite company. The dollar price of gold has advanced nearly 4 fold since its 20 year low in 1999. In nominal terms, it stands at an

all time high. More important than the price advance, however, is the progression of investment thinking. Gold as armor against potential monetary debasement or continued deflation is an idea that won’t go away. A review of the most recent Form 13F filings for GLD, the NYSE listed ETF which is essentially securitized physical gold, shows a significant number of elite investment thinkers among the top 20 holders (see below). In many instances, the holdings are sufficiently large to suggest that gold is a core component of their investment thinking. The top twenty holders represent 24% of shares outstanding. The high concentration among a relatively small number of holders also suggests that exposure to gold in the investment world, and especially the public remains quite low.

Holder name
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Paulson & Co., Inc. BlackRock Advisors, Inc. CI Investments, Inc. Bank of America Merrill Lynch Greenlight Capital, Inc. Eton Park Capital Management LP Citigroup Global Markets (United States) Morgan Stanley & Co., Inc. Highfields Capital Management LP Wellington Management Co. LLP Goldman Sachs & Co. BlackRock Investment Management (UK) Limited. Windward Investment Management Aletheia Research & Management, Inc. Mason Street Advisors LLC Tiger Global Management LLC Northern Trust Investments Pequot Capital Management, Inc. UBS Global Asset Management Lazard Asset Management LLC Top 20 Holders of GLD Note: Positions and respective percent of shares outstanding as of March 31, 2009. Source: FactSet Research As we have often noted, the capacity of gold bullion to absorb capital market flows is tiny. The chart below shows that a 1.2% increase into physical gold by global pension funds would require

Position
31,500,000 6,264,842 4,747,842 4,233,321 4,209,090 3,657,337 3,311,751 3,227,414 2,894,720 2,834,780 2,788,539 2,571,800 2,274,936 2,029,101 1,999,300 1,944,000 1,821,561 1,697,500 1,562,936 1,518,973 87,089,743

% O/S
8.7 1.7 1.3 1.2 1.2 1.0 0.9 0.9 0.8 0.8 0.8 0.7 0.6 0.6 0.6 0.5 0.5 0.5 0.4 0.4 24.1

more than 44,000 metric tonnes, or roughly 27% of all the gold that has ever been mined.

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Chairman’s report continued

Once the broader investment community begins to follow the leaders in earnest, the price reaction of the metal will be far more dynamic than the consensus view, which we judge to be essentially agnostic. The steady influx of capital into the various gold ETFs is encouraging. New GLD shares are created only if an authorized dealer purchases bullion and delivers it to the custodian, HSBC. This simple act of arbitrage is how GLD shares are created and the process has in recent years become the most important reason for the steady rise in the gold price. The current market cap of all gold ETFs is $49 billion (as of May 19, 2009), a considerable rise since the inception in November, 2004. Still, this is a moderate sum by capital market standards, and further growth seems both possible and likely. Bullion held by the GLD trust is in allocated form, which means that the custodian (HSBC) may not lease the gold back into the market. More importantly, allocated bullion is not commingled with the general accounts of the bank. In a hypothetical bankruptcy of the institution, creditors would have no claim on the bullion. The past and prospective growth of GLD has the effect of tightening the noose for the considerable superstructure of paper short positions that are marked to gold but are in large part naked. We believe the macro economic conditions for gold will remain favorable as long as the U.S. government displays a current willingness to intervene at any cost to right the economic ship. The dynamic is simple. Bad news on the economic front empowers politicians to pump up the dose of monetary and fiscal medicine. This spectacle is bound to worry all who hold dollar denominated assets, especially low yielding U.S. Treasuries, both here and abroad. What about the ever present debate over inflation vs. deflation? There are good arguments on both sides, and it may take

years to find out which view turns out to be right. Despite the intellectual intrigue, this debate is irrelevant for gold. Either outcome would be positive, as both the 1930’s and the 1970’s illustrate. In each of these decades, those who had a significant exposure to gold and gold shares came out ahead of those who didn’t. In the meantime, a prolonged standoff in which either outcome seems plausible will only generate more worry and suspense for investors. It is hard to see how this could be bad for gold. It seems intuitive that huge deficits and unprecedented monetary creation would result in inflation. On the other hand, repairing credit might take decades. Without credit growth, government responses that seem extreme might only offset the void left by the slump in the private sector, and inflation would remain latent. In either instance, Western democracies appear to be on course for a fiscal disaster of epic proportions, because the essence of their policies is to inflate collateral values in nominal terms by debasing their currencies. Of course, the notion of currency debasement is not explicit. The most ardent advocates of inflationary policy responses to deflationary market forces most likely believe in their hearts that there is no risk of damage to the currency because monetary velocity is low. Their conviction is clothed in the myth that central bankers and politicians have the expertise to navigate economic and financial crises, which of course has little basis in reality. Faith in government’s ability to correctly judge the precise moment to withdraw liquidity and stimulus is the only basis I can think of for rejecting gold as an investment option. Alan Meltzer, in a May 4, 2009 Op-Ed piece in The New York Times, “Inflation Nation”, argues that the Fed has ceded its independence to the U.S. Treasury for political expediency. How will it regain that

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Wits Gold Annual Report 2009

independence? “Surely not right away. But sooner or later, we will see the Fed, under pressure from Congress, the administration and business, try to prevent interest rates from increasing.” As President Reagan once remarked, “the nearest thing to eternal life we will ever see on this earth is a government program.” As the three charts below show, the issuance of government debt to finance the various stimulus programs has already risen

sharply to multiyear highs. This issuance will rise still further as fiscal stimulus ramps up and tax receipts fall away. At the same time, foreign buyers have cut back sharply on their purchases of U.S. Treasuries. This leaves only the American consumer or the Federal Reserve to make up the difference:

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Chairman’s report continued

Foreign buying of U.S. paper appears to be on the wane, notwithstanding the spike in March, which Bianco Research has suggested might have been front running a strong Fed bid based on its quantitative easing statement. Dollar weakness has already erased the meager gains from this strategy. The risk of further dollar weakness is posed by the simple question of who will absorb the increase in supply of treasury issuance? Traditional foreign purchasers have fewer dollars to invest because of declining trade flows. While U.S. households will take up some of the slack, the Fed will have to shoulder much of the burden, as it has already stated it will do. While all paper currencies seem in danger of losing value, the dollar seems particularly vulnerable because its existing and prospective supply is high in comparison to the others. As the cornerstone reserve asset of foreign central banks, it is the most vulnerable to a progressive downgrading of opinion as to its utility. Muttering about the dollar’s reserve status has been led by China and Russia but it is shared by others who remain silent on the matter. China, in its critique of the dollar’s reserve status, reveals its own ambition to benefit from privileges of seigniorage. However, it still pegs its currency and must accumulate dollar reserves to do so. As for gold backing in order to look more like a reserve currency, they remain far short of the 23% backing for the euro at only 1.7%. The recent increase in their gold position was most likely disclosure of gold held by the finance ministry that was previously unreported. The disclosure may have been a response to internal criticism as to vulnerability to dollar weakness and their underweighting in gold. While this may not

qualify as a watershed in behavior, there is clearly pressure for China to diversify away from the dollar. We understand that other central banks, having spent more than a decade divesting their gold holdings in favor of “higher yielding assets, such as U.S. Treasuries”, are beginning to show renewed interest in the metal. While such changes in thinking and behavior can seem glacial, there is no doubt they are potentially game changing for the gold market. The shift in central bank thinking is incipient and barely detectable at present, but the change is real. It is based on doubts about their key reserve asset (63% U.S. dollars) and the price behavior of gold. With central banks potentially shifting from net sellers to net buyers, it will take much more courage and/or stupidity to attempt a bear raid led by naked short selling similar to the 2008 event which saw gold decline nearly $300 in the wake of the Bear Stearns demise. The major difference between the 1930’s and the 1970’s and the first two decades of the current century is not whether inflation or deflation will rule the day, but the precarious position of the dollar as a reserve currency. Fiscal and monetary actions that seem expedient for domestic purposes also stand to fuel wariness and weariness of the dollar’s unique position. The dollar must be replaced as the anchor of the international monetary system. While everyone seems to know this, there are no obvious answers. In time, the solutions will be driven by the markets, following historical precedent. We would be surprised if world governments, especially Asia, would sponsor gold as the new anchor as they are underweight the metal. In the meantime, gold ETFs will avail private citizens of an

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Wits Gold Annual Report 2009

alternative to government scrip and on that basis, we anticipate robust and steady growth. The fact that gold and gold shares have outperformed most other investment strategies over the past ten years is still a well kept secret. However, one cannot fail to note that gold has more recently attracted the interest of highly regarded investment professionals, who we would classify as early adopters. While gold’s plausibility and respect has improved over the past year, we reckon that most investors are still on the sidelines. The high abstention rate seems to us to be based on concern that gold’s ten year run is over (see our website article: “Is Gold Still In a Bull Market?”) or belief that government policies will work the miracles their proponents claim. We feel that the bull market in gold is still young, but that it has crossed an important threshold. No longer obscure and laughable, broader awareness and

interest among a wider circle paves the way for capital inflows still to come. Unless the macro economic outlook undergoes a miraculous change for the better, it would seem that the prospects for gold and gold mining shares remain excellent. May 22, 2009 by John Hathaway Portfolio Manager and Senior Managing Director © Tocqueville Asset Management L.P. This article reflects the views of the author as of the date or dates cited and may change at any time. The information should not be construed as investment advice. No representation is made concerning the accuracy of cited data, nor is there any guarantee that any projection, forecast or opinion will be realized.

Leader Reef borehole core from the De Bron project

View from the top: The Kromdraai exploration drill site

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Chief executive officer’s report
The gold price, however, has been one of the few shining lights, particularly due to its safe haven status and the metal’s positive response to a weakening US dollar. Gold companies initially suffered from the common pessimistic sentiment, but in the first and second quarters of 2009, the resilience of the gold price has in many cases translated to enhanced share prices. This market improvement has been most notable in companies that have cash flow, as well as those that are moving towards mine development and metal production. Generally, pure exploration companies have been the laggards in this sector whilst they have simultaneously been adversely affected by their limited ability to raise capital. Consequently, many of the recent share placements by explorers have been achieved only at significant discounts.

Market conditions
During the year under review, the mineral resources industry, like many others, has been severely affected by the failure of the world’s financial markets. The resulting slow down in the global economy has had a sharply negative impact on most commodity prices as well as the organisations involved in the search for, and exploitation of minerals. Accordingly, during the second half of 2008, the share prices of most companies involved in the minerals industry tended to be sharply lower due to a combination of market pessimism and the continual threat of redemptions affecting institutional shareholders.

Corporate strategy
Wits Gold was originally established in 2003 as a long dated option on gold. At that stage, when gold was trading around US$350/oz, the focus was to obtain a significant Mineral Resource in the Witwatersrand Basin, easily the world’s most prolific area of historic gold production. With the cooperation of South Africa’s major gold producers and the Company’s black economic empowerment status, Wits Gold has successfully acquired thirteen new order Prospecting Rights covering 1 025km2 in areas adjacent to operating mines. An independent

Wits Gold’s Prospecting Rights in the southern Free State goldfield
Welkom
N

Virginia Vi gi i
Beisa North eis

Bloemhoek Bl h k

De B D Bron

Wits Gold Rights Other Mining Companies Mined Out Areas
10 Km

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Wits Gold Annual Report 2009

assessment has estimated that when combined, these areas contain the world’s fifth largest gold resource. We believe that this resource is strategically important in a world where the discovery of new multi-million ounce gold deposits has become increasingly rare. This large Mineral Resource represents the quantitative exploration environment within which Wits Gold operates. Whilst continuing to retain its optionality, the dramatically improved gold price has presented the Company with a number of geological opportunities to advance selected mineral properties towards a development decision. The key assets at Bloemhoek and De Bron occur in the southern Free State where the Company is currently involved in a pre-feasibility study (PFS) to evaluate the economics of mining these deposits either separately or as a large combined operation. It is anticipated that the results from this study will be available during the third quarter of 2009. The pursuit of the Company’s exploration opportunities has been accomplished through a dual listing on the JSE and TSX that has provided a suitable platform to raise capital by means of private placements of shares over the period 2006-2008. Consequently, in the present environment, the Company is in the fortunate position to have cash resources of some

R106 million (Approximately US$13 million). According to the present work programme and related budgetary forecast, it is anticipated that Wits Gold will not require additional funds for the next three years.

Exploration activities
The Company’s drilling has concentrated mainly on evaluating mining opportunities in the southern Free State, although similar exploration has also been undertaken in Potchefstroom and Klerksdorp goldfields. Five key projects have been selected on the basis of a combination of factors, including the presence of regionally continuous reefs, the depth of those reefs below surface as well as their tonnage and grade potential. Gold remains the principal focus of the exploration, although uraniumgold mineralisation in the Beisa region of the southern Free State has also received attention.

Southern Free State goldfield
Following a positive result from the preliminary economic assessment or scoping study on the Bloemhoek project, a more detailed PFS has been commissioned. This is being undertaken independently on behalf of Wits Gold by Turnberry Projects together with consulting mining engineers, Ukwazi Mining

Wits Gold’s Prospecting Rights in the Potchefstroom and Klerksdorp goldfields
Johannesburg J h b g
N

Carletonville C l t ill
Kleinfontein

Wits Gold Rights Other Mining Companies Mined Out Areas

Potchefstroom P t h f t Klerksdorp Kl k d p

Kr Kromdraai romdraa romdra raai

20 Km

Wits Gold Annual Report 2009 Wits Gold Annual Report 2009

13

Chief Executive officer’s report continued
Solutions. The estimated Indicated Resource at Bloemhoek of 52.3Mt at an average grade of 6.7g/t Au occurs at 1,300 – 2,400 metres below surface and represents one of the ten largest undeveloped Mineral Resources in the world. A number of alternative shaft positions and mine designs are currently being evaluated in order to maximise the potential financial return from the establishment of a new medium depth mine. It was originally planned to complete this PFS earlier during 2009, but the final report has been delayed to consider the possibility of combining the Bloemhoek orebody with additional shallow resources from the adjacent De Bron area. The Bloemhoek and De Bron projects are separated by a substantial fault that places the De Bron mineralisation at depths of only 500-1200 metres below surface. Following the completion of a recent drilling programme, the estimated Indicated Resource at De Bron has increased to 23.2Mt at an average grade of 5.2g/t Au, containing 119.7 tonnes of gold (3.85Moz). This compares with the previous Indicated Resource of 16.1Mt at an average grade of 5.3g/t for 85.3 tonnes of gold (2.73Moz). It is anticipated that the integrated PFS will be available as an NI43 – 101 technical report during the third quarter of 2009. In the Beisa region, Wits Gold has acquired extensions to the uranium-gold mine that operated from the now re-named Beatrix No 4 Shaft. Over the period 1982-1984, the Beisa Mine exploited 2.4Mt of Ada May (Beisa) Reef at a recovered grade of 0.47kg/t U3O8 (2.49 Mlbs) and 1.5g/t Au (0.11 Moz). During the past year, Wits Gold has purchased historical borehole data from AngloGold Ashanti for the immediately adjoining Beisa North area. These include borehole core, assay results and reports for which the Company paid an amount of R680 640. Included in the package was a non-compliant resource assessment for the southern portion of the Beisa North area which estimated an in situ 14.2Mt at 1.01kg/t U3O8 (31.6 Mlbs) and 2.3g/t Au (1.05 Moz). This estimate is presently being revised by AMD Consulting in the form of an NI43-101 technical report that is due to be completed during June 2009. will be estimated by Snowden Mining Industry Consultants. This NI43-101 technical report is due for completion during the third quarter of 2009.

Klerksdorp goldfield
The future of high grade gold mining in this region is dependent mainly on the identification of deep Vaal Reef resources similar to those being mined by AngloGold Ashanti at their Moab Khotsong Mine. Accordingly, Wits Gold has prioritised the Kromdraai block, situated immediately east of Buffelsfontein Mine, where previously borehole UC1962 intersected the Vaal Reef containing 36.2g/t Au over a width of 19.4cm (703cm.g/t). Drilling of borehole WDS 1 commenced in October 2008 and is currently at a depth of 3,700 metres, approximately 100 metres short of the anticipated reef position.

Outlook
During the forthcoming financial year, the Company’s main emphasis will centre on progressing the Bloemhoek and De Bron projects towards a development decision. The alternative mine designs and their financial implications will become apparent on completion of the pre-feasibility study for this area during the third quarter of 2009. In the present context, these assets represent the jewel behind Wits Gold that could ultimately result in one if not two new Witwatersrand mines. For those investors with an appetite and vision for gold, there can be few, if any, comparable multi-million ounce opportunities in other established gold provinces elsewhere in the world. A review of the geology of the Potchefstroom goldfield is currently in progress, with most attention being devoted to those areas that could host substantial resources accessible from a single drop shaft. These conditions apply mainly to the northern periphery of the goldfield as well as the western margin where high grade Carbon Leader and Vaal Reef are known to exist at depths in excess of 3,000 metres below surface. In the Klerksdorp region, the results from the deep borehole, WDS1 in the Kromdraai block are eagerly awaited. These resources represent some of the long-term optionality of Wits Gold. The Company will continue to concentrate on extracting maximum value from its gold properties, although the potential to produce by product uranium will remain a consideration. In this light, the uranium resources in the Potchefstroom area are currently being estimated to complement those in the southern Free State. The latter include the Beisa area, where higher uranium grades have been encountered in the Ada May Reef with a lower, but still significant, gold content.

Potchefstroom goldfield
Two boreholes have been completed in the northern sector of the Kleinfontein area with mixed success. The previous operator in the region was of the opinion that the Carbon Leader, the mainstay of the adjacent Carletonville goldfield, was largely absent due to the presence of the low angled Master Bedding Plane Fault. However, the recent drilling has refuted this geological model but intersected only poorly developed Carbon Leader. Of a more positive nature has been the development of thick Middelvlei Reef at depths of 1,500 – 2,000 metres below surface, similar to that present on the adjacent Blyvooruitzicht Mine. Consistent with the old order mineral title, Wits Gold was originally granted new order Rights for precious metals in this area. During the past year an application to include uranium was approved from the Department of Minerals and Energy. In accordance, a revised Mineral Resource to include uranium

M B Watchorn 1 June 2009

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Wits Gold Annual Report 2009

Mineral resources
During the past year, Wits Gold has focused specifically on improving the definition of its Mineral Resources in the southern Free State by means of diamond drilling programmes in the Bloemhoek and De Bron projects. The corresponding assay results which will allow Snowden Mining Industry Consultants (Snowden) to produce an updated estimate of the contained Mineral Resources have now been received. This exercise is currently in progress and a revised estimate for these areas is expected during the third quarter of 2009. In the Beisa North area, also in the southern Free State, the Company acquired the drill core and assay data from AngloGold Ashanti relating to thirteen boreholes that had been drilled during the period 1982 – 1991. This information was purchased for a sum of R680 640, together with a number of geological reports. Included was a non-compliant resource estimate for the sector situated immediately south of the Sand River. This estimate suggested an unqualified resource of 14.2Mt at 1.01kg/t U3O8 containing 31.6 Mlbs of uranium and 2.3 g/t Au equivalent to 32.7 tonnes (1.05 Moz) of gold. A geological review of this historic exploration is currently being undertaken by AMD Consulting with a view to producing technical reports that are compliant with both the NI43-101 and SAMREC reporting codes. These documents will include a revised resource estimate and are expected to be completed during the third quarter of 2009. In the Potchefstroom goldfield, the Company was originally awarded new order Mineral Rights to precious metals only. However, an application for Variation Rights to include uranium was made to the Department of Minerals and Energy on the basis that precious metals and uranium occur within the same reefs. These Variation Rights have been granted over 44 658ha of the area that will enable Snowden to estimate the contained Mineral Resource. This report will be available during the third quarter of 2009. In view of the recent focus on drilling, there are currently no material changes to the Company’s Mineral Resources since those quoted in the 2008 Annual Report. These Mineral Resources are currently reflected as being fully attributable to Wits Gold. However over certain properties in the southern Free State, Harmony has an option to acquire a 40% interest in any future mine following the completion of a bankable feasibility study (BFS). Similar 40% claw back options apply to some of the Prospecting Rights in the Potchefstroom region where Gold Fields and AngloGold Ashanti are the interested parties. In the Klerksdorp area, Gold Fields holds an option to purchase a 40% stake on completion of a BFS.

Wits Gold total resources (NI 43-101 and SAMREC Code Compliant)
Classification Indicated Goldfield SOFS Potchefstroom Klerksdorp Total Tonnes (millions) 100.7 Grade (Au g/t) 6.0 Gold (Moz) 19.4 Tonnes (millions) 85.8 333.6 85.1 504.5 Inferred Grade Grade (U3O8 (Au g/t) Kg/t) 5.5 0.132 7.1 – 14.5 – 8.3

100.7

6.0

19.4

Gold (Moz) 15.1 75.8 39.5 130.4

U3O8 (Mlb) 54.3 – – 54.3

These resource estimates were presented by Snowden in a report entitled Witwatersrand Consolidated Gold Resources Limited: Mineral Properties in the SOFS Goldfield, South Africa dated November 2007, with Shaun Hackett BAppSc (Geology), MAusIMM, 18 years’ experience and George Gilchrist BScHons (Geology), PR.SciNat (4002/2/05), 8 years’ experience being the Qualified Persons. This report is available on the Company’s website and on Sedar. These resources have been estimated using a cutoff gold value of 300 cm.g/t for narrow reefs and 600 cm.g/t for the wider Cobble Reef of the Bird Formation, to a maximum depth of 5 000 metres below surface. The gold estimates have been based on either global simple kriging (Potchefstroom and Klerksdorp) or ordinary kriging (southern Free State). U3O8 estimates are classified as inferred only due to the estimation method applied. As uranium is considered a secondary product, uranium was only reported from blocks where the gold accumulation exceeded the reporting cutoff of 300 cm g/t. The contained uranium resources were calculated using the linear regression between gold and uranium.

“Gold is forever. It is beautiful, useful, and never wears out. Small wonder that gold has been prized over all else, in all ages, as a store of value that will survive the travails of life and the ravages of time.”
James Blakely

Wits Gold Annual Report 2009

15

Mineral resources continued “I see a great future for gold and silver coins as the currency people may increasingly turn to when paper currencies begin to disintegrate.”
Murray M. Rothbard

Exploration drilling results
During the past year, Wits Gold has completed a further seven boreholes in the southern Free State and two boreholes in the Potchefstroom goldfield. The available sampling data from the relevant reef intersections are tabulated below:
Depth below surface Borehole Project DBH20 Bloemhoek Reef Beatrix Kalkoenkrans Leader Bloemhoek Beatrix De Bron Beyond sub-crop Beatrix B Reef Leader De Bron Beatrix Kalkoenkrans B Reef Leader De Bron Beyond sub-crop De Bron Beatrix B Reef Leader De Bron Beatrix B Reef Leader Kleinfontein Middelvlei Black Reef Carbon Leader Kleinfontein Black Reef
(m)

Corrected width
(cm)

Gold grade
(g/t)

Gold value
(cm.g/t)

U3O8 grade
(kg/t)

U3O8 value
(cm.kg/t)

DR14 DWN24 DWN25

1 819.3 1 823.3 1 830.0 1 712.9 497.2 508.0 532.3 1 139.0 1 141.7 1 144.0 1 158.8 607.6 625.7 651.2 462.6 472.1 506.0 1 556.6 1 050.9 1 637.0 1 107.4

32.3 138.8 64.8 135.1 117.0 210.9 124.4 100.1 126.9 111.2 107.6 90.2 261.6 94.0 115.5 244.9 126.6 136.1 16.8 30.3 28.0

2.97 2.06 12.57 3.92 9.19 3.75 18.15 3.14 1.15 1.36 3.92 4.46 1.28 18.85 4.86 2.22 4.04 3.57 0.66 0.05 0.97

96 286 815 530 1 075 792 2 259 314 145 152 422 402 334 1 772 561 545 511 486 11 2 27

0.109 0.062 0.308 0.035 0.020 0.102 0.562 0.170 0.023 0.032 0.202 0.152 0.021 0.731 0.105 0.061 0.418 0.112 0.191 0.000 0.418

3.53 8.58 19.95 4.67 2.37 21.57 69.95 16.94 2.94 3.56 21.71 13.68 5.41 68.75 12.15 14.97 52.95 15.21 3.20 0.00 11.71

DWN26

DWN27 WF1

WF2

WBB1

WVL1

The standard drilling practice at Wits Gold has been to recover at least three acceptable intersections of each reef in each borehole. Split diamond drill core samples were submitted for gold and uranium determination to Anglo Research Laboratories, an ISO/IEC 17025 accredited laboratory. As part of the environmental management plan (EMP), the Company has lodged bank guarantees totalling R215 000 with the Department of Minerals and Energy (DME). This amount has been accepted for the work programmes proposed over the 13 Prospecting Rights granted to Wits Gold. The DME may request annual reviews of the amounts based on work undertaken and reported in annual progress reports. EMP compliance will be monitored on an ongoing basis for the duration of the Prospecting Rights. The directors are not aware of any legal proceedings or any other material conditions that may impact on the Company’s ability to continue with its exploration activities.

Exploration at Kromdraai

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Wits Gold Annual Report 2009

Corporate social responsibility further R1 000 000 each year for 2010 and 2011. The number of bursaries awarded and details of the institutions are as follows:
Name of Institution University of Limpopo Walter Sisulu University University of the Witwatersrand University of the Free State North West University Central University of Technology Nelson Mandela Metropolitan University Vaal University of Technology University of Western Cape Boston City Campus Number of bursaries 1 6 1 3 1 3 1 2 1 1

Dr Brigalia Bam

The Wits Gold Women’s Trust
The Wits Gold Women’s Trust was established by the founder shareholders of the Company to assist in encouraging the participation of women in the mining industry. The Trust targets students with severe financial difficulties and concentrates its efforts not only in major cities but also at educational institutions in lesser populated areas. Bursaries have been awarded to 20 students for 2009. The value of these bursaries amounts to R955 000 with a commitment of a

Courses covered for bursaries awarded include, inter alia, geology, civil engineering, nursing and analytical chemistry. In addition to bursaries, the Trust is investigating other social projects for the upliftment of women in the industry. During the past year representatives of, the Trust visited various educational institutions with a view to introducing themselves to senior staff and identifying suitable students in need of financial assistance. The Trust is operated independently from Wits Gold under the chairmanship of Dr Brigalia Bam, the chairperson of the Independent Electoral Commission.

“Gold is still the only currency that is not the debt of someone else. It has intrinsic value, unlike currencies that are only as credible as the state who issues them.”
Pierre Lassonde, 2005

Maggie Mphuthi, Wits Gold’s assistant to the financial controller, is a bursary recipient and is studying part-time through Boston City Campus. Maggie commenced work at Wits Gold in 2005 when she was originally employed as the tea lady/cleaner.

Wits Gold Annual Report 2009

17

Corporate governance Corporate governance
Overview
The Company is committed to applying and upholding best practice in terms of corporate governance. The board operates in accordance with the board charter and ensures that the Company complies with all relevant laws, regulations and codes of business practice. In addition, it is also responsible for identifying risk areas and performance indicators in respect of the Company. The board retains full and effective control over the Company and is responsible for monitoring management in respect of the implementation of the board’s plans and strategies. The board is committed to the principles of diligence, honesty, integrity, transparency, responsibility and fairness, in accordance with good corporate governance, as outlined in the second King Report on Corporate Governance for South Africa, 2002 (King II). The board has endorsed and continues to enhance compliance with the principles and recommendations of the second King II Report. The board’s approach to implementing King II is based on the broad spirit of the code, increased shareholder awareness and prompt and open communication. Although the directors are committed to and support King II, they have not yet fully applied the code. The directors are of the opinion that due to the current size of the Company, the composition and structure of the board, is appropriate and the establishment of an internal audit department is not feasible. At present, the remuneration of the non-executive directors is approved retrospectively at each annual general meeting. With effect from the annual general meeting held in 2010, such remuneration will be pre-approved by the shareholders. Over time, the directors will endeavour to become fully compliant with King II. of the JSE Limited Listings Requirements due to an indirect beneficial interest in the Company’s office lease. The Company rents office facilities, representing less than 2% of the total building, from The Johannesburg Land Company (Proprietary) Limited in which Mr Adam Fleming has an interest. The independent non-executive directors, Professor Taole Mokoena and Dr Humphrey Mathe, do not receive specific voting instructions from the underlying shareholders they represent, and are considered to be independent. Mrs Gayle Wilson does not represent any underlying shareholders. There is a clear division between the roles of the chairman and chief executive officer. The board is responsible for the appointment of the chief executive officer. The chief executive officer, Dr Marc Watchorn, is responsible for formulating, implementing and maintaining the strategic direction of the Company and ensures that the day-to-day affairs of the Company are appropriately supervised and controlled. Independent non-executive directors are directors who have not been employed by the Company for the preceding three years, are in no way related to the Company or to any shareholder, supplier, customer or other director of the Company in a way that would lead to their integrity, impartiality or objectivity to be compromised. They have and will continue to exert significant influence at meetings. None of the non-executive directors has fixed terms of appointment and all the directors are subject, by rotation, to retirement and re-election by shareholders at least every three years, in accordance with the Company’s Articles of Association. The board meets at least four times a year, with additional meetings called if necessary or desirable. Information relevant to a meeting is supplied on a timely basis to the board, ensuring directors can make reasoned decisions. The directors have unrestricted access to information about Wits Gold and its management and, where appropriate, may seek independent professional advice on matters concerning the affairs of Wits Gold, at the Company’s expense.

Board of directors
Composition
The board operates within an approved charter and consists of two executive directors and four non-executive directors, three of whom are independent. The chairman is responsible for the effective functioning of the board. The chairman is also responsible for providing leadership to the board, and overseeing its efficient operation. He is involved in planning the strategic future of the Company and has also been tasked with ensuring effective corporate governance practices. The board is chaired by Mr Adam Fleming, a non-executive director. He is not regarded as an independent director in terms

Operation of the board:
The Wits Gold board operates within the board charter which (inter alia): • regulates the division of responsibilities at board level to ensure a balance of power and authority; • ensures that the Company complies with all relevant laws, regulations and codes of business practice; • ensures prompt and open communication with all stakeholders; • provides the Company with clear strategic direction; • ensures that there is adequate succession planning at senior levels;

18

Wits Gold Annual Report 2009

• reviews operational performance and management of the Company, as well as implementing policies and processes that seek to ensure the integrity of Wits Gold’s risk management; • reviews internal controls; and • oversees director selection, orientation and evaluation.

recommendations to the board for approval. The committee assists the board in developing remuneration policies and practices to attract and retain executives and directors, as well as determining the remuneration of executives and nonexecutive directors.

Attendance at meetings during the period under review

Board committees
Certain functions of the board have been delegated to committees which operate within written charters approved by the board. The effectiveness of the committees is reviewed annually by the board. Members of the committees are appointed by the board.

Name A R Fleming T R Mokoena H L M Mathe G M Wilson* M B Watchorn D M Urquhart

Board (4) 3 4 4 4* 4 4

Audit and risk (3) n/a 3 3 3 n/a n/a

Remuneration and nomination (1) n/a – 1 1 n/a n/a

Audit and risk management committee
The audit and risk management committee consists of at least three independent non-executive directors. The current members of the audit and risk management committee are Mrs Gayle Wilson (chairman), Dr Humphrey Mathe and Prof Taole Mokoena. This committee met three times during the year and is responsible for assisting the board in fulfilling its responsibilities in respect of financial reporting issues, audit management, ensuring compliance with laws and regulations, risk management and development/maintenance of an effective internal control system. Committee members have unrestricted access to information and management of Wits Gold and, where appropriate, may seek the advice of independent professionals on matters concerning the affairs of Wits Gold, at the Company’s expense.

* One meeting held by teleconference

Executive committee
The executive committee is chaired by Dr Marc Watchorn and comprises the executive directors and senior management. The executive committee has responsibility for the day-today running of the business operations and execution of the Company’s strategy. The committee meets regularly, as circumstances dictate, but not less frequently than bi-monthly.

Company secretary
The board is responsible for the appointment of the company secretary. The company secretary will, on an ongoing basis, play an important role in assisting Wits Gold in complying with statutory regulations and the requirements of King II. He will also assist with the induction of new directors, tabling information on relevant regulatory and legislative changes, and giving guidance to the directors regarding their duties and responsibilities. The directors have unlimited access to the advice and services of the company secretary.

Remuneration and nomination committee
This committee consists of at least two independent nonexecutive directors. The current members of the remuneration and nomination committee are Prof Taole Mokoena (chairman), Dr Humphrey Mathe and Mrs Gayle Wilson. The committee meets at least once a year and is responsible for assisting the board in fulfilling its responsibilities in respect of maintaining an appropriate remuneration strategy, ensuring the Company’s directors and staff are fairly rewarded. The remuneration strategy is aimed at ensuring that levels of remuneration are sufficient to attract, retain and motivate employees and, where appropriate, aimed at aligning the executives’ interests with those of shareholders. In setting and approving remuneration levels and structures, the committee makes comparisons to remuneration paid by other companies in the same industry or similar industries, taking into account differing levels of responsibility, performance and complexity. The committee also obtains advice from specialist remuneration consultants as and when needed. The remuneration and nomination committee is responsible for vetting the individuals proposed for directorship and making

Internal control and risk management
The board is responsible for implementing a comprehensive system of control and policies to ensure that risks are mitigated and that the Company’s objectives are attained. It is the board’s responsibility to review the effectiveness of these policies on a regular basis. The Company’s system of internal control is designed to minimise the risk of failure and can consequently only provide reasonable assurance that risks are mitigated. Management is accountable to the board for implementing and monitoring the internal controls with respect to the day-to-day running of Wits Gold. The internal controls are focused on the efficiency and effectiveness of operations, safeguarding the Company’s assets,

Wits Gold Annual Report 2009

19

Corporate governance continued legal and regulatory compliance, business sustainability, reliable reporting and responsible behaviour towards shareholders. Directors are required to obtain clearance from the company secretary before dealing in Wits Gold shares. If the company secretary wishes to deal in the Company’s shares, he is required to obtain written permission from the chairman of the board. In terms of the JSE Listings Requirements, any share dealings by directors are required to be published within 48 hours on the Securities Exchange News Service. A register of share dealings by directors is maintained by the company secretary and reviewed by the board.

External audit
The board will appoint an independent external auditor. In their assessment, the board will ensure that the external auditor observes the highest level of business and professional ethics and that the external auditor’s independence is not impaired in any way. The board requires the external auditor to remain objective and accountable to the Company’s shareholders.

Conflict of interest
In terms of the company’s code of business conduct and ethics, all directors, officers and defined employees are required to sign, annually, a declaration that they are not aware of any conflicts of interest that may exist as a result of their interest or association with any other company, except as disclosed. As soon as an individual becomes aware of any conflict of interest, he or she is required to disclose such conflict immediately and is precluded from voting on conflicted matters.

Health, safety and environmental policy
The objective of Wits Gold is to increase the value of the Company’s mineral assets for the benefit of all stakeholders in a socially and environmentally responsible manner. This written policy is to ensure and maintain safe and healthy working conditions, as well as safe equipment and systems for all employees and contractors involved in the Company’s projects. The Company is firmly committed to the conservation of the environment with the goal of minimising risks through a process of planning and consultation with local communities. Contractors involved in the Company’s projects are required to provide appropriate equipment and training for the safe and environmentally sound performance of their work. Agreements with drilling companies contractually bind them to rehabilitate drill sites to the satisfaction of land owners as well as government authorities.

Shareholder communication
In all communications with shareholders, the board aims to present a balanced and understandable assessment of the Company’s position. This is done through adhering to principles of openness and the spirit of the legislation whilst striving to address material matters in the interests of all shareholders. The board will encourage shareholder attendance at general meetings, and where appropriate, will provide explanations of the effects of resolutions to be proposed. Communication with shareholders will be maintained through periodic presentations of financial results and press announcements, as well as the proactive dissemination of any messages considered relevant to investors.

Code of business conduct and ethics
The board has adopted a code of business conduct and ethics that is committed to the principles of diligence, honesty, integrity, transparency, accountability, responsibility and fairness. The directors accept full responsibility for the application of these principles to ensure that good corporate governance is effectively practiced throughout Wits Gold. Furthermore, the board understands and accepts its responsibility to the shareholders of Wits Gold and endeavours to ensure that the Company conducts its business in the best interests of these shareholders and stakeholders.

Share dealing
The board has implemented a share dealing policy, under which the directors, officers and defined employees will not be permitted to deal in the Company’s shares during a closed period preceding the announcement of the Company’s financial results or during other sensitive periods. Adherence to the share dealing policy is monitored by the company secretary.

“Gold is a treasure, and he who possesses it does all he wishes to in this world, and succeeds in helping souls into paradise.”
Christopher Columbus

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Wits Gold Annual Report 2009

Directors’ approval and statement of responsibility
The Company’s directors are responsible for the preparation and fair presentation of the annual financial statements, comprising the balance sheet at 28 February 2009, the income statement, the statement of changes in equity and cash flow statement for the year then ended, and the notes to the financial statements, which include a summary of significant accounting policies and other explanatory notes, and the directors’ report, in accordance with International Financial Reporting Standards and in the manner required by the Companies Act of South Africa. The directors’ responsibilities include: designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. The directors’ responsibilities also include maintaining adequate accounting records and an effective system of risk management. The directors have made an assessment of the Company’s ability to continue as a going concern and have no reason to believe the business will not be a going concern in the year ahead. The auditor is responsible for reporting on whether the annual financial statements are fairly presented in accordance with the applicable financial reporting framework.

Approval of the annual financial statements
The annual financial statements for the year ended 28 February 2009 set out on pages 24 to 55 were approved by the board of directors on 28 May 2009 and are signed on its behalf by:

M B Watchorn Director

D M Urquhart Director

Secretary’s report
In terms of Section 268G(d) of the Companies Act, 61 of 1973, I certify that the Company has lodged with the Registrar of Companies all such returns as are required of a public company in terms of the Act, and that all such returns are true, correct and up to date.

Brian Dowden Secretary Johannesburg 28 May 2009

Wits Gold Annual Report 2009

21

Directors’ approval and statement of responsibility
The Company’s directors are responsible for the preparation and fair presentation of the annual financial statements, comprising the balance sheet at 28 February 2009, the income statement, the statement of changes in equity and cash flow statement for the year then ended, and the notes to the financial statements, which include a summary of significant accounting policies and other explanatory notes, and the directors’ report, in accordance with International Financial Reporting Standards and in the manner required by the Companies Act of South Africa. The directors’ responsibilities include: designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. The directors’ responsibilities also include maintaining adequate accounting records and an effective system of risk management. The directors have made an assessment of the Company’s ability to continue as a going concern and have no reason to believe the business will not be a going concern in the year ahead. The auditor is responsible for reporting on whether the annual financial statements are fairly presented in accordance with the applicable financial reporting framework.

Approval of the annual financial statements
The annual financial statements for the year ended 28 February 2009 set out on pages 24 to 55 were approved by the board of directors on 28 May 2009 and are signed on its behalf by:

M B Watchorn Director

D M Urquhart Director

Secretary’s report
In terms of Section 268G(d) of the Companies Act, 61 of 1973, I certify that the Company has lodged with the Registrar of Companies all such returns as are required of a public company in terms of the Act, and that all such returns are true, correct and up to date.

Brian Dowden Secretary Johannesburg 28 May 2009

Wits Gold Annual Report 2009

21

Independent auditor’s report to the members of Witwatersrand Consolidated Gold Resources Limited
We have audited the annual financial statements of Witwatersrand Consolidated Gold Resources Limited, which comprise the balance sheet at 28 February 2009, and the income statement, the statement of changes in equity and cash flow statement for the year then ended, and the notes to the financial statements, which include a summary of significant accounting policies and other explanatory notes, and the directors’ report as set out on pages 24 to 55.

Directors’ responsibility for the financial statements
The Company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and in the manner required by the Companies Act of South Africa. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of Witwatersrand Consolidated Gold Resources Limited at 28 February 2009, and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards, and in the manner required by the Companies Act of South Africa. KPMG Inc Registered Auditor

Per J Le Roux Chartered Accountant (SA) Registered Auditor Director 28 May 2009 KPMG Crescent 85 Empire Road Parktown Johannesburg

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Wits Gold Annual Report 2009

Independent auditor’s report to the members of Witwatersrand Consolidated Gold Resources Limited
We have audited the annual financial statements of Witwatersrand Consolidated Gold Resources Limited, which comprise the balance sheet at 28 February 2009, and the income statement, the statement of changes in equity and cash flow statement for the year then ended, and the notes to the financial statements, which include a summary of significant accounting policies and other explanatory notes, and the directors’ report as set out on pages 24 to 55.

Directors’ responsibility for the financial statements
The Company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and in the manner required by the Companies Act of South Africa. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of Witwatersrand Consolidated Gold Resources Limited at 28 February 2009, and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards, and in the manner required by the Companies Act of South Africa. KPMG Inc Registered Auditor

Per J Le Roux Chartered Accountant (SA) Registered Auditor Director 28 May 2009 KPMG Crescent 85 Empire Road Parktown Johannesburg

22

Wits Gold Annual Report 2009

Independent auditor’s report to the directors of Witwatersrand Consolidated Gold Resources Limited in respect of compatibility with Canadian GAAS
In accordance with the requirement contained in National Instrument 52-107 we report below on the compatibility of Canadian Generally Accepted Auditing Standards (Canadian GAAS) and International Standards on Auditing. We conducted our audit for the year ended 28 February 2009 in accordance with International Standards on Auditing. There are no material differences in the form or content of our audit report as compared to an auditor’s report prepared in accordance with Canadian GAAS and if this report were prepared in accordance with Canadian GAAS it would not contain a reservation. KPMG Inc Registered Auditor

Per J Le Roux Chartered Accountant (SA) Registered Auditor Director 28 May 2009 KPMG Crescent 85 Empire Road Parktown Johannesburg

Report of the audit committee
The audit and risk committee assists the board in discharging its duties relating to the safeguarding of assets, the operation of adequate systems and control processes and the preparation of accurate financial reporting in compliance with all legal requirements, accounting standards and stock exchange regulations. Its operations are governed by a charter which clearly sets out the duties and responsibilities of the committee. The committee is made up of three non-executive, independent directors and they met four times during the past year. These meetings are attended by the external auditors and appropriate members of the management team. The committee also meets separately with the external auditors to receive their report on management. The audit committee has deemed the system of internal controls in place to be sufficient to reduce significant risks to an acceptable level. The system is designed to manage the risks faced by Wits Gold as an exploration company and is not a guarantee that the risks are eliminated. The audit committee monitors the available cash resources of the Company having regard to the capital commitments of its exploration programme and its other cash requirements. As required by JSE Listings Requirement 3.84(h), the audit committee has satisfied itself that the financial director has appropriate expertise and experience. The audit committee has considered the annual financial statements of Wits Gold for the year ended 28 February 2009 and discussed them with both management and the external auditors. The audit committee believes that they comply, in all material respects, with the statutory requirements of the various acts governing disclosure and reporting in the annual financial statements. The audit committee has further evaluated the independence of the external auditors and is satisfied that they have maintained their independence during the year. The audit committee has recommended to the board that the annual financial statements be adopted and approved by the board.

Gayle Wilson Chairman – audit and risk committee 28 May 2009

Wits Gold Annual Report 2009

23

Independent auditor’s report to the directors of Witwatersrand Consolidated Gold Resources Limited in respect of compatibility with Canadian GAAS
In accordance with the requirement contained in National Instrument 52-107 we report below on the compatibility of Canadian Generally Accepted Auditing Standards (Canadian GAAS) and International Standards on Auditing. We conducted our audit for the year ended 28 February 2009 in accordance with International Standards on Auditing. There are no material differences in the form or content of our audit report as compared to an auditor’s report prepared in accordance with Canadian GAAS and if this report were prepared in accordance with Canadian GAAS it would not contain a reservation. KPMG Inc Registered Auditor

Per J Le Roux Chartered Accountant (SA) Registered Auditor Director 28 May 2009 KPMG Crescent 85 Empire Road Parktown Johannesburg

Report of the audit committee
The audit and risk committee assists the board in discharging its duties relating to the safeguarding of assets, the operation of adequate systems and control processes and the preparation of accurate financial reporting in compliance with all legal requirements, accounting standards and stock exchange regulations. Its operations are governed by a charter which clearly sets out the duties and responsibilities of the committee. The committee is made up of three non-executive, independent directors and they met four times during the past year. These meetings are attended by the external auditors and appropriate members of the management team. The committee also meets separately with the external auditors to receive their report on management. The audit committee has deemed the system of internal controls in place to be sufficient to reduce significant risks to an acceptable level. The system is designed to manage the risks faced by Wits Gold as an exploration company and is not a guarantee that the risks are eliminated. The audit committee monitors the available cash resources of the Company having regard to the capital commitments of its exploration programme and its other cash requirements. As required by JSE Listings Requirement 3.84(h), the audit committee has satisfied itself that the financial director has appropriate expertise and experience. The audit committee has considered the annual financial statements of Wits Gold for the year ended 28 February 2009 and discussed them with both management and the external auditors. The audit committee believes that they comply, in all material respects, with the statutory requirements of the various acts governing disclosure and reporting in the annual financial statements. The audit committee has further evaluated the independence of the external auditors and is satisfied that they have maintained their independence during the year. The audit committee has recommended to the board that the annual financial statements be adopted and approved by the board.

Gayle Wilson Chairman – audit and risk committee 28 May 2009

Wits Gold Annual Report 2009

23

Directors’ report for the year ended 28 February 2009
The directors present their report for the year ended 28 February 2009. This report forms part of the audited annual financial statements.

Nature of business
Witwatersrand Consolidated Gold Resources Limited (registration number 2002/031365/06), is a company domiciled in the Republic of South Africa. The Company’s shares are publicly traded in South Africa on the JSE Limited stock exchange (primary listing), and in Canada on the Toronto stock exchange (secondary listing). The Company carries on the business of acquiring, preserving, evaluating, trading and developing Prospecting Rights for exploration and investment purposes. To date, the Company has been granted thirteen Prospecting Rights by the Department of Minerals and Energy under the Mineral and Petroleum Resources Development Act of 2002. It has not, and does not in the near future, expect to generate any operating income. Mineral exploration is highly speculative due to a number of significant risks, including the possible failure to discover mineral deposits that are sufficient in quantity and quality to justify the completion of pre-feasibility or feasibility studies. Significant additional work will be required in order to determine if any economic deposits occur on any of the Company’s properties.

Review of operations
The ongoing exploration of the Company’s Prospecting Rights is dependent upon the Company’s ability to obtain additional financing through the joint venturing of projects, debt financing, equity financing or other means. In future, such sources of financing may not be available on acceptable terms, if at all. The Company has, however, always been successful in the past in raising the required capital from its shareholders to fund its operating and exploration activities. An independent scoping study has been completed for the Company’s Bloemhoek project. Based on these results, pre-feasibility studies have been initiated on both the Bloemhoek project and the adjacent De Bron project to further investigate the viability of these projects. These studies are expected to be completed by July 2009 and will seek to optimise the potential mining of the two projects. The directors believe that the Company has sufficient capital to fund its planned exploration activities as well as to cover its estimated operating expenses for the foreseeable future. The Company also has the ability to downscale its operations at reasonably short notice, should this be necessary.

Operating loss
The operating loss for the year under review reduced slightly by R0.3 million compared to the prior year. This reduction results mainly from reductions in respect of stock exchange listing and related expenditure (R4.7 million) and employment related expenditure (R0.4 million). These decreases were offset by elevated consulting fees (R1.5 million), depreciation charge (R0.2 million) and investor relation expenditure (R2.2 million).

Fair value gain on financial asset
This gain arises on recognising, at fair value, the Company’s right to share in the excess proceeds which their advisors would realise on exercising the options granted to them in payment for services rendered to the Company. During the current financial year the advisors exercised all the remaining options which resulted in them settling R14.1 million (2008: R14.3 million) of this financial asset.

Non-current assets
During the year, the Company incurred direct exploration expenditure in the amount of R39.1 million (2008: R17.4 million) which has been capitalised to intangible exploration and evaluation assets. The Company also incurred a further R0.2 million (2008: R0.4 million) on improvements to its land and buildings. The land and buildings were re-valued downwards by R3.8 million (2008: re-valued upwards by R5.1 million) as a result of independent market valuations thereof, undertaken in February 2009 and 2008.

Current assets
The financial asset amounting to R14.1 million at 29 February 2008 was settled in full in April 2008. The Company’s cash and cash equivalents reduced by R19 million during the fiscal year which reflects the normal operational and exploration outflows offset by interest received and capital raised.

Current liabilities
The Company’s rate of physical exploration drilling remained fairly static over the year, and the main contributor to the increase in current liabilities to R12.3 million was an increase in the taxation liability of R3.1 million. This increase results from the provision for capital gains tax as well as normal company tax, the latter due to non-tax deductible expenditure being added back to the loss for the year.

24

Wits Gold Annual Report 2009

Directors’ report for the year ended 28 February 2009
The directors present their report for the year ended 28 February 2009. This report forms part of the audited annual financial statements.

Nature of business
Witwatersrand Consolidated Gold Resources Limited (registration number 2002/031365/06), is a company domiciled in the Republic of South Africa. The Company’s shares are publicly traded in South Africa on the JSE Limited stock exchange (primary listing), and in Canada on the Toronto stock exchange (secondary listing). The Company carries on the business of acquiring, preserving, evaluating, trading and developing Prospecting Rights for exploration and investment purposes. To date, the Company has been granted thirteen Prospecting Rights by the Department of Minerals and Energy under the Mineral and Petroleum Resources Development Act of 2002. It has not, and does not in the near future, expect to generate any operating income. Mineral exploration is highly speculative due to a number of significant risks, including the possible failure to discover mineral deposits that are sufficient in quantity and quality to justify the completion of pre-feasibility or feasibility studies. Significant additional work will be required in order to determine if any economic deposits occur on any of the Company’s properties.

Review of operations
The ongoing exploration of the Company’s Prospecting Rights is dependent upon the Company’s ability to obtain additional financing through the joint venturing of projects, debt financing, equity financing or other means. In future, such sources of financing may not be available on acceptable terms, if at all. The Company has, however, always been successful in the past in raising the required capital from its shareholders to fund its operating and exploration activities. An independent scoping study has been completed for the Company’s Bloemhoek project. Based on these results, pre-feasibility studies have been initiated on both the Bloemhoek project and the adjacent De Bron project to further investigate the viability of these projects. These studies are expected to be completed by July 2009 and will seek to optimise the potential mining of the two projects. The directors believe that the Company has sufficient capital to fund its planned exploration activities as well as to cover its estimated operating expenses for the foreseeable future. The Company also has the ability to downscale its operations at reasonably short notice, should this be necessary.

Operating loss
The operating loss for the year under review reduced slightly by R0.3 million compared to the prior year. This reduction results mainly from reductions in respect of stock exchange listing and related expenditure (R4.7 million) and employment related expenditure (R0.4 million). These decreases were offset by elevated consulting fees (R1.5 million), depreciation charge (R0.2 million) and investor relation expenditure (R2.2 million).

Fair value gain on financial asset
This gain arises on recognising, at fair value, the Company’s right to share in the excess proceeds which their advisors would realise on exercising the options granted to them in payment for services rendered to the Company. During the current financial year the advisors exercised all the remaining options which resulted in them settling R14.1 million (2008: R14.3 million) of this financial asset.

Non-current assets
During the year, the Company incurred direct exploration expenditure in the amount of R39.1 million (2008: R17.4 million) which has been capitalised to intangible exploration and evaluation assets. The Company also incurred a further R0.2 million (2008: R0.4 million) on improvements to its land and buildings. The land and buildings were re-valued downwards by R3.8 million (2008: re-valued upwards by R5.1 million) as a result of independent market valuations thereof, undertaken in February 2009 and 2008.

Current assets
The financial asset amounting to R14.1 million at 29 February 2008 was settled in full in April 2008. The Company’s cash and cash equivalents reduced by R19 million during the fiscal year which reflects the normal operational and exploration outflows offset by interest received and capital raised.

Current liabilities
The Company’s rate of physical exploration drilling remained fairly static over the year, and the main contributor to the increase in current liabilities to R12.3 million was an increase in the taxation liability of R3.1 million. This increase results from the provision for capital gains tax as well as normal company tax, the latter due to non-tax deductible expenditure being added back to the loss for the year.

24

Wits Gold Annual Report 2009

Capital raising
During the year under review, the Company raised a total of R20.7 million (2008: R110.6 million) by way of private placements. This amount includes R14.3 million (2008: R14.3 million) relating to the excess proceeds from options granted to advisors. Net reversal of qualifying costs directly related to the share issues in the amount of R25 000 (2008: Expense R2.2 million), have been transferred to the Company’s share premium account.

Commitments
The Company has committed to spend an additional amount of approximately R7 million on professional consultants and R0.4 million on an operating lease during the next year. Furthermore the Company has also committed to spend R26.1 million on exploration activities during the next five years. All of these commitments will be funded out of existing cash resources.

Litigation
There are no legal or arbitration proceedings in which the Company is or has been engaged, which may have or have had, a material effect on the Company’s financial position.

Dividends
No dividends were declared or paid by the Company during the year under review (2008: R nil).

Going concern
Due to the inherent risk in the nature of exploration activities, there may be uncertainty regarding the recoverability of the Company’s exploration expenditure. To meet its ongoing obligations and maintain its operations, the Company will periodically seek to raise additional equity funding which will be premised on the exploration results and the contingent further exploration plans. This will be in the form of the issue of additional Company shares, to both local and international markets. The Company’s objectives, details of its financial instruments and its exposure to market and liquidity risk are set out in note 21 to the financial statements. Based on the Company’s financial resources, the directors believe that the Company is well positioned to manage its business risks successfully despite the current uncertain economic climate. After making enquiries, the directors have reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future, and that there are no material uncertainties that lead to significant doubt upon the Company’s ability to continue as a going concern. Accordingly, the directors continue to adopt the going concern basis in preparing the annual report and financial statements.

Share capital authorised and issued
There was no change in the authorised share capital of the Company during the year ended 28 February 2009 (2008: no change). The Company issued a total of 600 000 (2008: 1 679 928) shares during the year to 28 February 2009, of which 600 000 (2008: 1 610 928) were to international investors. Full details of the Company’s authorised and issued share capital are set out in note 10 to these financial statements. All of these shares were issued to public shareholders of which none (2008: 879 928) were in terms of a general issue of shares for cash and 600 000 (2008: 800 000) were in terms of a specific issue of shares for cash under option agreements with the Company’s advisors. In terms of the authority granted by shareholders at the annual general meeting held on 25 July 2008, 15% of the issued ordinary share capital of the Company was placed under the control of the directors. This authority expires at the next annual general meeting.

American Depository Shares
At 28 February 2009, 103 831 (2008: 99 489) shares were held by The Bank of New York as Depository for the Company’s American Depository Shares (ADS) programme. Each ADS is equal to one ordinary share.

Share options
Prior to listing, the Company entered into agreements with its two advisors whereby they were granted options to acquire shares in the Company. No new options were granted during the year to 28 February 2009 (2008: Nil) and 600 000 (2008: 800 000) options were exercised. Details of these share options exercised and outstanding during the year are reflected in note 23.1 to these financial statements.

Wits Gold Annual Report 2009

25

Capital raising
During the year under review, the Company raised a total of R20.7 million (2008: R110.6 million) by way of private placements. This amount includes R14.3 million (2008: R14.3 million) relating to the excess proceeds from options granted to advisors. Net reversal of qualifying costs directly related to the share issues in the amount of R25 000 (2008: Expense R2.2 million), have been transferred to the Company’s share premium account.

Commitments
The Company has committed to spend an additional amount of approximately R7 million on professional consultants and R0.4 million on an operating lease during the next year. Furthermore the Company has also committed to spend R26.1 million on exploration activities during the next five years. All of these commitments will be funded out of existing cash resources.

Litigation
There are no legal or arbitration proceedings in which the Company is or has been engaged, which may have or have had, a material effect on the Company’s financial position.

Dividends
No dividends were declared or paid by the Company during the year under review (2008: R nil).

Going concern
Due to the inherent risk in the nature of exploration activities, there may be uncertainty regarding the recoverability of the Company’s exploration expenditure. To meet its ongoing obligations and maintain its operations, the Company will periodically seek to raise additional equity funding which will be premised on the exploration results and the contingent further exploration plans. This will be in the form of the issue of additional Company shares, to both local and international markets. The Company’s objectives, details of its financial instruments and its exposure to market and liquidity risk are set out in note 21 to the financial statements. Based on the Company’s financial resources, the directors believe that the Company is well positioned to manage its business risks successfully despite the current uncertain economic climate. After making enquiries, the directors have reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future, and that there are no material uncertainties that lead to significant doubt upon the Company’s ability to continue as a going concern. Accordingly, the directors continue to adopt the going concern basis in preparing the annual report and financial statements.

Share capital authorised and issued
There was no change in the authorised share capital of the Company during the year ended 28 February 2009 (2008: no change). The Company issued a total of 600 000 (2008: 1 679 928) shares during the year to 28 February 2009, of which 600 000 (2008: 1 610 928) were to international investors. Full details of the Company’s authorised and issued share capital are set out in note 10 to these financial statements. All of these shares were issued to public shareholders of which none (2008: 879 928) were in terms of a general issue of shares for cash and 600 000 (2008: 800 000) were in terms of a specific issue of shares for cash under option agreements with the Company’s advisors. In terms of the authority granted by shareholders at the annual general meeting held on 25 July 2008, 15% of the issued ordinary share capital of the Company was placed under the control of the directors. This authority expires at the next annual general meeting.

American Depository Shares
At 28 February 2009, 103 831 (2008: 99 489) shares were held by The Bank of New York as Depository for the Company’s American Depository Shares (ADS) programme. Each ADS is equal to one ordinary share.

Share options
Prior to listing, the Company entered into agreements with its two advisors whereby they were granted options to acquire shares in the Company. No new options were granted during the year to 28 February 2009 (2008: Nil) and 600 000 (2008: 800 000) options were exercised. Details of these share options exercised and outstanding during the year are reflected in note 23.1 to these financial statements.

Wits Gold Annual Report 2009

25

Directors’ report continued for the year ended 28 February 2009

Major shareholders
The following shareholders hold an interest of five percent or more of the Company’s issued share capital: 2009 % Shares held East Accrington Foundation Continental Africa Gold Resources Consortium (Pty) Limited Tranter Kismet Investments (Pty) Limited Rhodora Limited 18.17 17.75 9.86 8.96 2009 Shares held 5 068 303 4 950 000 2 750 000 2 500 000 2008 % Shares held 18.57 18.14 10.08 9.16 2008 Shares held 5 069 184 4 950 000 2 750 000 2 500 000

Annual general meeting
At the 5th annual general meeting held on 25 July 2008, shareholders passed ordinary resolutions relating to: • • • • the adoption of the financial statements for the year ended 29 February 2008; the re-election of Mrs G M Wilson and Mr D M Urquhart as directors of the Company; the re-appointment of KPMG Inc. as the Company’s auditors and approval of their remuneration; a general authority placing 15% of the issued ordinary shares of the Company under the control of the directors.

Post balance sheet events
The directors are not aware of any material changes that have taken place in the financial position or nature of the Company between 28 February 2009 and the date of this report.

Directors
The directors of the Company during the accounting period and up to the date of this report were as follows: Executive directors Marcus Barrie Watchorn Derek Macdonald Urquhart Non-executive directors Adam Richard Fleming Mbendeni Humphrey Mathe Taole Resetselemang Mokoena Gayle Margaret Wilson Mrs G M Wilson and Mr D M Urquhart retired by rotation and were re-appointed as directors of the Company at the annual general meeting held on 25 July 2008.

Directors’ remuneration and benefits
Salaries R Fees R Share incentive bonus R Total R

Name 2009 Executive directors Dr Marcus Watchorn Mr Derek Urquhart Non-executive directors Mr Adam Fleming Prof Taole Mokoena Dr Humphrey Mathe* Mrs Gayle Wilson Total

2 081 876 1 658 646 – – – – 3 740 522 140 117 91 117

– – 800 600 200 600

211 418 176 194 45 45 45 45 806 806 806 806

2 293 294 1 834 840 186 163 137 163 606 406 006 406

467 200

570 836

4 778 558

*Director’s fees, to the value of R91 200, accruing to Dr H M Mathe were paid to Exxaro Resources Limited.

26

Wits Gold Annual Report 2009

Directors’ report continued for the year ended 28 February 2009

Major shareholders
The following shareholders hold an interest of five percent or more of the Company’s issued share capital: 2009 % Shares held East Accrington Foundation Continental Africa Gold Resources Consortium (Pty) Limited Tranter Kismet Investments (Pty) Limited Rhodora Limited 18.17 17.75 9.86 8.96 2009 Shares held 5 068 303 4 950 000 2 750 000 2 500 000 2008 % Shares held 18.57 18.14 10.08 9.16 2008 Shares held 5 069 184 4 950 000 2 750 000 2 500 000

Annual general meeting
At the 5th annual general meeting held on 25 July 2008, shareholders passed ordinary resolutions relating to: • • • • the adoption of the financial statements for the year ended 29 February 2008; the re-election of Mrs G M Wilson and Mr D M Urquhart as directors of the Company; the re-appointment of KPMG Inc. as the Company’s auditors and approval of their remuneration; a general authority placing 15% of the issued ordinary shares of the Company under the control of the directors.

Post balance sheet events
The directors are not aware of any material changes that have taken place in the financial position or nature of the Company between 28 February 2009 and the date of this report.

Directors
The directors of the Company during the accounting period and up to the date of this report were as follows: Executive directors Marcus Barrie Watchorn Derek Macdonald Urquhart Non-executive directors Adam Richard Fleming Mbendeni Humphrey Mathe Taole Resetselemang Mokoena Gayle Margaret Wilson Mrs G M Wilson and Mr D M Urquhart retired by rotation and were re-appointed as directors of the Company at the annual general meeting held on 25 July 2008.

Directors’ remuneration and benefits
Salaries R Fees R Share incentive bonus R Total R

Name 2009 Executive directors Dr Marcus Watchorn Mr Derek Urquhart Non-executive directors Mr Adam Fleming Prof Taole Mokoena Dr Humphrey Mathe* Mrs Gayle Wilson Total

2 081 876 1 658 646 – – – – 3 740 522 140 117 91 117

– – 800 600 200 600

211 418 176 194 45 45 45 45 806 806 806 806

2 293 294 1 834 840 186 163 137 163 606 406 006 406

467 200

570 836

4 778 558

*Director’s fees, to the value of R91 200, accruing to Dr H M Mathe were paid to Exxaro Resources Limited.

26

Wits Gold Annual Report 2009

Name 2008 Executive directors Dr Marcus Watchorn Mr Derek Urquhart Non-executive directors Mr Adam Fleming Prof Taole Mokoena Dr Humphrey Mathe* Mrs Gayle Wilson Total

Salaries R

Fees R

Share incentive bonus R

Total R

1 840 823 1 532 983 – – – – 3 373 806 130 108 86 108

– – 000 000 400 000

714 250 595 250 154 154 154 154 750 750 750 750

2 555 073 2 128 233 284 262 241 262 750 750 150 750

432 400

1 928 500

5 734 706

*Director’s fees, to the value of R86 400, accruing to Dr H M Mathe were paid to Exxaro Resources Limited.

No amounts have been paid to directors in respect of bonuses and performance related payments, expense allowances, commissions, gains or profit sharing arrangements other than as disclosed above. The directors participated in the Company’s share incentive scheme and during the year, a total of 15 428 (2008: 15 428) shares were awarded to the directors. The effects of these awards are shown in the tables above under “share incentive bonus”. No options have been granted to the directors to acquire shares during the current year (2008: Nil). No fees have been paid, accrued or are proposed to be paid by the Company to any third party in lieu of directors’ fees except as disclosed above (2008: Nil).

Directors’ interest in shares
2009 Indirect beneficial shares 822 698 106 198 2 647 094 372 240 355 713 – 4 303 943 2009 Direct beneficial shares 5 714 4 762 2 1 1 2 476 238 976 238 2009 Total shares 828 412 110 960 2 649 373 357 2 570 478 689 238 2008 Indirect beneficial shares 822 698 106 198 2 647 094 372 240 355 713 – 4 303 943 2008 Direct beneficial shares – – 1 238 – 738 1 000 2 976 2008 Total shares 822 698 106 198 2 648 372 356 1 332 240 451 000

Name Executive directors Dr Marcus Watchorn Mr Derek Urquhart Non-executive directors Mr Adam Fleming Prof Taole Mokoena Dr Humphrey Mathe Mrs Gayle Wilson Total

18 404

4 322 347

4 306 919

There have been no changes to these holdings since 28 February 2009 to the date of this report.

Secretary
The secretary of the Company is Mr B J Dowden and his registered business and postal addresses are: 7 Pam Road Morningside 2057 PO Box 651129 Benmore 2010

Wits Gold Annual Report 2009

27

Name 2008 Executive directors Dr Marcus Watchorn Mr Derek Urquhart Non-executive directors Mr Adam Fleming Prof Taole Mokoena Dr Humphrey Mathe* Mrs Gayle Wilson Total

Salaries R

Fees R

Share incentive bonus R

Total R

1 840 823 1 532 983 – – – – 3 373 806 130 108 86 108

– – 000 000 400 000

714 250 595 250 154 154 154 154 750 750 750 750

2 555 073 2 128 233 284 262 241 262 750 750 150 750

432 400

1 928 500

5 734 706

*Director’s fees, to the value of R86 400, accruing to Dr H M Mathe were paid to Exxaro Resources Limited.

No amounts have been paid to directors in respect of bonuses and performance related payments, expense allowances, commissions, gains or profit sharing arrangements other than as disclosed above. The directors participated in the Company’s share incentive scheme and during the year, a total of 15 428 (2008: 15 428) shares were awarded to the directors. The effects of these awards are shown in the tables above under “share incentive bonus”. No options have been granted to the directors to acquire shares during the current year (2008: Nil). No fees have been paid, accrued or are proposed to be paid by the Company to any third party in lieu of directors’ fees except as disclosed above (2008: Nil).

Directors’ interest in shares
2009 Indirect beneficial shares 822 698 106 198 2 647 094 372 240 355 713 – 4 303 943 2009 Direct beneficial shares 5 714 4 762 2 1 1 2 476 238 976 238 2009 Total shares 828 412 110 960 2 649 373 357 2 570 478 689 238 2008 Indirect beneficial shares 822 698 106 198 2 647 094 372 240 355 713 – 4 303 943 2008 Direct beneficial shares – – 1 238 – 738 1 000 2 976 2008 Total shares 822 698 106 198 2 648 372 356 1 332 240 451 000

Name Executive directors Dr Marcus Watchorn Mr Derek Urquhart Non-executive directors Mr Adam Fleming Prof Taole Mokoena Dr Humphrey Mathe Mrs Gayle Wilson Total

18 404

4 322 347

4 306 919

There have been no changes to these holdings since 28 February 2009 to the date of this report.

Secretary
The secretary of the Company is Mr B J Dowden and his registered business and postal addresses are: 7 Pam Road Morningside 2057 PO Box 651129 Benmore 2010

Wits Gold Annual Report 2009

27

Balance sheet at 28 February 2009
2009 R 2008 R

Note

Assets
Non-current assets Property and equipment Intangible exploration and evaluation asset Deferred taxation Current assets Financial asset Other receivables Cash and cash equivalents Total assets 7 8 9 4 5 6 86 751 487 5 592 553 81 042 530 116 404 118 571 960 – 1 508 824 117 063 136 205 323 447 51 089 076 9 101 988 41 987 088 – 151 446 737 14 053 848 1 324 819 136 068 070 202 535 813

Equity and liabilities
Capital and reserves Ordinary share capital Share premium Equity-settled share-based payment reserve Revaluation reserve Accumulated loss Non-current liabilities Deferred taxation Current liabilities Trade and other payables Taxation payable Provisions Total equity and liabilities 12 13 10 10 11 4 192 999 070 185 17 1 (12 278 971 849 187 288 909 589 857 582 867) – 12 324 377 6 740 930 5 183 447 400 000 205 323 447 190 581 149 272 909 179 582 518 14 998 351 4 392 300 (8 664 929) 2 503 894 9 450 770 6 860 826 2 083 944 506 000 202 535 813

6

28

Wits Gold Annual Report 2009

Balance sheet at 28 February 2009
2009 R 2008 R

Note

Assets
Non-current assets Property and equipment Intangible exploration and evaluation asset Deferred taxation Current assets Financial asset Other receivables Cash and cash equivalents Total assets 7 8 9 4 5 6 86 751 487 5 592 553 81 042 530 116 404 118 571 960 – 1 508 824 117 063 136 205 323 447 51 089 076 9 101 988 41 987 088 – 151 446 737 14 053 848 1 324 819 136 068 070 202 535 813

Equity and liabilities
Capital and reserves Ordinary share capital Share premium Equity-settled share-based payment reserve Revaluation reserve Accumulated loss Non-current liabilities Deferred taxation Current liabilities Trade and other payables Taxation payable Provisions Total equity and liabilities 12 13 10 10 11 4 192 999 070 185 17 1 (12 278 971 849 187 288 909 589 857 582 867) – 12 324 377 6 740 930 5 183 447 400 000 205 323 447 190 581 149 272 909 179 582 518 14 998 351 4 392 300 (8 664 929) 2 503 894 9 450 770 6 860 826 2 083 944 506 000 202 535 813

6

28

Wits Gold Annual Report 2009

Income statement for the year ended 28 February 2009
2009 R – (18 232 838) 14 (18 232 14 15 411 4 245 (34 838) 585 414 320 152 592) 2008 R – (18 541 040) (18 541 040) – 9 020 296 3 509 14 126 675 – 4 609 440 (3 872 813) 736 627 26 089 194 2.82 26 689 194 2.76

Note Revenue Operating costs Operating loss Profit on disposal of non-current assets Finance income Other income Fair value gain on financial asset Interest expense (Loss)/profit for the year Taxation (Loss)/profit for the year after taxation (Loss)/earnings per share and diluted (loss)/earnings per share Weighted average number of shares in issue Basic (loss)/earnings per share (cents) Diluted weighted average number of shares in issue Diluted (loss)/earnings per share (cents) 16.1 17.1

7

15

(2 591 959) (1 031 979) (3 623 938) 27 581 457 (13.14) 27 706 457 (20.26)

Wits Gold Annual Report 2009

29

Income statement for the year ended 28 February 2009
2009 R – (18 232 838) 14 (18 232 14 15 411 4 245 (34 838) 585 414 320 152 592) 2008 R – (18 541 040) (18 541 040) – 9 020 296 3 509 14 126 675 – 4 609 440 (3 872 813) 736 627 26 089 194 2.82 26 689 194 2.76

Note Revenue Operating costs Operating loss Profit on disposal of non-current assets Finance income Other income Fair value gain on financial asset Interest expense (Loss)/profit for the year Taxation (Loss)/profit for the year after taxation (Loss)/earnings per share and diluted (loss)/earnings per share Weighted average number of shares in issue Basic (loss)/earnings per share (cents) Diluted weighted average number of shares in issue Diluted (loss)/earnings per share (cents) 16.1 17.1

7

15

(2 591 959) (1 031 979) (3 623 938) 27 581 457 (13.14) 27 706 457 (20.26)

Wits Gold Annual Report 2009

29

Statement of changes in equity for the year ended 28 February 2009
Equitysettled share-based payment reserve R 7 840 564 – 7 157 787 – – – – 14 998 351 – 2 851 506 – – – – 17 849 857

Ordinary share capital R Balance at 28 February 2007 Profit for the year Equity-settled share-based payment, (refer to note 11) Issue of shares Qualifying costs of share issue Surplus on revaluation of land and buildings Deferred taxation on revaluation Balance at 29 February 2008 Loss for the year Equity-settled share-based payment, (refer to note 11) Issue of shares Net reversal of qualifying costs of share issue Reduction on revaluation of land and buildings Deferred taxation on revaluation Balance at 28 February 2009 256 110 – – 16 799 – – – 272 909 – – 6 000 – – – 278 909

Share premium R 85 430 832 – – 96 316 361 (2 164 675) – – 179 582 518 – – 6 364 000 25 071 – – 185 971 589

Revaluation reserve R – – – – – 5 107 326 (715 026) 4 392 300 – – – – (3 753 170) 548 452 1 187 582

Accumulated loss R (9 401 556) 736 627 – – – – –

Total capital and reserves R 84 125 950 736 627 7 157 787 96 333 160 (2 164 675) 5 107 326 (715 026)

(8 664 929) 190 581 149 (3 623 938) – – – – – (3 623 938) 2 851 506 6 370 000 25 071 (3 753 170) 548 452

(12 288 867) 192 999 070

30

Wits Gold Annual Report 2009

Statement of changes in equity for the year ended 28 February 2009
Equitysettled share-based payment reserve R 7 840 564 – 7 157 787 – – – – 14 998 351 – 2 851 506 – – – – 17 849 857

Ordinary share capital R Balance at 28 February 2007 Profit for the year Equity-settled share-based payment, (refer to note 11) Issue of shares Qualifying costs of share issue Surplus on revaluation of land and buildings Deferred taxation on revaluation Balance at 29 February 2008 Loss for the year Equity-settled share-based payment, (refer to note 11) Issue of shares Net reversal of qualifying costs of share issue Reduction on revaluation of land and buildings Deferred taxation on revaluation Balance at 28 February 2009 256 110 – – 16 799 – – – 272 909 – – 6 000 – – – 278 909

Share premium R 85 430 832 – – 96 316 361 (2 164 675) – – 179 582 518 – – 6 364 000 25 071 – – 185 971 589

Revaluation reserve R – – – – – 5 107 326 (715 026) 4 392 300 – – – – (3 753 170) 548 452 1 187 582

Accumulated loss R (9 401 556) 736 627 – – – – –

Total capital and reserves R 84 125 950 736 627 7 157 787 96 333 160 (2 164 675) 5 107 326 (715 026)

(8 664 929) 190 581 149 (3 623 938) – – – – – (3 623 938) 2 851 506 6 370 000 25 071 (3 753 170) 548 452

(12 288 867) 192 999 070

30

Wits Gold Annual Report 2009

Cash flow statement for the year ended 28 February 2009
2009 R 2008 R

Note Cash flows from operating activities Cash utilised in operating activities Finance income received Interest paid Taxation paid Net cash generated by operating activities Cash flows from investing activities Additions to property and equipment Additions to intangible exploration and evaluation assets Proceeds on disposal of non-current asset Proceeds from financial asset realised Net cash utilised in investing activities Cash flows from financing activities Proceeds from issue of shares Net share issue cost reversal/(expenses) Decrease in loan to shareholder Net cash generated by financing activities (Decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year 9 10 10 4 5 7

18.1

18.2

(15 345 709) 15 411 414 (34 592) (4 322) 26 791 (853 (39 055 183 14 299 622) 442) 268 000

(6 757 842) 9 020 296 – – 2 262 454 (969 266) (17 439 625) – 14 299 000 (4 109 891) 96 333 160 (2 164 675) 43 219 94 211 704 92 364 267 43 703 803 136 068 070

(25 426 796) 6 370 000 25 071 – 6 395 071 (19 004 934) 136 068 070 117 063 136

Wits Gold Annual Report 2009

31

Cash flow statement for the year ended 28 February 2009
2009 R 2008 R

Note Cash flows from operating activities Cash utilised in operating activities Finance income received Interest paid Taxation paid Net cash generated by operating activities Cash flows from investing activities Additions to property and equipment Additions to intangible exploration and evaluation assets Proceeds on disposal of non-current asset Proceeds from financial asset realised Net cash utilised in investing activities Cash flows from financing activities Proceeds from issue of shares Net share issue cost reversal/(expenses) Decrease in loan to shareholder Net cash generated by financing activities (Decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year 9 10 10 4 5 7

18.1

18.2

(15 345 709) 15 411 414 (34 592) (4 322) 26 791 (853 (39 055 183 14 299 622) 442) 268 000

(6 757 842) 9 020 296 – – 2 262 454 (969 266) (17 439 625) – 14 299 000 (4 109 891) 96 333 160 (2 164 675) 43 219 94 211 704 92 364 267 43 703 803 136 068 070

(25 426 796) 6 370 000 25 071 – 6 395 071 (19 004 934) 136 068 070 117 063 136

Wits Gold Annual Report 2009

31

Notes to the financial statements for the year ended 28 February 2009

1.

Reporting entity
Witwatersrand Consolidated Gold Resources Limited is a company domiciled in the Republic of South Africa. The address of the Company’s registered office is 12th Floor, 70 Fox Street, Johannesburg, South Africa. The Company is primarily involved in exploration within South Africa.

2.

Basis of preparation
Statement of compliance The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and its interpretations adopted by the International Accounting Standards Board (IASB) and in the manner required by the South African Companies Act, 61 of 1973 (as amended). The financial statements are prepared on the historical cost basis except for land and buildings and the financial asset, which are measured at fair value. Functional and presentation currency These financial statements are presented in South African Rand, the Company’s functional currency. The South African Rand average closing exchange rates to the Canadian Dollar are as follows: • 29 February 2008 R7.90 = C$1 • 28 February 2009 R7.95 = C$1 • 28 May 2009 R7.23 = C$1

3.

Significant accounting policies
3.1 Changes in accounting policy and disclosures The accounting policies adopted are consistent with those of the previous financial year. The following new and amended IFRS and IFRIC interpretations became effective during the year. These revised standards and interpretations did not have any effect on the financial performance or position of the Company as they are not applicable to the Company. IFRIC 12 Service Concession Arrangements IFRIC 12 was issued in November 2006 and became effective for annual periods beginning on or after 1 January 2008. This interpretation applies to service concession operators and explains how to account for the obligations undertaken and rights received in service concession arrangements. The Company is not such an operator and hence this Interpretation has no impact on the Company. IFRIC 14/IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. IFRIC 14 was issued in July 2007 and became effective for annual periods beginning on or after 1 January 2008. This interpretation provides guidance on how to assess the limit on the amount of surplus in a defined benefit scheme that can be recognised as an asset under IAS 19 Employee Benefits. This interpretation has no impact on the financial position or performance of the Company as the Company is not party to any defined benefit schemes. 3.2 Future changes in accounting policies Recently issued Accounting Pronouncements under IFRS standards and interpretations not yet effective IAS 1 Revised, Presentation of Financial Statements A revised IAS 1 was issued in September 2007 and became effective for financial years beginning on or after 1 January 2009. The main change in this revision is a requirement to present all non-owner changes in equity in a statement of comprehensive income. This statement is not expected to have a material effect on the Company’s annual financial statements in future. IAS 23 Borrowing Costs A revised IAS 23 was issued in March 2007 and became effective for financial years beginning on or after 1 January 2009. The standard has been revised to require capitalisation of borrowing costs when such costs relate to a qualifying asset. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. In accordance with the transitional requirements in the standard, the Company will adopt this as a prospective change. Currently, the Company has not incurred any borrowing costs relating to any qualifying assets.

32

Wits Gold Annual Report 2009

Notes to the financial statements for the year ended 28 February 2009

1.

Reporting entity
Witwatersrand Consolidated Gold Resources Limited is a company domiciled in the Republic of South Africa. The address of the Company’s registered office is 12th Floor, 70 Fox Street, Johannesburg, South Africa. The Company is primarily involved in exploration within South Africa.

2.

Basis of preparation
Statement of compliance The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and its interpretations adopted by the International Accounting Standards Board (IASB) and in the manner required by the South African Companies Act, 61 of 1973 (as amended). The financial statements are prepared on the historical cost basis except for land and buildings and the financial asset, which are measured at fair value. Functional and presentation currency These financial statements are presented in South African Rand, the Company’s functional currency. The South African Rand average closing exchange rates to the Canadian Dollar are as follows: • 29 February 2008 R7.90 = C$1 • 28 February 2009 R7.95 = C$1 • 28 May 2009 R7.23 = C$1

3.

Significant accounting policies
3.1 Changes in accounting policy and disclosures The accounting policies adopted are consistent with those of the previous financial year. The following new and amended IFRS and IFRIC interpretations became effective during the year. These revised standards and interpretations did not have any effect on the financial performance or position of the Company as they are not applicable to the Company. IFRIC 12 Service Concession Arrangements IFRIC 12 was issued in November 2006 and became effective for annual periods beginning on or after 1 January 2008. This interpretation applies to service concession operators and explains how to account for the obligations undertaken and rights received in service concession arrangements. The Company is not such an operator and hence this Interpretation has no impact on the Company. IFRIC 14/IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. IFRIC 14 was issued in July 2007 and became effective for annual periods beginning on or after 1 January 2008. This interpretation provides guidance on how to assess the limit on the amount of surplus in a defined benefit scheme that can be recognised as an asset under IAS 19 Employee Benefits. This interpretation has no impact on the financial position or performance of the Company as the Company is not party to any defined benefit schemes. 3.2 Future changes in accounting policies Recently issued Accounting Pronouncements under IFRS standards and interpretations not yet effective IAS 1 Revised, Presentation of Financial Statements A revised IAS 1 was issued in September 2007 and became effective for financial years beginning on or after 1 January 2009. The main change in this revision is a requirement to present all non-owner changes in equity in a statement of comprehensive income. This statement is not expected to have a material effect on the Company’s annual financial statements in future. IAS 23 Borrowing Costs A revised IAS 23 was issued in March 2007 and became effective for financial years beginning on or after 1 January 2009. The standard has been revised to require capitalisation of borrowing costs when such costs relate to a qualifying asset. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. In accordance with the transitional requirements in the standard, the Company will adopt this as a prospective change. Currently, the Company has not incurred any borrowing costs relating to any qualifying assets.

32

Wits Gold Annual Report 2009

IAS 27 Amendment, Consolidated and Separate Financial Statements An amended IAS 27 was issued in January 2008 and becomes effective for financial years beginning on or after 1 July 2009. The amendment related mainly to accounting for changes in the non-controlling (minority) interest in a subsidiary and the loss of control in the subsidiary. This amendment will currently have no effect on the Company’s annual financial statements as the Company does not prepare consolidated financial statements. IAS 32 Financial Instruments A revised IAS 32 was issued in February 2008 and became effective for financial years beginning on or after 1 January 2009. This statement requires certain financial instruments that would ordinarily meet the definition of a financial liability to be classified as equity. This statement is not expected to have any effect on the Company’s annual financial statements. IAS 39 Amendment, Eligible Hedged Items An amended IAS 39 was issued in July 2008 and becomes effective for financial years beginning on or after 1 July 2009. The amendment clarifies how the existing principles underlying hedge accounting should be applied. This amendment will currently have no effect on the Company’s annual financial statements as the Company does not have any such items. IFRS 2 Amendment, Share Based Payments An amended IFRS 2 was issued in January 2008 and became effective for financial years beginning on or after 1 January 2009. This statement requires clarification on the meaning of “vesting” and “non-vesting” conditions. This amendment is not expected to have a material effect on the Company’s annual financial statements. IFRS 3 Revised, Business Combinations A revised IFRS 3 was issued in January 2008 and becomes effective for financial years beginning on or after 1 July 2009. This revised statement requires various changes to terminology and scope in respect of business combinations. This revision is not expected to have any effect on the Company’s annual financial statements. IFRS 5 Improvements to IFRS 5 Non-current Assets Held for Sale and Discontinued Operations A proposed amendment to IFRS 5 was issued in September 2008 and becomes effective for financial years beginning on or after 1 July 2009. The exposure draft seeks to revise the definition of discontinued operations and related disclosure. This revision is not expected to have any material effect on the Company’s annual financial statements. IFRS 7 Amendment, Financial Instruments Disclosures An amended IFRS 7 was issued in March 2009 and becomes effective for financial years beginning on or after 1 January 2009. The amendment seeks to improve disclosures about financial instruments. This amendment is not expected to have any material effect on the Company’s annual financial statements. IFRS 8 Operating Segments IFRS 8 was issued in November 2006 and became effective for financial years beginning on or after 1 January 2009. This statement requires disclosure of the Company’s operating segments. The Company determined that the operating segments are the same as the business segments previously identified. The Company currently has only one business segment and therefore will not be affected by this statement. IFRIC 13 Customer Loyalty Programmes IFRIC 13 was issued in June 2007 and became effective for annual periods beginning on or after 1 July 2008. This interpretation requires customer loyalty award credits to be accounted for as a separate component of the sales transaction in which they are granted and therefore part of the fair value of the consideration received is allocated to the awards credits and deferred over the period that the award credits are fulfilled. This interpretation is not expected to have any effect on the Company’s annual financial statements as the Company is not party to any such schemes. IFRIC 15 Agreements for the Construction of Real Estate IFRIC 15 was issued 3 July 2008 and became effective for financial years beginning on or after 1 January 2009. This interpretation standardises accounting practice across jurisdictions for the recognition of revenue among real estate developers. This interpretation will not apply to the Company. IFRIC 16 Hedges of a Net Investment in a Foreign Operation IFRIC 16 was issued on 3 July 2008 and becomes effective for financial years beginning on or after 1 October 2008. This interpretation provides guidance on accounting for the hedge of a net investment in a foreign operation in an entity’s consolidated financial statements. This interpretation will not apply to the Company.

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33

IAS 27 Amendment, Consolidated and Separate Financial Statements An amended IAS 27 was issued in January 2008 and becomes effective for financial years beginning on or after 1 July 2009. The amendment related mainly to accounting for changes in the non-controlling (minority) interest in a subsidiary and the loss of control in the subsidiary. This amendment will currently have no effect on the Company’s annual financial statements as the Company does not prepare consolidated financial statements. IAS 32 Financial Instruments A revised IAS 32 was issued in February 2008 and became effective for financial years beginning on or after 1 January 2009. This statement requires certain financial instruments that would ordinarily meet the definition of a financial liability to be classified as equity. This statement is not expected to have any effect on the Company’s annual financial statements. IAS 39 Amendment, Eligible Hedged Items An amended IAS 39 was issued in July 2008 and becomes effective for financial years beginning on or after 1 July 2009. The amendment clarifies how the existing principles underlying hedge accounting should be applied. This amendment will currently have no effect on the Company’s annual financial statements as the Company does not have any such items. IFRS 2 Amendment, Share Based Payments An amended IFRS 2 was issued in January 2008 and became effective for financial years beginning on or after 1 January 2009. This statement requires clarification on the meaning of “vesting” and “non-vesting” conditions. This amendment is not expected to have a material effect on the Company’s annual financial statements. IFRS 3 Revised, Business Combinations A revised IFRS 3 was issued in January 2008 and becomes effective for financial years beginning on or after 1 July 2009. This revised statement requires various changes to terminology and scope in respect of business combinations. This revision is not expected to have any effect on the Company’s annual financial statements. IFRS 5 Improvements to IFRS 5 Non-current Assets Held for Sale and Discontinued Operations A proposed amendment to IFRS 5 was issued in September 2008 and becomes effective for financial years beginning on or after 1 July 2009. The exposure draft seeks to revise the definition of discontinued operations and related disclosure. This revision is not expected to have any material effect on the Company’s annual financial statements. IFRS 7 Amendment, Financial Instruments Disclosures An amended IFRS 7 was issued in March 2009 and becomes effective for financial years beginning on or after 1 January 2009. The amendment seeks to improve disclosures about financial instruments. This amendment is not expected to have any material effect on the Company’s annual financial statements. IFRS 8 Operating Segments IFRS 8 was issued in November 2006 and became effective for financial years beginning on or after 1 January 2009. This statement requires disclosure of the Company’s operating segments. The Company determined that the operating segments are the same as the business segments previously identified. The Company currently has only one business segment and therefore will not be affected by this statement. IFRIC 13 Customer Loyalty Programmes IFRIC 13 was issued in June 2007 and became effective for annual periods beginning on or after 1 July 2008. This interpretation requires customer loyalty award credits to be accounted for as a separate component of the sales transaction in which they are granted and therefore part of the fair value of the consideration received is allocated to the awards credits and deferred over the period that the award credits are fulfilled. This interpretation is not expected to have any effect on the Company’s annual financial statements as the Company is not party to any such schemes. IFRIC 15 Agreements for the Construction of Real Estate IFRIC 15 was issued 3 July 2008 and became effective for financial years beginning on or after 1 January 2009. This interpretation standardises accounting practice across jurisdictions for the recognition of revenue among real estate developers. This interpretation will not apply to the Company. IFRIC 16 Hedges of a Net Investment in a Foreign Operation IFRIC 16 was issued on 3 July 2008 and becomes effective for financial years beginning on or after 1 October 2008. This interpretation provides guidance on accounting for the hedge of a net investment in a foreign operation in an entity’s consolidated financial statements. This interpretation will not apply to the Company.

Wits Gold Annual Report 2009

33

Notes to the financial statements continued for the year ended 28 February 2009

3.

Significant accounting policies continued
3.2 Future changes in accounting policies continued IFRIC 17 Distributions of Non-cash Assets to Owners IFRIC 17 was issued 27 November 2008 and becomes effective for financial years beginning on or after 1 July 2009. This interpretation provides guidance as to when a dividend payable, relating to a distribution of non-cash assets to owners, should be recognised and how it should be measured. This interpretation will not apply to the Company. AC 503 Revised, Accounting for Black Economic Empowerment (BEE) Power Transactions AC 503 was revised in March 2009 and becomes effective for financial years beginning on or after 1 January 2009. This revision takes into account the recent amendments to IRFS 2 – Share Based Payments. This revision is not expected to have any material affect on the Company’s annual financial statements. AC 504 The Limit on a Defined Benefit Asset AC 504 was issued in March 2009 and becomes effective for financial years beginning on or after 1 April 2009. This interpretation seeks to clarify how IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interpretation should be applied by the employer entity participating in a defined benefit pension fund. This interpretation is not expected to have any material effect on the Company’s annual financial statements. 3.3 Significant accounting judgements, estimates and assumptions The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. In the process of applying the Company’s accounting policies, management is required to make judgements, estimates and assumptions which are based on past experience and other factors that are believed to be reasonable in the circumstances. The key assumptions concerning the future and other key sources of estimation uncertainty at balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts assets and liabilities within the next financial year, are discussed below. In particular, information about significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements, is included in the following notes: • Note 4 • Note 5 • Note 6 • Note 7 • Note 13 • Note 15 • Note 23 3.4 Property and equipment Intangible exploration and evaluation assets Deferred taxation Financial asset Provisions Taxation Equity-settled share-based payment

Property and equipment Property consisting of land and buildings is initially measured at cost, including expenditure that is directly attributable to the acquisition of the asset. Subsequently, property is measured at fair value, being its fair value at the date of the revaluation less any subsequent accumulated impairment losses. Any revaluation surplus is credited to the assets revaluation reserve included in the equity section of the balance sheet, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss, in which case the increase is recognised in profit or loss. A revaluation deficit is recognised in profit or loss, except to the extent that it offsets an existing surplus on the same asset recognised in the asset revaluation reserve. Equipment is initially measured at cost and subsequently at historical cost less accumulated depreciation and any impairment losses. Depreciation is charged to the income statement on the straight-line method over the estimated useful lives of each part of an item of equipment. Subsequent costs relating to day to day maintenance of property and equipment are recognised in the income statement, as incurred.

34

Wits Gold Annual Report 2009

Notes to the financial statements continued for the year ended 28 February 2009

3.

Significant accounting policies continued
3.2 Future changes in accounting policies continued IFRIC 17 Distributions of Non-cash Assets to Owners IFRIC 17 was issued 27 November 2008 and becomes effective for financial years beginning on or after 1 July 2009. This interpretation provides guidance as to when a dividend payable, relating to a distribution of non-cash assets to owners, should be recognised and how it should be measured. This interpretation will not apply to the Company. AC 503 Revised, Accounting for Black Economic Empowerment (BEE) Power Transactions AC 503 was revised in March 2009 and becomes effective for financial years beginning on or after 1 January 2009. This revision takes into account the recent amendments to IRFS 2 – Share Based Payments. This revision is not expected to have any material affect on the Company’s annual financial statements. AC 504 The Limit on a Defined Benefit Asset AC 504 was issued in March 2009 and becomes effective for financial years beginning on or after 1 April 2009. This interpretation seeks to clarify how IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interpretation should be applied by the employer entity participating in a defined benefit pension fund. This interpretation is not expected to have any material effect on the Company’s annual financial statements. 3.3 Significant accounting judgements, estimates and assumptions The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. In the process of applying the Company’s accounting policies, management is required to make judgements, estimates and assumptions which are based on past experience and other factors that are believed to be reasonable in the circumstances. The key assumptions concerning the future and other key sources of estimation uncertainty at balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts assets and liabilities within the next financial year, are discussed below. In particular, information about significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements, is included in the following notes: • Note 4 • Note 5 • Note 6 • Note 7 • Note 13 • Note 15 • Note 23 3.4 Property and equipment Intangible exploration and evaluation assets Deferred taxation Financial asset Provisions Taxation Equity-settled share-based payment

Property and equipment Property consisting of land and buildings is initially measured at cost, including expenditure that is directly attributable to the acquisition of the asset. Subsequently, property is measured at fair value, being its fair value at the date of the revaluation less any subsequent accumulated impairment losses. Any revaluation surplus is credited to the assets revaluation reserve included in the equity section of the balance sheet, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss, in which case the increase is recognised in profit or loss. A revaluation deficit is recognised in profit or loss, except to the extent that it offsets an existing surplus on the same asset recognised in the asset revaluation reserve. Equipment is initially measured at cost and subsequently at historical cost less accumulated depreciation and any impairment losses. Depreciation is charged to the income statement on the straight-line method over the estimated useful lives of each part of an item of equipment. Subsequent costs relating to day to day maintenance of property and equipment are recognised in the income statement, as incurred.

34

Wits Gold Annual Report 2009

Where major components of property and equipment have different useful lives, they are accounted for as separate items of property and equipment. Gains and losses on disposal of an item of property and equipment are determined by comparing the proceeds from the disposal with the carrying amount of the asset and are recognised in the income statement. When revalued assets are disposed of, the amounts included in the revaluation surplus are transferred to retained earnings. The depreciation rates applicable to each category of property and equipment are currently as follows: • Buildings • Furniture and fittings • Office equipment • Computer equipment • Motor vehicles • Field equipment 2.00% 16.67% 16.67% 33.33% 20.00% 16.67%

Land is not depreciated. The Company has adopted a policy of revaluation in respect of land and buildings. The remaining useful lives, depreciation rates and residual values of buildings and equipment are reassessed at each financial year end. 3.5 Taxation Taxation comprises current tax, standard tax on companies, capital gains tax and deferred tax. All the above taxation expenses are recognised in profit or loss except to the extent that they relate to items recognised directly in equity, in which case they are recognised in equity. Current tax comprises tax payable calculated on the basis of the expected taxable income for the year, using the tax rates enacted or substantively enacted at the balance sheet date, and any adjustment of tax payable for previous years. Deferred taxation is provided using the balance sheet method. A provision is made for all temporary differences between the tax base of an asset or liability and its balance sheet carrying amount, except where the temporary difference arose on initial recognition of an asset or liability that is not a business combination where accounting income and taxable income are not affected. The effect on deferred taxation of any changes in tax rates is recognised in the income statement, except to the extent that it related to items previously charged or credited directly to equity. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of the assets and liabilities, using the tax rates enacted or substantively enacted at balance sheet date. Deferred tax assets and liabilities are offset if there is legally an enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax authority, on the same taxable entity. The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it is probable that future taxable profit will allow the deferred tax asset to be recovered. 3.6 Provisions Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, for which it is probable that an outflow of economic benefits will occur, and where a reliable estimate can be made of the amount of the obligation. Where the effect of discounting is material, provisions are determined by discounting the expected future cash flows. The discount rate used is a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. The amount recognised as a provision is the best estimate at the balance sheet date of the expenditure required to settle the obligation.

Wits Gold Annual Report 2009

35

Where major components of property and equipment have different useful lives, they are accounted for as separate items of property and equipment. Gains and losses on disposal of an item of property and equipment are determined by comparing the proceeds from the disposal with the carrying amount of the asset and are recognised in the income statement. When revalued assets are disposed of, the amounts included in the revaluation surplus are transferred to retained earnings. The depreciation rates applicable to each category of property and equipment are currently as follows: • Buildings • Furniture and fittings • Office equipment • Computer equipment • Motor vehicles • Field equipment 2.00% 16.67% 16.67% 33.33% 20.00% 16.67%

Land is not depreciated. The Company has adopted a policy of revaluation in respect of land and buildings. The remaining useful lives, depreciation rates and residual values of buildings and equipment are reassessed at each financial year end. 3.5 Taxation Taxation comprises current tax, standard tax on companies, capital gains tax and deferred tax. All the above taxation expenses are recognised in profit or loss except to the extent that they relate to items recognised directly in equity, in which case they are recognised in equity. Current tax comprises tax payable calculated on the basis of the expected taxable income for the year, using the tax rates enacted or substantively enacted at the balance sheet date, and any adjustment of tax payable for previous years. Deferred taxation is provided using the balance sheet method. A provision is made for all temporary differences between the tax base of an asset or liability and its balance sheet carrying amount, except where the temporary difference arose on initial recognition of an asset or liability that is not a business combination where accounting income and taxable income are not affected. The effect on deferred taxation of any changes in tax rates is recognised in the income statement, except to the extent that it related to items previously charged or credited directly to equity. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of the assets and liabilities, using the tax rates enacted or substantively enacted at balance sheet date. Deferred tax assets and liabilities are offset if there is legally an enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax authority, on the same taxable entity. The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it is probable that future taxable profit will allow the deferred tax asset to be recovered. 3.6 Provisions Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, for which it is probable that an outflow of economic benefits will occur, and where a reliable estimate can be made of the amount of the obligation. Where the effect of discounting is material, provisions are determined by discounting the expected future cash flows. The discount rate used is a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. The amount recognised as a provision is the best estimate at the balance sheet date of the expenditure required to settle the obligation.

Wits Gold Annual Report 2009

35

Notes to the financial statements continued for the year ended 28 February 2009

3.

Significant accounting policies continued
3.7 Financial instruments Non-derivative financial instruments Non-derivative financial instruments comprise cash and cash equivalents, other receivables and trade and other payables. Cash and cash equivalents comprise cash balances and call deposits, subsequent to initial recognition; they are measured at cost which equates fair value. Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through the income statement, any directly attributable transaction costs. Subsequent to initial recognition non-derivative financial instruments are measured at amortised cost, using the effective interest method. A financial instrument is recognised if the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Company’s contractual rights to the cash flows from the financial assets expire or if the Company transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset. Financial liabilities are derecognised if the Company’s obligations specified in the contract expire or are discharged or cancelled. 3.8 Intangible exploration and evaluation assets Prospecting Rights Exploration and evaluation costs, comprising the costs of acquiring Prospecting Rights and directly attributable exploration expenditure, are capitalised as intangible exploration and evaluation assets on a project-by-project basis, pending determination of the technical feasibility and commercial viability. The capitalised costs are presented as intangible exploration and evaluation assets as a result of the nature of the assets acquired and related costs incurred. The technical feasibility and commercial viability of extracting a Mineral Resource is considered to be determinable when proven reserves are determined to exist. Upon determination of proven reserves, intangible exploration and evaluation assets attributable to those reserves are first tested for impairment and then reclassified from intangible exploration and evaluation assets to other appropriate categories of non-current assets. Amortisation of these assets commences once these assets are appropriately reclassified and are available for use which is expected to be when they are in commercial production. Intangible exploration and evaluation assets are, as a result, not amortised. Intangible exploration and evaluation assets are assessed for impairment based on the policy provided in note 3.9. 3.9 Impairments Non-financial assets The carrying amounts of the Company’s non-financial assets, other than deferred tax assets, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If there is any indication that an asset may be impaired, its recoverable amount is estimated. The recoverable amount is the higher of its fair value less cost to sell, and its value in use. In assessing value in use, the expected future cash flows from the asset are discounted to their present value, using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. For an asset that does not generate cash inflows that are largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs. An impairment loss is recognised in the income statement whenever the carrying amount of the cash-generating unit exceeds its recoverable amount. A previously recognised impairment loss is reversed if the recoverable amount increases as a result of a change in the estimates used to determine the recoverable amount, but not to an amount higher than the carrying amount that would have been determined for assets (net of depreciation), had no impairment loss been recognised in prior years. Additional guidance as provided by IFRS 6 Exploration for and Evaluation of Mineral Resources is used to determine indicators of impairment for exploration and evaluation assets. These include: • The period to explore, granted in terms of the Prospecting Rights acquired, has expired during the period, will expire in the near future, or is not expected to be renewed; • Further exploration on the projects is neither budgeted nor planned for, in the near future; • A decision was made not to develop a project; and • There is an indication that the carrying amount of the intangible exploration and evaluation assets is unlikely to be recovered in full from a successful development or the sale of the project.

36

Wits Gold Annual Report 2009

Notes to the financial statements continued for the year ended 28 February 2009

3.

Significant accounting policies continued
3.7 Financial instruments Non-derivative financial instruments Non-derivative financial instruments comprise cash and cash equivalents, other receivables and trade and other payables. Cash and cash equivalents comprise cash balances and call deposits, subsequent to initial recognition; they are measured at cost which equates fair value. Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through the income statement, any directly attributable transaction costs. Subsequent to initial recognition non-derivative financial instruments are measured at amortised cost, using the effective interest method. A financial instrument is recognised if the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Company’s contractual rights to the cash flows from the financial assets expire or if the Company transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset. Financial liabilities are derecognised if the Company’s obligations specified in the contract expire or are discharged or cancelled. 3.8 Intangible exploration and evaluation assets Prospecting Rights Exploration and evaluation costs, comprising the costs of acquiring Prospecting Rights and directly attributable exploration expenditure, are capitalised as intangible exploration and evaluation assets on a project-by-project basis, pending determination of the technical feasibility and commercial viability. The capitalised costs are presented as intangible exploration and evaluation assets as a result of the nature of the assets acquired and related costs incurred. The technical feasibility and commercial viability of extracting a Mineral Resource is considered to be determinable when proven reserves are determined to exist. Upon determination of proven reserves, intangible exploration and evaluation assets attributable to those reserves are first tested for impairment and then reclassified from intangible exploration and evaluation assets to other appropriate categories of non-current assets. Amortisation of these assets commences once these assets are appropriately reclassified and are available for use which is expected to be when they are in commercial production. Intangible exploration and evaluation assets are, as a result, not amortised. Intangible exploration and evaluation assets are assessed for impairment based on the policy provided in note 3.9. 3.9 Impairments Non-financial assets The carrying amounts of the Company’s non-financial assets, other than deferred tax assets, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If there is any indication that an asset may be impaired, its recoverable amount is estimated. The recoverable amount is the higher of its fair value less cost to sell, and its value in use. In assessing value in use, the expected future cash flows from the asset are discounted to their present value, using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. For an asset that does not generate cash inflows that are largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs. An impairment loss is recognised in the income statement whenever the carrying amount of the cash-generating unit exceeds its recoverable amount. A previously recognised impairment loss is reversed if the recoverable amount increases as a result of a change in the estimates used to determine the recoverable amount, but not to an amount higher than the carrying amount that would have been determined for assets (net of depreciation), had no impairment loss been recognised in prior years. Additional guidance as provided by IFRS 6 Exploration for and Evaluation of Mineral Resources is used to determine indicators of impairment for exploration and evaluation assets. These include: • The period to explore, granted in terms of the Prospecting Rights acquired, has expired during the period, will expire in the near future, or is not expected to be renewed; • Further exploration on the projects is neither budgeted nor planned for, in the near future; • A decision was made not to develop a project; and • There is an indication that the carrying amount of the intangible exploration and evaluation assets is unlikely to be recovered in full from a successful development or the sale of the project.

36

Wits Gold Annual Report 2009

Financial assets The Company assesses at each balance sheet date whether there is objective evidence that a financial asset is impaired. A provision for impairment of other receivables, held to maturity investments and loans is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the asset. 3.10 Share-based payment Where share-based payments have been made by the Company, the valuation of the respective services received is accounted for on the following basis: • Employee services received The fair value of these services is measured on grant date, based on the difference between the fair value of the shares issued and any amount the employee pays for the shares. The expense is recognised in the income statement as an employee expense over any vesting period and a corresponding amount is credited to an equity-settled share-based payment reserve, which forms part of the Company’s equity. • Corporate advisory services received The fair value of these services is based on an estimation of the amount of work undertaken during the respective financial years and at the market values of similar services. The expense is recognised over the period the services are rendered. These amounts are expensed in the income statement and corresponding amounts are credited to the equity-settled share-based payment reserve which forms part of the Company’s equity, refer to note 23.1. 3.11 Operating lease Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. 3.12 Finance income Finance income, received from cash balances deposited with the Company’s bankers, is recognised in the income statement as it accrues, using the effective interest method. 3.13 Employee benefits Short-term employee benefit obligations comprising cash bonus or profit-sharing plans are measured on an undiscounted basis and are expensed as the related service is provided. A provision is recognised for the amount expected to be paid under short-term benefit obligations if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. 3.14 Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issuing of ordinary shares and share options are recognised as a deduction from equity. 3.15 Treasury shares Own equity instruments (treasury shares) are deducted from equity. No gain or loss is recognised in the income statement on the purchase, sale, issue or cancellation of the Company’s own equity instruments. When share capital recognised as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented as a deduction from total equity. When treasury shares are sold or subsequently reissued, the amount received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to or from retained earnings. 3.16 Foreign currency Transactions in foreign currencies are translated to the functional currency of the Company at exchange rates at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated at the functional currency at the exchange rate at that date. Foreign currency differences arising on retranslation are recognised in the income statement.

Wits Gold Annual Report 2009

37

Financial assets The Company assesses at each balance sheet date whether there is objective evidence that a financial asset is impaired. A provision for impairment of other receivables, held to maturity investments and loans is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the asset. 3.10 Share-based payment Where share-based payments have been made by the Company, the valuation of the respective services received is accounted for on the following basis: • Employee services received The fair value of these services is measured on grant date, based on the difference between the fair value of the shares issued and any amount the employee pays for the shares. The expense is recognised in the income statement as an employee expense over any vesting period and a corresponding amount is credited to an equity-settled share-based payment reserve, which forms part of the Company’s equity. • Corporate advisory services received The fair value of these services is based on an estimation of the amount of work undertaken during the respective financial years and at the market values of similar services. The expense is recognised over the period the services are rendered. These amounts are expensed in the income statement and corresponding amounts are credited to the equity-settled share-based payment reserve which forms part of the Company’s equity, refer to note 23.1. 3.11 Operating lease Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. 3.12 Finance income Finance income, received from cash balances deposited with the Company’s bankers, is recognised in the income statement as it accrues, using the effective interest method. 3.13 Employee benefits Short-term employee benefit obligations comprising cash bonus or profit-sharing plans are measured on an undiscounted basis and are expensed as the related service is provided. A provision is recognised for the amount expected to be paid under short-term benefit obligations if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. 3.14 Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issuing of ordinary shares and share options are recognised as a deduction from equity. 3.15 Treasury shares Own equity instruments (treasury shares) are deducted from equity. No gain or loss is recognised in the income statement on the purchase, sale, issue or cancellation of the Company’s own equity instruments. When share capital recognised as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented as a deduction from total equity. When treasury shares are sold or subsequently reissued, the amount received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to or from retained earnings. 3.16 Foreign currency Transactions in foreign currencies are translated to the functional currency of the Company at exchange rates at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated at the functional currency at the exchange rate at that date. Foreign currency differences arising on retranslation are recognised in the income statement.

Wits Gold Annual Report 2009

37

Notes to the financial statements continued for the year ended 28 February 2009

3.

Significant accounting policies continued
3.17 Earnings per share The Company presents basic and diluted earnings/(loss) per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shares of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shares and the weighted average number of ordinary shares outstanding, for the potential effect of all dilutive ordinary shares. 3.18 Segment reporting A segment is a distinguishable component that is engaged either in providing related products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and return that are different from those of other segments. The Company identified only one business segment, being exploration within South Africa.

3.19 Determination of fair values A number of the Company’s accounting policies and disclosures require the determination of fair value. The fair values of financial assets and liabilities are the same as the carrying amounts as reflected in the balance sheet. Where applicable, further information about assumptions made in determining fair values is disclosed in the relevant notes below. Fair values have been determined for measurement and/or disclosure based on the following methods: Property The fair value of the property is based on the current replacement value as determined by an independent third party. Financial assets The fair value is determined at the present value of the future expected income. Share-based payments The fair value of the share-based payments is determined as follows: • Advisors – based on estimated fair value of services rendered to the Company • Employees – based on the ruling price at grant date expensed over the vesting period 3.20 Cash and cash equivalents Subsequent to initial recognition, cash and cash equivalents are measured at cost which equates fair value. Cash and cash equivalents comprise cash on hand and deposits held on call with financial institutions.

38

Wits Gold Annual Report 2009

Notes to the financial statements continued for the year ended 28 February 2009

3.

Significant accounting policies continued
3.17 Earnings per share The Company presents basic and diluted earnings/(loss) per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shares of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shares and the weighted average number of ordinary shares outstanding, for the potential effect of all dilutive ordinary shares. 3.18 Segment reporting A segment is a distinguishable component that is engaged either in providing related products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and return that are different from those of other segments. The Company identified only one business segment, being exploration within South Africa.

3.19 Determination of fair values A number of the Company’s accounting policies and disclosures require the determination of fair value. The fair values of financial assets and liabilities are the same as the carrying amounts as reflected in the balance sheet. Where applicable, further information about assumptions made in determining fair values is disclosed in the relevant notes below. Fair values have been determined for measurement and/or disclosure based on the following methods: Property The fair value of the property is based on the current replacement value as determined by an independent third party. Financial assets The fair value is determined at the present value of the future expected income. Share-based payments The fair value of the share-based payments is determined as follows: • Advisors – based on estimated fair value of services rendered to the Company • Employees – based on the ruling price at grant date expensed over the vesting period 3.20 Cash and cash equivalents Subsequent to initial recognition, cash and cash equivalents are measured at cost which equates fair value. Cash and cash equivalents comprise cash on hand and deposits held on call with financial institutions.

38

Wits Gold Annual Report 2009

Opening balance R

Additions/ revaluation R

Disposals/ devaluation R

Closing balance R

4.

Property and equipment
4.1 Cost/valuation 2009 Land and buildings Furniture and fittings Office equipment Computer equipment Motor vehicles Field equipment 8 416 206 47 248 574 33 000 419 102 587 022 100 147 6 2 304 381 11 514 616 411 157 250 674 (3 753 170) – – – (184 018) – (3 937 188) – – – – – – – Disposal R – – – – (15 335) – (15 335) – – – – – – – 4 810 213 49 552 771 44 344 035 513 744 254 774

9 525 230 2008 Land and buildings Furniture and fittings Office equipment Computer equipment Motor vehicles Field equipment 2 896 966 178 156 34 207 222 762 116 547 – 3 448 638 4.2 Accumulated depreciation Opening balance R – 545 433 991 777 496

853 622 5 519 034 28 263 12 895 25 825 457 475 33 100 6 076 592 Depreciation R 164 34 8 77 149 6 344 692 118 211 863 976

6 441 664 8 416 000 206 419 47 102 248 587 574 022 33 100 9 525 230 Closing balance R 164 110 25 284 255 9 344 237 551 202 305 472

2009 Land and buildings Furniture and fittings Office equipment Computer equipment Motor vehicles Field equipment

75 17 206 120 2

423 242 2008 Land and buildings Furniture and fittings Office equipment Computer equipment Motor vehicles Field equipment – 43 964 10 882 133 254 13 597 – 201 697

441 204 – 31 581 6 551 73 737 107 180 2 496 221 545

849 111 – 75 545 17 433 206 991 120 777 2 496 423 242

Wits Gold Annual Report 2009

39

Opening balance R

Additions/ revaluation R

Disposals/ devaluation R

Closing balance R

4.

Property and equipment
4.1 Cost/valuation 2009 Land and buildings Furniture and fittings Office equipment Computer equipment Motor vehicles Field equipment 8 416 206 47 248 574 33 000 419 102 587 022 100 147 6 2 304 381 11 514 616 411 157 250 674 (3 753 170) – – – (184 018) – (3 937 188) – – – – – – – Disposal R – – – – (15 335) – (15 335) – – – – – – – 4 810 213 49 552 771 44 344 035 513 744 254 774

9 525 230 2008 Land and buildings Furniture and fittings Office equipment Computer equipment Motor vehicles Field equipment 2 896 966 178 156 34 207 222 762 116 547 – 3 448 638 4.2 Accumulated depreciation Opening balance R – 545 433 991 777 496

853 622 5 519 034 28 263 12 895 25 825 457 475 33 100 6 076 592 Depreciation R 164 34 8 77 149 6 344 692 118 211 863 976

6 441 664 8 416 000 206 419 47 102 248 587 574 022 33 100 9 525 230 Closing balance R 164 110 25 284 255 9 344 237 551 202 305 472

2009 Land and buildings Furniture and fittings Office equipment Computer equipment Motor vehicles Field equipment

75 17 206 120 2

423 242 2008 Land and buildings Furniture and fittings Office equipment Computer equipment Motor vehicles Field equipment – 43 964 10 882 133 254 13 597 – 201 697

441 204 – 31 581 6 551 73 737 107 180 2 496 221 545

849 111 – 75 545 17 433 206 991 120 777 2 496 423 242

Wits Gold Annual Report 2009

39

Notes to the financial statements continued for the year ended 28 February 2009

Opening balance R

Additions R

Disposal R

Depreciation R

Revaluation R

Closing balance R

4.

Property and equipment continued
4.3 Carrying value 2009 Land and buildings Furniture and fittings Office equipment Computer equipment Motor vehicles Field equipment 8 416 130 29 41 453 30 000 874 669 596 245 604 147 6 2 304 381 11 514 616 411 157 250 674 – – – – (168 683) – (168 683) – – – – – – – (164 (34 (8 (77 (149 (6 344) 692) 118) 211) 863) 976) (3 753 170) – – – – – (3 753 170) 5 107 326 – – – – – 5 107 326 4 646 102 23 268 515 35 000 798 962 542 949 302

9 101 988 2008 Land and buildings Furniture and fittings Office equipment Computer equipment Motor vehicles Field equipment 2 896 966 134 192 23 325 89 508 102 950 – 3 246 941

853 622 411 708 28 263 12 895 25 825 457 475 33 100 969 266

(441 204) – (31 581) (6 551) (73 737) (107 180) (2 496) (221 545)

5 592 553 8 416 000 130 874 29 669 41 596 453 245 30 604 9 101 988

The land and buildings are situated at Portion 709 (Portion of Portion 802) of the Farm Vyfhoek 428 in the Northwest Province, Registration Division IQ, measuring 41 hectares. Revaluation of land and buildings The Company appointed Awie Wright Attorneys, an accredited independent property valuer, to determine the fair value of its land and buildings. Fair value is determined by reference to market-based evidence. The date of revaluation was 4 February 2009. (2008: 28 February 2008). At 28 February 2009 the revaluation reserve, net of deferred taxation, amounted to R1 187 582 (2008: R4 392 300). This revaluation reserve may only be distributed to shareholders once it has been realised from any future sale of the land and buildings. If the land and buildings were measured using the cost model, the carrying amount would be as follows: 2009 R Cost Depreciation Net carrying amount 3 456 188 (164 343) 3 291 845 2008 R 3 308 674 – 3 308 674

40

Wits Gold Annual Report 2009

Notes to the financial statements continued for the year ended 28 February 2009

Opening balance R

Additions R

Disposal R

Depreciation R

Revaluation R

Closing balance R

4.

Property and equipment continued
4.3 Carrying value 2009 Land and buildings Furniture and fittings Office equipment Computer equipment Motor vehicles Field equipment 8 416 130 29 41 453 30 000 874 669 596 245 604 147 6 2 304 381 11 514 616 411 157 250 674 – – – – (168 683) – (168 683) – – – – – – – (164 (34 (8 (77 (149 (6 344) 692) 118) 211) 863) 976) (3 753 170) – – – – – (3 753 170) 5 107 326 – – – – – 5 107 326 4 646 102 23 268 515 35 000 798 962 542 949 302

9 101 988 2008 Land and buildings Furniture and fittings Office equipment Computer equipment Motor vehicles Field equipment 2 896 966 134 192 23 325 89 508 102 950 – 3 246 941

853 622 411 708 28 263 12 895 25 825 457 475 33 100 969 266

(441 204) – (31 581) (6 551) (73 737) (107 180) (2 496) (221 545)

5 592 553 8 416 000 130 874 29 669 41 596 453 245 30 604 9 101 988

The land and buildings are situated at Portion 709 (Portion of Portion 802) of the Farm Vyfhoek 428 in the Northwest Province, Registration Division IQ, measuring 41 hectares. Revaluation of land and buildings The Company appointed Awie Wright Attorneys, an accredited independent property valuer, to determine the fair value of its land and buildings. Fair value is determined by reference to market-based evidence. The date of revaluation was 4 February 2009. (2008: 28 February 2008). At 28 February 2009 the revaluation reserve, net of deferred taxation, amounted to R1 187 582 (2008: R4 392 300). This revaluation reserve may only be distributed to shareholders once it has been realised from any future sale of the land and buildings. If the land and buildings were measured using the cost model, the carrying amount would be as follows: 2009 R Cost Depreciation Net carrying amount 3 456 188 (164 343) 3 291 845 2008 R 3 308 674 – 3 308 674

40

Wits Gold Annual Report 2009

Carrying amount at beginning of the year R

Additions R

Carrying amount at end of the year R

5.

Intangible exploration and evaluation assets
2009 Prospecting Rights 2008 Prospecting Rights 41 987 088 24 547 463 39 055 442 17 439 625 81 042 530 41 987 088

Included in Prospecting Rights is capitalised expenditure directly attributable to exploration. This expenditure comprises mainly exploration drilling, consulting fees, a portion of relevant salaries (refer note 14); and costs to acquire the Prospecting Rights. No impairment indicators have been identified which would necessitate further impairment testing. Accordingly, no impairment of these assets has occurred to date (2008: Rnil). 2009 R 2008 R

6.

Deferred taxation
– Deferred tax asset – Deferred tax liability 282 978 (166 574) 116 404 Deferred tax asset The balance comprises: – Assessable loss – Leave pay accrual – Operating lease accrual – Provision for audit fee 215 903 (2 719 797) (2 503 894)

– 176 019 4 831 102 128 282 978

80 781 43 002 – 92 120 215 903 – 80 781 43 002 – 92 120 215 903

Deferred tax assets Balance at beginning of year – Assessable loss – Leave pay accrual – Operating lease accrual – Audit fees Balance at end of year Deferred tax liabilities The balance comprises: – Revaluation of land and buildings – Financial asset – Straight-lining of operating lease

215 (80 133 4 10

903 781) 017 831 008

282 978

166 574 – – 166 574

715 026 2 001 860 2 911 2 719 797

Wits Gold Annual Report 2009

41

Carrying amount at beginning of the year R

Additions R

Carrying amount at end of the year R

5.

Intangible exploration and evaluation assets
2009 Prospecting Rights 2008 Prospecting Rights 41 987 088 24 547 463 39 055 442 17 439 625 81 042 530 41 987 088

Included in Prospecting Rights is capitalised expenditure directly attributable to exploration. This expenditure comprises mainly exploration drilling, consulting fees, a portion of relevant salaries (refer note 14); and costs to acquire the Prospecting Rights. No impairment indicators have been identified which would necessitate further impairment testing. Accordingly, no impairment of these assets has occurred to date (2008: Rnil). 2009 R 2008 R

6.

Deferred taxation
– Deferred tax asset – Deferred tax liability 282 978 (166 574) 116 404 Deferred tax asset The balance comprises: – Assessable loss – Leave pay accrual – Operating lease accrual – Provision for audit fee 215 903 (2 719 797) (2 503 894)

– 176 019 4 831 102 128 282 978

80 781 43 002 – 92 120 215 903 – 80 781 43 002 – 92 120 215 903

Deferred tax assets Balance at beginning of year – Assessable loss – Leave pay accrual – Operating lease accrual – Audit fees Balance at end of year Deferred tax liabilities The balance comprises: – Revaluation of land and buildings – Financial asset – Straight-lining of operating lease

215 (80 133 4 10

903 781) 017 831 008

282 978

166 574 – – 166 574

715 026 2 001 860 2 911 2 719 797

Wits Gold Annual Report 2009

41

Notes to the financial statements continued for the year ended 28 February 2009

2009 R

2008 R

6.

Deferred taxation continued
Balance at beginning of year – Revaluation of land and buildings – Financial asset – Straight-lining of operating lease Balance at end of year Deferred tax assets and liabilities are only offset when the income tax relates to the same legal entity or fiscal authority or they intend to settle the assets and liabilities on a net basis. Historically the Company incurred both accounting and tax losses. During the current year and for the foreseeable future, it is expected that the Company will reflect taxable profits due to the extent of interest income earned and non-tax deductible expenditure incurred. Based on the above the Company has recognised a deferred tax asset. 2 719 (548 (2 001 (2 797 452) 860) 911) – 715 026 2 001 860 2 911 2 719 797

166 574

7.

Financial asset
Balance at beginning of year Fair value gain on financial asset Less: Proceeds from financial asset realised Balance at end of year 14 053 848 245 152 (14 299 000) – 14 226 173 14 126 675 (14 299 000) 14 053 848

The Company entered into service contracts with its advisors whereby it had the right to receive 50% of the net amount realised (sales price less commission and exercise price), if the net amount is greater than the specified amounts in the agreement. Gains or losses that arose on revaluation of this asset have been recognised in the income statement. During the year under review, the option holders exercised their rights and disposed of their underlying shares. This transaction has resulted in the Company receiving R14 299 000 (2008: R14 299 000) in respect of rights granted to the Company under its agreement with the option holder. At the previous balance sheet date, this asset was valued by discounting the R14 299 000 using the daily bank deposit interest rates (10.7%). In the prior year, these options have been valued as currency translated options, using models that adhere to the Black-Scholes option pricing theory. Assumptions regarding share volatility (40%), dividend yield (0%), South African interest rates (9.63% – 9.15%), United States interest rates (5.75% – 5.25%) and the Rand/ US Dollar exchange rates ($1 = R7.23) were made in this valuation. These models depend on the exchange rate, the volatility of the exchange rate and the correlation between the exchange rate and the underlying share. 2009 R 2008 R

8.

Other receivables
South African Revenue Services (SARS) – VAT refund Prepayments Deposits 1 284 953 216 771 7 100 1 508 824 1 253 020 57 769 14 030 1 324 819

42

Wits Gold Annual Report 2009

Notes to the financial statements continued for the year ended 28 February 2009

2009 R

2008 R

6.

Deferred taxation continued
Balance at beginning of year – Revaluation of land and buildings – Financial asset – Straight-lining of operating lease Balance at end of year Deferred tax assets and liabilities are only offset when the income tax relates to the same legal entity or fiscal authority or they intend to settle the assets and liabilities on a net basis. Historically the Company incurred both accounting and tax losses. During the current year and for the foreseeable future, it is expected that the Company will reflect taxable profits due to the extent of interest income earned and non-tax deductible expenditure incurred. Based on the above the Company has recognised a deferred tax asset. 2 719 (548 (2 001 (2 797 452) 860) 911) – 715 026 2 001 860 2 911 2 719 797

166 574

7.

Financial asset
Balance at beginning of year Fair value gain on financial asset Less: Proceeds from financial asset realised Balance at end of year 14 053 848 245 152 (14 299 000) – 14 226 173 14 126 675 (14 299 000) 14 053 848

The Company entered into service contracts with its advisors whereby it had the right to receive 50% of the net amount realised (sales price less commission and exercise price), if the net amount is greater than the specified amounts in the agreement. Gains or losses that arose on revaluation of this asset have been recognised in the income statement. During the year under review, the option holders exercised their rights and disposed of their underlying shares. This transaction has resulted in the Company receiving R14 299 000 (2008: R14 299 000) in respect of rights granted to the Company under its agreement with the option holder. At the previous balance sheet date, this asset was valued by discounting the R14 299 000 using the daily bank deposit interest rates (10.7%). In the prior year, these options have been valued as currency translated options, using models that adhere to the Black-Scholes option pricing theory. Assumptions regarding share volatility (40%), dividend yield (0%), South African interest rates (9.63% – 9.15%), United States interest rates (5.75% – 5.25%) and the Rand/ US Dollar exchange rates ($1 = R7.23) were made in this valuation. These models depend on the exchange rate, the volatility of the exchange rate and the correlation between the exchange rate and the underlying share. 2009 R 2008 R

8.

Other receivables
South African Revenue Services (SARS) – VAT refund Prepayments Deposits 1 284 953 216 771 7 100 1 508 824 1 253 020 57 769 14 030 1 324 819

42

Wits Gold Annual Report 2009

2009 R

2008 R

9.

Cash and cash equivalents
Cash at banks and on hand – Bank balances – Cash on hand Short-term deposits: – Restricted cash provided as security for guarantees issued by the bank 116 824 973 23 163 116 848 136 215 000 117 063 136 135 751 647 101 423 135 853 070 215 000 136 068 070

Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits representing restricted cash (see below) are invested over periods of three months. The Company earns interest at the respective short-term deposit rates. The fair value, being the face value, of cash and short-term deposits is R117 063 136 (2008: R136 068 070). Included in cash and cash equivalents is an amount of R215 000 (2008: R215 000), which has been ceded as security to cover guarantees issued by the Company’s bankers in favour of the Department of Minerals and Energy. These rehabilitation guarantees have been issued in order to comply with conditions under which the Prospecting Rights were granted.

10. Ordinary share capital
Date issued Share capital – authorised Incorporation at par Subdivision Increase of shares authorised Balance at Share capital – issued Balance at Issued at premium of R94.99 Options exercised at a premium of R6.36 Options exercised at a premium of R31.84 Qualifying costs of share issue Balance at Options exercised at a premium of R6.36 Options exercised at a premium of R31.84 Net reversal of qualifying cost of share issue Balance at 14/05/2004 20/10/2004 28/02/2009 28/02/2007 04/07/2007 28/12/2007 28/12/2007 29/02/2008 06/05/2008 06/05/2008 29/04/2008 28/02/2009 0.01 0.01 Par value R/share 1,00 0,01 0,01 Number of shares Share capital R 1 000 1 000 499 000 500 000 256 110 8 799 5 000 3 000 – 272 909 5 000 1 000 – 278 909 Share premium R – – – – 85 430 832 83 584 361 3 180 000 9 552 000 (2 164 675) 179 582 518 3 180 000 3 184 000 25 071 185 971 589 Total R 1 000 1 000 499 000 500 000 85 686 942 83 593 160 3 185 000 9 555 000 (2 164 675) 179 855 427 3 185 000 3 185 000 25 071 186 250 498

1 000 100 000 49 900 000 50 000 000 25 610 988 879 928 500 000 300 000 – 27 290 916 500 000 100 000 – 27 890 916

0.01 0.01 0.01

Wits Gold Annual Report 2009

43

2009 R

2008 R

9.

Cash and cash equivalents
Cash at banks and on hand – Bank balances – Cash on hand Short-term deposits: – Restricted cash provided as security for guarantees issued by the bank 116 824 973 23 163 116 848 136 215 000 117 063 136 135 751 647 101 423 135 853 070 215 000 136 068 070

Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits representing restricted cash (see below) are invested over periods of three months. The Company earns interest at the respective short-term deposit rates. The fair value, being the face value, of cash and short-term deposits is R117 063 136 (2008: R136 068 070). Included in cash and cash equivalents is an amount of R215 000 (2008: R215 000), which has been ceded as security to cover guarantees issued by the Company’s bankers in favour of the Department of Minerals and Energy. These rehabilitation guarantees have been issued in order to comply with conditions under which the Prospecting Rights were granted.

10. Ordinary share capital
Date issued Share capital – authorised Incorporation at par Subdivision Increase of shares authorised Balance at Share capital – issued Balance at Issued at premium of R94.99 Options exercised at a premium of R6.36 Options exercised at a premium of R31.84 Qualifying costs of share issue Balance at Options exercised at a premium of R6.36 Options exercised at a premium of R31.84 Net reversal of qualifying cost of share issue Balance at 14/05/2004 20/10/2004 28/02/2009 28/02/2007 04/07/2007 28/12/2007 28/12/2007 29/02/2008 06/05/2008 06/05/2008 29/04/2008 28/02/2009 0.01 0.01 Par value R/share 1,00 0,01 0,01 Number of shares Share capital R 1 000 1 000 499 000 500 000 256 110 8 799 5 000 3 000 – 272 909 5 000 1 000 – 278 909 Share premium R – – – – 85 430 832 83 584 361 3 180 000 9 552 000 (2 164 675) 179 582 518 3 180 000 3 184 000 25 071 185 971 589 Total R 1 000 1 000 499 000 500 000 85 686 942 83 593 160 3 185 000 9 555 000 (2 164 675) 179 855 427 3 185 000 3 185 000 25 071 186 250 498

1 000 100 000 49 900 000 50 000 000 25 610 988 879 928 500 000 300 000 – 27 290 916 500 000 100 000 – 27 890 916

0.01 0.01 0.01

Wits Gold Annual Report 2009

43

Notes to the financial statements continued for the year ended 28 February 2009

10. Ordinary share capital continued
Employees’ shareholding On 14 December 2004, 500 000 shares were issued and set aside for Company employees. The shares have been issued to a nominee company which is not under the control of the Company or its directors. Of the 351 220 (2008: 300 093) shares allocated at 28 February 2009, 251 950 (2008: 251 950) of these shares had been allocated to employees, without any restrictions on vesting of ownership, and 99 270 shares (2008: 94 429) were allocated with ownership vesting over a period to 28 February 2010. As at 28 February 2009, 65 381 (2008: 31 543) shares of the shares allocated with vesting rights had been awarded to respective beneficiaries. Wits Gold share incentive scheme (the scheme) The scheme was approved by the Company’s shareholders at its annual general meeting on 12 October 2007. All employees (provided they have served a minimum probationary period of six months with the Company), executive and non-executive directors and the secretary of the Company shall be entitled to participate in the scheme. The aggregate number of shares shall not exceed 697 000 (2008: 682 000) shares, constituting in aggregate 2.5% of the entire issued share capital of the Company, with no individual Participant being entitled to participate in the scheme with respect to more than 0.5% of the entire issued share capital of the Company. Awards of ordinary shares in Wits Gold shall be granted over a period of three years on dates determined by the board of directors from time to time, provided that the granting of Awards at that time is not precluded by any restrictions on transactions in securities imposed by statute, order, regulation or government directive or by any code adopted by the Company based on the Listings Requirements of the JSE. Awards are granted by way of notice in writing which sets out the number of ordinary shares comprised in the Award and the date of the Award. Participants, unless otherwise determined by the board of directors, are not required to pay for the ordinary shares constituting any Award. However, any liability for any tax, levies, deductions or withholdings shall be for the account of the Participant. The shares, once awarded to Participants under the scheme, shall rank pari passu, in all respects, with all other issued shares of the Company. Prior to being awarded, the shares held under the scheme will not have their votes taken into account at general meetings of Wits Gold. In the event of a takeover or merger involving Wits Gold, the relevant shares shall be awarded to the Participants with effect from the business day immediately preceding such event. The shares to be included in the scheme have been issued and are being held by Hengilcon Secretarial Services (Pty) Limited for future allocation. In the event of a Participant ceasing to be an employee due to disability, death or retirement, the board of directors may, in its discretion, award shares to such person on a pro rata basis on the date of such event. Equity-settled share-based payments – advisors During the year under review the Company entered into the following agreements with two of its advisors, whereby shares may be issued to them; 1) Qinisele Resources (Pty) Limited – an agreement was entered into where, for services rendered, they would be entitled to a success fee should the Company’s shares outperform the JSE Limited’s gold index over the twelve months ended 15 April 2009. This success fee is calculated using the average of the daily volume weighted average share price for the period as a percentage of the closing share price on 15 April 2008. This percentage is then measured against the JSE Limited’s average daily closing price of the gold index expressed as a percentage of the closing price of the index on 15 April 2008. The quantum of the success fee would be based on a sliding scale with a minimum fee of R2.5 million where the out performance was greater than 10% to a maximum fee of R27.5 million where the out performance was greater than 30% . The fee would be payable in cash or in shares. Qinisele Resources has not earned any success fee in terms of this agreement as minimum out performance of 10% was not achieved. Accordingly no accounting entries have been made in the Company’s records. 2) Michael Baybak and Company Inc.(Baybak) – the agreement will run over the five year period ending on 15 October 2013 and entitles this advisor to a fee based on the performance of the Company’s shares against a base price of R59.11, being the 30 day volume weighted average of the share price on 15 October 2008. On each anniversary date Baybak would be entitled to a fee calculated on the share price increase from the base price multiplied by 25 000. This fee would be settled in shares at the then ruling price. At the same time, each year, Baybak will be entitled to subscribe for shares to the value of R1 477 750 also to be issued at the then ruling price. None of the shares will be issued at a discount. Baybak may elect not to take any fee on an annual basis and to postpone the fee to a date not later than 15 April 2014.

44

Wits Gold Annual Report 2009

Notes to the financial statements continued for the year ended 28 February 2009

10. Ordinary share capital continued
Employees’ shareholding On 14 December 2004, 500 000 shares were issued and set aside for Company employees. The shares have been issued to a nominee company which is not under the control of the Company or its directors. Of the 351 220 (2008: 300 093) shares allocated at 28 February 2009, 251 950 (2008: 251 950) of these shares had been allocated to employees, without any restrictions on vesting of ownership, and 99 270 shares (2008: 94 429) were allocated with ownership vesting over a period to 28 February 2010. As at 28 February 2009, 65 381 (2008: 31 543) shares of the shares allocated with vesting rights had been awarded to respective beneficiaries. Wits Gold share incentive scheme (the scheme) The scheme was approved by the Company’s shareholders at its annual general meeting on 12 October 2007. All employees (provided they have served a minimum probationary period of six months with the Company), executive and non-executive directors and the secretary of the Company shall be entitled to participate in the scheme. The aggregate number of shares shall not exceed 697 000 (2008: 682 000) shares, constituting in aggregate 2.5% of the entire issued share capital of the Company, with no individual Participant being entitled to participate in the scheme with respect to more than 0.5% of the entire issued share capital of the Company. Awards of ordinary shares in Wits Gold shall be granted over a period of three years on dates determined by the board of directors from time to time, provided that the granting of Awards at that time is not precluded by any restrictions on transactions in securities imposed by statute, order, regulation or government directive or by any code adopted by the Company based on the Listings Requirements of the JSE. Awards are granted by way of notice in writing which sets out the number of ordinary shares comprised in the Award and the date of the Award. Participants, unless otherwise determined by the board of directors, are not required to pay for the ordinary shares constituting any Award. However, any liability for any tax, levies, deductions or withholdings shall be for the account of the Participant. The shares, once awarded to Participants under the scheme, shall rank pari passu, in all respects, with all other issued shares of the Company. Prior to being awarded, the shares held under the scheme will not have their votes taken into account at general meetings of Wits Gold. In the event of a takeover or merger involving Wits Gold, the relevant shares shall be awarded to the Participants with effect from the business day immediately preceding such event. The shares to be included in the scheme have been issued and are being held by Hengilcon Secretarial Services (Pty) Limited for future allocation. In the event of a Participant ceasing to be an employee due to disability, death or retirement, the board of directors may, in its discretion, award shares to such person on a pro rata basis on the date of such event. Equity-settled share-based payments – advisors During the year under review the Company entered into the following agreements with two of its advisors, whereby shares may be issued to them; 1) Qinisele Resources (Pty) Limited – an agreement was entered into where, for services rendered, they would be entitled to a success fee should the Company’s shares outperform the JSE Limited’s gold index over the twelve months ended 15 April 2009. This success fee is calculated using the average of the daily volume weighted average share price for the period as a percentage of the closing share price on 15 April 2008. This percentage is then measured against the JSE Limited’s average daily closing price of the gold index expressed as a percentage of the closing price of the index on 15 April 2008. The quantum of the success fee would be based on a sliding scale with a minimum fee of R2.5 million where the out performance was greater than 10% to a maximum fee of R27.5 million where the out performance was greater than 30% . The fee would be payable in cash or in shares. Qinisele Resources has not earned any success fee in terms of this agreement as minimum out performance of 10% was not achieved. Accordingly no accounting entries have been made in the Company’s records. 2) Michael Baybak and Company Inc.(Baybak) – the agreement will run over the five year period ending on 15 October 2013 and entitles this advisor to a fee based on the performance of the Company’s shares against a base price of R59.11, being the 30 day volume weighted average of the share price on 15 October 2008. On each anniversary date Baybak would be entitled to a fee calculated on the share price increase from the base price multiplied by 25 000. This fee would be settled in shares at the then ruling price. At the same time, each year, Baybak will be entitled to subscribe for shares to the value of R1 477 750 also to be issued at the then ruling price. None of the shares will be issued at a discount. Baybak may elect not to take any fee on an annual basis and to postpone the fee to a date not later than 15 April 2014.

44

Wits Gold Annual Report 2009

2009 R

2008 R

11. Equity-settled share-based payment reserves
The equity-settled share-based payment reserve is analysed as follows: Balance at beginning of the year Services rendered by employees Services rendered by corporate advisors Balance at end of the year The impact of equity-settled share-based payments is a charge to the income statement of R2 851 506 (2008: R7 157 787). At February 2009, the equity-settled share-based payment reserve in the balance sheet amounted to R17 849 857 (2008: R14 998 351). The effect of the equity-settled share-based payment is a 10.34 cents increase in loss (2008: 27.44 cents decrease in profit) per share and a 10.34 cents increase in diluted loss (2008: 26.82 cents decrease in diluted profit) per share. For further information relating to equity-settled share-based payments, refer to notes 7 and 23. 14 998 351 2 690 068 161 438 17 849 857 7 840 564 5 009 187 2 148 600 14 998 351

12. Trade and other payables
Trade payables Leave pay accrual Audit fee accrual SARS (employment taxes) Other accrued expenses Operating lease rentals 5 080 023 628 638 364 740 – 650 275 17 254 6 740 930 3 056 123 357 380 329 000 1 233 160 1 883 729 1 434 6 860 826

13. Provisions
Balance at the beginning of the year Reversal during the year Raised during the year Balance at the end of the year 506 000 (506 000) 400 000 400 000 – – 506 000 506 000

Estimated costs for the rehabilitation of the exploration drill sites are recognised based on information contained in the Company’s drilling contracts. Due to the nature of the drilling contracts, these provisions will be settled within twelve months of the balance sheet date. The provision is recognised when drilling commences and is reversed when the contractor has rehabilitated the drill site.

Wits Gold Annual Report 2009

45

2009 R

2008 R

11. Equity-settled share-based payment reserves
The equity-settled share-based payment reserve is analysed as follows: Balance at beginning of the year Services rendered by employees Services rendered by corporate advisors Balance at end of the year The impact of equity-settled share-based payments is a charge to the income statement of R2 851 506 (2008: R7 157 787). At February 2009, the equity-settled share-based payment reserve in the balance sheet amounted to R17 849 857 (2008: R14 998 351). The effect of the equity-settled share-based payment is a 10.34 cents increase in loss (2008: 27.44 cents decrease in profit) per share and a 10.34 cents increase in diluted loss (2008: 26.82 cents decrease in diluted profit) per share. For further information relating to equity-settled share-based payments, refer to notes 7 and 23. 14 998 351 2 690 068 161 438 17 849 857 7 840 564 5 009 187 2 148 600 14 998 351

12. Trade and other payables
Trade payables Leave pay accrual Audit fee accrual SARS (employment taxes) Other accrued expenses Operating lease rentals 5 080 023 628 638 364 740 – 650 275 17 254 6 740 930 3 056 123 357 380 329 000 1 233 160 1 883 729 1 434 6 860 826

13. Provisions
Balance at the beginning of the year Reversal during the year Raised during the year Balance at the end of the year 506 000 (506 000) 400 000 400 000 – – 506 000 506 000

Estimated costs for the rehabilitation of the exploration drill sites are recognised based on information contained in the Company’s drilling contracts. Due to the nature of the drilling contracts, these provisions will be settled within twelve months of the balance sheet date. The provision is recognised when drilling commences and is reversed when the contractor has rehabilitated the drill site.

Wits Gold Annual Report 2009

45

Notes to the financial statements continued for the year ended 28 February 2009

2009 R

2008 R

14. Operating loss
Operating loss is arrived at after taking into account: Income Profit on disposal of non-current asset Expenditure Auditors’ remuneration – audit fee – prior year under provision Depreciation – property and equipment Directors’ emoluments Executives – managerial remuneration – cost to company – equity-settled share-based payment – less amounts capitalised to intangible exploration and evaluation assets Non-executives – for services as directors – equity-settled share-based payment Employee benefits expense – salaries – cost to company – less amounts capitalised to intangible exploration and evaluation assets – equity-settled share-based payments Operating lease rentals – premises* Legal fees Equity-settled share-based payment – corporate advisors 14 585 364 740 364 740 – 441 204 4 555 371 3 802 770 916 649 (164 048) 1 014 112 472 489 541 623 3 056 712 3 341 756 (1 516 841) 1 231 797 225 224 60 493 161 438 – 392 937 329 000 63 937 221 545 4 814 860 3 545 699 2 016 630 (747 469) 1 623 975 432 400 1 191 575 2 593 459 2 524 495 (1 732 018) 1 800 982 175 879 1 447 638 2 148 600

* In terms of the lease agreement, the monthly rental will escalate by 9% per annum and the agreement may be renewed with effect 1 February 2011 at the then market related terms.

46

Wits Gold Annual Report 2009

Notes to the financial statements continued for the year ended 28 February 2009

2009 R

2008 R

14. Operating loss
Operating loss is arrived at after taking into account: Income Profit on disposal of non-current asset Expenditure Auditors’ remuneration – audit fee – prior year under provision Depreciation – property and equipment Directors’ emoluments Executives – managerial remuneration – cost to company – equity-settled share-based payment – less amounts capitalised to intangible exploration and evaluation assets Non-executives – for services as directors – equity-settled share-based payment Employee benefits expense – salaries – cost to company – less amounts capitalised to intangible exploration and evaluation assets – equity-settled share-based payments Operating lease rentals – premises* Legal fees Equity-settled share-based payment – corporate advisors 14 585 364 740 364 740 – 441 204 4 555 371 3 802 770 916 649 (164 048) 1 014 112 472 489 541 623 3 056 712 3 341 756 (1 516 841) 1 231 797 225 224 60 493 161 438 – 392 937 329 000 63 937 221 545 4 814 860 3 545 699 2 016 630 (747 469) 1 623 975 432 400 1 191 575 2 593 459 2 524 495 (1 732 018) 1 800 982 175 879 1 447 638 2 148 600

* In terms of the lease agreement, the monthly rental will escalate by 9% per annum and the agreement may be renewed with effect 1 February 2011 at the then market related terms.

46

Wits Gold Annual Report 2009

2009 R

2008 R

15. Taxation
The major components of income tax expenses South African normal tax Current income tax: Current income tax charge Capital gains tax on financial asset Capital gains tax on waiving of right Secondary taxation on companies Current income tax charge Deferred taxation Relating to the origination and reversal of temporary differences Income tax expense reported in the income statement Statement of changes in equity Deferred tax related to items charged or credited directly to equity: Net (reduction)/gain on revaluation of land and buildings Income tax(reversal)/expense reported in equity Reconciliation of effective tax rate Total income tax expense differs from the amount computed by applying the South African normal tax rate to (loss)/profit before tax. The reasons for these differences are: South African normal tax rate Increase in rate of tax due to: Disallowed expenditure Capital gains tax * Secondary tax on companies Other adjustments Decrease in rate of tax due to: Utilisation of tax losses Capital gains tax * Other adjustments Effective tax rate

1 101 615 2 002 210 – – (2 071 846) 1 031 979

– 2 073 355 6 267 4 322 1 788 869 3 872 813

(548 452) (548 452)

715 026 715 026

(28.0) 72.8 0.0 0.0 0.7 (3.1) (2.6) 0.0 39.8

29.0 71.9 0.5 0.1 0.0 (16.8) 0.0 (0.7) 84.0

* Includes the capital gains tax rate effect on the movement in temporary differences which are calculated at the capital gains tax rate.

Wits Gold Annual Report 2009

47

2009 R

2008 R

15. Taxation
The major components of income tax expenses South African normal tax Current income tax: Current income tax charge Capital gains tax on financial asset Capital gains tax on waiving of right Secondary taxation on companies Current income tax charge Deferred taxation Relating to the origination and reversal of temporary differences Income tax expense reported in the income statement Statement of changes in equity Deferred tax related to items charged or credited directly to equity: Net (reduction)/gain on revaluation of land and buildings Income tax(reversal)/expense reported in equity Reconciliation of effective tax rate Total income tax expense differs from the amount computed by applying the South African normal tax rate to (loss)/profit before tax. The reasons for these differences are: South African normal tax rate Increase in rate of tax due to: Disallowed expenditure Capital gains tax * Secondary tax on companies Other adjustments Decrease in rate of tax due to: Utilisation of tax losses Capital gains tax * Other adjustments Effective tax rate

1 101 615 2 002 210 – – (2 071 846) 1 031 979

– 2 073 355 6 267 4 322 1 788 869 3 872 813

(548 452) (548 452)

715 026 715 026

(28.0) 72.8 0.0 0.0 0.7 (3.1) (2.6) 0.0 39.8

29.0 71.9 0.5 0.1 0.0 (16.8) 0.0 (0.7) 84.0

* Includes the capital gains tax rate effect on the movement in temporary differences which are calculated at the capital gains tax rate.

Wits Gold Annual Report 2009

47

Notes to the financial statements continued for the year ended 28 February 2009

2009 R

2008 R

16. Basic (loss)/earnings per share and headline (loss)/earnings per share
16.1 Basic (loss)/earnings per share – cents The basic (loss)/earnings per ordinary share calculation is based on: • weighted average of 27 581 457 (2008: 26 089 194) shares outstanding during the year; and • net loss attributable to ordinary shareholders of R3 623 938 (2008: profit of R736 627). 16.2 Headline (loss)/earnings per share – cents The headline (loss)/earnings per ordinary share calculation is based on: • weighted average of 27 581 457 (2008: 26 089 194) shares outstanding during the year; and • net loss attributable to ordinary shareholders of R3 638 523 (2008: profit of R736 627). The (loss)/profit attributable to ordinary shareholders is reconciled to headline (loss)/profit as follows: Net (loss)/profit attributable to ordinary shareholders Profit on disposal of non-current asset Headline (loss)/profit (13.19) 2.82 (13.14) 2.82

(3 623 938) (14 585) (3 638 523)

736 627 – 736 627

17.

Diluted(loss)/earnings per share and diluted headline (loss)/earnings per share
17.1 Diluted (loss)/earnings per share – cents The calculation of diluted loss/(earnings) per ordinary share is based on: • diluted weighted average of 27 706 457 (2008: 26 689 194) shares outstanding during the year; and • diluted net loss attributable to ordinary shareholders of R5 614 572 (2008: profit of R736 627). The weighted average number of shares has been adjusted by the following to arrive at the diluted number of shares Weighted average number of shares Effect of future equity-settled share-based payment transactions Diluted weighted average number of shares (Loss)/profit used to calculate diluted (loss)/earnings per share is reconciled as follows Net (loss)/profit attributable to ordinary shareholders After-tax effect of future equity-settled share-based payment transactions Diluted net (loss)/profit attributable to ordinary shareholders (20.26) 2.76

27 581 457 125 000 27 706 457 (3 623 938) (1 990 634) (5 614 572)

26 089 194 600 000 26 689 194 736 627 – 736 627

48

Wits Gold Annual Report 2009

Notes to the financial statements continued for the year ended 28 February 2009

2009 R

2008 R

16. Basic (loss)/earnings per share and headline (loss)/earnings per share
16.1 Basic (loss)/earnings per share – cents The basic (loss)/earnings per ordinary share calculation is based on: • weighted average of 27 581 457 (2008: 26 089 194) shares outstanding during the year; and • net loss attributable to ordinary shareholders of R3 623 938 (2008: profit of R736 627). 16.2 Headline (loss)/earnings per share – cents The headline (loss)/earnings per ordinary share calculation is based on: • weighted average of 27 581 457 (2008: 26 089 194) shares outstanding during the year; and • net loss attributable to ordinary shareholders of R3 638 523 (2008: profit of R736 627). The (loss)/profit attributable to ordinary shareholders is reconciled to headline (loss)/profit as follows: Net (loss)/profit attributable to ordinary shareholders Profit on disposal of non-current asset Headline (loss)/profit (13.19) 2.82 (13.14) 2.82

(3 623 938) (14 585) (3 638 523)

736 627 – 736 627

17.

Diluted(loss)/earnings per share and diluted headline (loss)/earnings per share
17.1 Diluted (loss)/earnings per share – cents The calculation of diluted loss/(earnings) per ordinary share is based on: • diluted weighted average of 27 706 457 (2008: 26 689 194) shares outstanding during the year; and • diluted net loss attributable to ordinary shareholders of R5 614 572 (2008: profit of R736 627). The weighted average number of shares has been adjusted by the following to arrive at the diluted number of shares Weighted average number of shares Effect of future equity-settled share-based payment transactions Diluted weighted average number of shares (Loss)/profit used to calculate diluted (loss)/earnings per share is reconciled as follows Net (loss)/profit attributable to ordinary shareholders After-tax effect of future equity-settled share-based payment transactions Diluted net (loss)/profit attributable to ordinary shareholders (20.26) 2.76

27 581 457 125 000 27 706 457 (3 623 938) (1 990 634) (5 614 572)

26 089 194 600 000 26 689 194 736 627 – 736 627

48

Wits Gold Annual Report 2009

2009 R

2008 R

17.

Diluted(loss)/earnings per share and diluted headline (loss)/earnings per share continued
17.2 Diluted headline (loss)/earnings per share – cents The calculation of diluted headline loss/(earnings) per ordinary share is based on: • diluted weighted average of 27 706 457 (2008: 26 689 194) shares outstanding during the year; and • diluted headline loss attributable to ordinary shareholders of R5 629 157 (2008: profit of R736 627). The diluted (loss)/profit attributable to ordinary shareholders is reconciled to diluted headline (loss)/profit as follows: Diluted net (loss)/profit attributable to ordinary shareholders Profit on disposal of non-current asset Diluted headline (loss)/profit (20.32) 2.76

(5 614 572) (14 585) (5 629 157)

736 627 – 736 627

18. Note to the cash flow statement
18.1 Cash utilised in operating activities (Loss)/profit for year before taxation Adjustments for non-cash items: Depreciation Equity-settled share-based payment Fair value gain on financial asset Profit on disposal of non-current asset Finance income Interest expense (Decrease)/increase in provisions Movements in working capital Increase in trade and other receivables (Decrease)/increase in trade and other payables Cash utilised in operating activities 18.2 Taxation paid Taxation due at the beginning of the year Normal company tax Capital gains tax Secondary taxation on companies Taxation due at end of the year Taxation paid for the year (2 591 959) 441 2 851 (245 (14 (15 411 34 (106 204 506 152) 585) 414) 592 000) 4 609 440 221 545 7 157 787 (14 126 675) – (9 020 296) – 506 000 (10 652 199) (747 757) 4 642 114 (6 757 842) – – 2 079 622 4 322 (2 083 944) –

(15 041 808) (184 005) (119 896) (15 345 709) 2 083 944 1 101 615 2 002 210 – (5 183 447) 4 322

Wits Gold Annual Report 2009

49

2009 R

2008 R

17.

Diluted(loss)/earnings per share and diluted headline (loss)/earnings per share continued
17.2 Diluted headline (loss)/earnings per share – cents The calculation of diluted headline loss/(earnings) per ordinary share is based on: • diluted weighted average of 27 706 457 (2008: 26 689 194) shares outstanding during the year; and • diluted headline loss attributable to ordinary shareholders of R5 629 157 (2008: profit of R736 627). The diluted (loss)/profit attributable to ordinary shareholders is reconciled to diluted headline (loss)/profit as follows: Diluted net (loss)/profit attributable to ordinary shareholders Profit on disposal of non-current asset Diluted headline (loss)/profit (20.32) 2.76

(5 614 572) (14 585) (5 629 157)

736 627 – 736 627

18. Note to the cash flow statement
18.1 Cash utilised in operating activities (Loss)/profit for year before taxation Adjustments for non-cash items: Depreciation Equity-settled share-based payment Fair value gain on financial asset Profit on disposal of non-current asset Finance income Interest expense (Decrease)/increase in provisions Movements in working capital Increase in trade and other receivables (Decrease)/increase in trade and other payables Cash utilised in operating activities 18.2 Taxation paid Taxation due at the beginning of the year Normal company tax Capital gains tax Secondary taxation on companies Taxation due at end of the year Taxation paid for the year (2 591 959) 441 2 851 (245 (14 (15 411 34 (106 204 506 152) 585) 414) 592 000) 4 609 440 221 545 7 157 787 (14 126 675) – (9 020 296) – 506 000 (10 652 199) (747 757) 4 642 114 (6 757 842) – – 2 079 622 4 322 (2 083 944) –

(15 041 808) (184 005) (119 896) (15 345 709) 2 083 944 1 101 615 2 002 210 – (5 183 447) 4 322

Wits Gold Annual Report 2009

49

Notes to the financial statements continued for the year ended 28 February 2009

19. Related party transactions
All identified related parties and any related transactions are discussed below: Operating lease The Company rents office facilities, representing less than 2% of the total building, from The Johannesburg Land Company (Proprietary) Limited in which Mr Adam Fleming, the non-executive chairman of the Company, has an interest. Rental payments in terms of the agreement for the year ended 28 February 2009 were R209 404 (2008: R186 277). The terms of this rental agreement are equivalent to those that prevail in arm’s length transactions. Key management compensation There were no key management personnel other than the directors of the Company. For additional information on directors’ emoluments and shareholding, refer to note 14 and the directors’ report. 2009 R 2008 R

20. Commitments
Operating lease commitments The future operating lease charges for the office premises are: Payable within one year Payable later than one year, but not later than five years 203 907 202 221 406 128 Monthly operating lease charges escalate at a rate of 9% annually and are straight-lined over the period of the lease. Rental of office equipment Payable within one year Payable later than one year, but not later than five years 15 600 53 300 68 900 Department of Minerals and Energy (DME) commitments In terms of the Prospecting Rights granted to the Company by the DME, the Company has committed to spend the following amounts on exploration, over the period to February 2013: Payable within one year Payable later than one year, but not later than five years – – – 187 071 406 128 593 199

9 265 429 16 819 215 26 084 644

10 723 637 44 081 415 54 805 052 135 000

Property commitments Outstanding commitments on land and buildings Investor relations Conferences and consultants Payable within one year Payable later than one year, but not later than five years

–

979 200 3 549 600 4 528 800

153 924 – 153 924 – 11 199 632 44 487 543 55 687 175

Consultants – Other Payable within one year Total commitments payable within one year Total commitments payable later than one year, but not later than five years Total commitments at year end The above commitments will all be funded out of the Company’s existing cash resources.

2 498 907 12 963 043 20 624 336 33 587 379

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Wits Gold Annual Report 2009

Notes to the financial statements continued for the year ended 28 February 2009

19. Related party transactions
All identified related parties and any related transactions are discussed below: Operating lease The Company rents office facilities, representing less than 2% of the total building, from The Johannesburg Land Company (Proprietary) Limited in which Mr Adam Fleming, the non-executive chairman of the Company, has an interest. Rental payments in terms of the agreement for the year ended 28 February 2009 were R209 404 (2008: R186 277). The terms of this rental agreement are equivalent to those that prevail in arm’s length transactions. Key management compensation There were no key management personnel other than the directors of the Company. For additional information on directors’ emoluments and shareholding, refer to note 14 and the directors’ report. 2009 R 2008 R

20. Commitments
Operating lease commitments The future operating lease charges for the office premises are: Payable within one year Payable later than one year, but not later than five years 203 907 202 221 406 128 Monthly operating lease charges escalate at a rate of 9% annually and are straight-lined over the period of the lease. Rental of office equipment Payable within one year Payable later than one year, but not later than five years 15 600 53 300 68 900 Department of Minerals and Energy (DME) commitments In terms of the Prospecting Rights granted to the Company by the DME, the Company has committed to spend the following amounts on exploration, over the period to February 2013: Payable within one year Payable later than one year, but not later than five years – – – 187 071 406 128 593 199

9 265 429 16 819 215 26 084 644

10 723 637 44 081 415 54 805 052 135 000

Property commitments Outstanding commitments on land and buildings Investor relations Conferences and consultants Payable within one year Payable later than one year, but not later than five years

–

979 200 3 549 600 4 528 800

153 924 – 153 924 – 11 199 632 44 487 543 55 687 175

Consultants – Other Payable within one year Total commitments payable within one year Total commitments payable later than one year, but not later than five years Total commitments at year end The above commitments will all be funded out of the Company’s existing cash resources.

2 498 907 12 963 043 20 624 336 33 587 379

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Wits Gold Annual Report 2009

21. Financial risk management
Overview The Company has limited exposure to credit, liquidity and market risks from its use of financial instruments. This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring and managing risk, and the Company’s management of capital. Further quantitative disclosures are included throughout these financial statements. The board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The board has established the audit and risk management committee, which is responsible for developing and monitoring the Company’s risk management policies. The committee reports regularly to the board of directors on its activities. The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. The Company’s audit and risk management committee oversees how management monitors compliance with the Company’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. Credit risk Credit risk represents the risk of financial loss due to a counter party to a financial instrument not discharging its obligation. • Investments This risk arises from the Company’s investing activities and is limited by investing in entities with at least an “A” credit rating and in liquid securities only. At the year end the Company had R117 million (2008: R136 million) invested with ABSA Bank Limited. • Other receivables The Company has other receivables amounting to R1 508 824 of which R1 284 953 relates to SARS VAT receivable. Due to the nature of the Company’s other receivables, there is no associated exposure to credit risk. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company is not exposed to any debt financing, however, it monitors its risk of a shortage of funds using in-house budgeting and forecasting tools. The Company’s objective is to maintain a balance between its capital raising, and operating and exploration funding requirements. The exploration of the Company’s Prospecting Rights is dependent upon the Company’s ability to obtain additional financing through joint venturing of projects, debt financing, equity financing or other means. The Company’s financial liabilities comprise mainly trade and other payables. The main purpose of these financial liabilities is to facilitate the day to day management of the Company’s operations. To ensure adequate liquidity, the Company maintains its cash balances on daily call accounts. Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk. – Currency risk The Company was exposed to currency risk in the prior year in relation to its financial asset. During the current year, this risk has been eliminated due to the financial asset having been settled in full. – Interest rate risk The Company is exposed to interest rate risk on its cash balances. Surplus cash is placed on call with financial institutions and management actively negotiates favourable market related interest rates. – Equity price risk The Company does not hold any investments in equity instruments and is thus not exposed to equity price risk.

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21. Financial risk management
Overview The Company has limited exposure to credit, liquidity and market risks from its use of financial instruments. This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring and managing risk, and the Company’s management of capital. Further quantitative disclosures are included throughout these financial statements. The board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The board has established the audit and risk management committee, which is responsible for developing and monitoring the Company’s risk management policies. The committee reports regularly to the board of directors on its activities. The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. The Company’s audit and risk management committee oversees how management monitors compliance with the Company’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. Credit risk Credit risk represents the risk of financial loss due to a counter party to a financial instrument not discharging its obligation. • Investments This risk arises from the Company’s investing activities and is limited by investing in entities with at least an “A” credit rating and in liquid securities only. At the year end the Company had R117 million (2008: R136 million) invested with ABSA Bank Limited. • Other receivables The Company has other receivables amounting to R1 508 824 of which R1 284 953 relates to SARS VAT receivable. Due to the nature of the Company’s other receivables, there is no associated exposure to credit risk. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company is not exposed to any debt financing, however, it monitors its risk of a shortage of funds using in-house budgeting and forecasting tools. The Company’s objective is to maintain a balance between its capital raising, and operating and exploration funding requirements. The exploration of the Company’s Prospecting Rights is dependent upon the Company’s ability to obtain additional financing through joint venturing of projects, debt financing, equity financing or other means. The Company’s financial liabilities comprise mainly trade and other payables. The main purpose of these financial liabilities is to facilitate the day to day management of the Company’s operations. To ensure adequate liquidity, the Company maintains its cash balances on daily call accounts. Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk. – Currency risk The Company was exposed to currency risk in the prior year in relation to its financial asset. During the current year, this risk has been eliminated due to the financial asset having been settled in full. – Interest rate risk The Company is exposed to interest rate risk on its cash balances. Surplus cash is placed on call with financial institutions and management actively negotiates favourable market related interest rates. – Equity price risk The Company does not hold any investments in equity instruments and is thus not exposed to equity price risk.

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51

Notes to the financial statements continued for the year ended 28 February 2009

21. Financial risk management continued
Capital management The board’s policy is to maintain an adequate capital base (cash on hand) to maintain investor, creditor and market confidence and to sustain future development of the business. The Company’s objective is to maintain a balance between its capital raising, and operating and exploration expenditure by regularly forecasting future cash requirements. There were no changes in the Company’s approach to capital management during the year. The Company is subject to externally imposed capital requirements in terms of complying with the conditions under which its Prospecting Rights have been granted. The Prospecting Rights have been granted by the Department of Minerals and Energy (DME). To date the Company has complied with these commitments to the DME. For additional information regarding these commitments, refer to note 20. Overall risk From the above, the Company does not have any significant risks in respect of liquidity risk, currency risk, and equity price risk. As a result of this no sensitivity and maturity analysis has been disclosed due to the Company’s limited exposure to these risks. A sensitivity analysis has been performed only on the interest rate risk. Fair values Set out below is a comparison by class of carrying amounts and fair values of all the Company’s financial instruments that are carried in the financial statements: Carrying amount 2009 2008 R R Financial assets Fair value through profit and loss Financial asset Amortised cost Other receivables Cash and cash equivalents Financial liabilities Amortised cost Trade and other payables Fair value 2009 R 2008 R

– 1 508 824 117 063 136

14 053 848 1 324 819 136 068 070

– 1 508 824 117 063 136

14 053 848 1 324 819 136 068 070

6 740 930

6 860 826

6 740 930

6 860 826

Sensitivity analysis A ten percent increase/(decrease) in the interest rate received would result in an adjustment to profit/(loss) of R1.6 million/ (R1.5 million) before tax. This analysis assumes that all other variables remain constant.

22. Acquisition of Prospecting Rights
The Company previously acquired ‘old order’ Mineral Rights at a value of R14 million from AngloGold Ashanti Limited, Gold Fields Limited and ARMGold-Harmony Freegold Joint Venture Company (Proprietary) Limited. In terms of the acquisition agreements, should the Company proceed with the construction of a mine on the land to which these Prospecting Rights attach, then the respective seller of those Prospecting Rights has an option to participate up to a 40% beneficial interest in that mine. Should the Company sell a project at a market related price, the original owner will be entitled to receive 50% of the proceeds less a three time multiple of historical exploration expenditure. All options included in the agreements to acquire the exploration and evaluation assets are treated as financial liabilities which are recorded at fair value and re-measured at each reporting date. As the Company is still in the exploration stage and as of the balance sheet date, a significant amount of drilling and exploration work has not been performed that would lead to the change in classification from Inferred Resources to Indicated Resources, the value of the options is nominal and no amounts have been recorded.

52

Wits Gold Annual Report 2009

Notes to the financial statements continued for the year ended 28 February 2009

21. Financial risk management continued
Capital management The board’s policy is to maintain an adequate capital base (cash on hand) to maintain investor, creditor and market confidence and to sustain future development of the business. The Company’s objective is to maintain a balance between its capital raising, and operating and exploration expenditure by regularly forecasting future cash requirements. There were no changes in the Company’s approach to capital management during the year. The Company is subject to externally imposed capital requirements in terms of complying with the conditions under which its Prospecting Rights have been granted. The Prospecting Rights have been granted by the Department of Minerals and Energy (DME). To date the Company has complied with these commitments to the DME. For additional information regarding these commitments, refer to note 20. Overall risk From the above, the Company does not have any significant risks in respect of liquidity risk, currency risk, and equity price risk. As a result of this no sensitivity and maturity analysis has been disclosed due to the Company’s limited exposure to these risks. A sensitivity analysis has been performed only on the interest rate risk. Fair values Set out below is a comparison by class of carrying amounts and fair values of all the Company’s financial instruments that are carried in the financial statements: Carrying amount 2009 2008 R R Financial assets Fair value through profit and loss Financial asset Amortised cost Other receivables Cash and cash equivalents Financial liabilities Amortised cost Trade and other payables Fair value 2009 R 2008 R

– 1 508 824 117 063 136

14 053 848 1 324 819 136 068 070

– 1 508 824 117 063 136

14 053 848 1 324 819 136 068 070

6 740 930

6 860 826

6 740 930

6 860 826

Sensitivity analysis A ten percent increase/(decrease) in the interest rate received would result in an adjustment to profit/(loss) of R1.6 million/ (R1.5 million) before tax. This analysis assumes that all other variables remain constant.

22. Acquisition of Prospecting Rights
The Company previously acquired ‘old order’ Mineral Rights at a value of R14 million from AngloGold Ashanti Limited, Gold Fields Limited and ARMGold-Harmony Freegold Joint Venture Company (Proprietary) Limited. In terms of the acquisition agreements, should the Company proceed with the construction of a mine on the land to which these Prospecting Rights attach, then the respective seller of those Prospecting Rights has an option to participate up to a 40% beneficial interest in that mine. Should the Company sell a project at a market related price, the original owner will be entitled to receive 50% of the proceeds less a three time multiple of historical exploration expenditure. All options included in the agreements to acquire the exploration and evaluation assets are treated as financial liabilities which are recorded at fair value and re-measured at each reporting date. As the Company is still in the exploration stage and as of the balance sheet date, a significant amount of drilling and exploration work has not been performed that would lead to the change in classification from Inferred Resources to Indicated Resources, the value of the options is nominal and no amounts have been recorded.

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Wits Gold Annual Report 2009

22. Acquisition of Prospecting Rights continued
Rights of third parties relating to unused old order Mineral Rights Certain of the Company’s acquired unused old order Mineral Rights were subject to Participation Rights and royalties in favour of third parties. Since these unused old order Miniral Rights have been converted into new order Prospecting Rights in terms of the Minerals and Petroleum Resources Development Act (MPRDA) and the Royalty Bill, there is uncertainty as to the legal status of these third party rights. In terms of the agreements with the sellers of these unused old order Mineral Rights, should the Company proceed with a mine, then the Company and the seller may suffer proportionate dilution of their respective interests to accommodate the rights of the holders of the Participation Rights and royalties. The option of royalty payments only applies to a portion of the old order Mineral Rights acquired from AngloGold Ashanti Limited, which had an agreement with Anglo Operations Limited. Pursuant to this agreement Anglo Operations Limited had an option to elect to receive a royalty of 20 percent of AngloGold Ashanti’s pre-tax profits or a 15 percent Subscription Right in a mine developed over these minerals. Should the above participation and royalty rights be valid in terms of the new legislation, and should the third parties elect to subscribe for their shares, the Company’s interest in these mineral properties may be diluted accordingly.

23. Equity-settled share-based payment
23.1 Share options granted for advisory services received The Company has entered into an agreement whereby Fleming Family & Partners Advisory Limited (FF&P) and JP Morgan Equities Limited (JP Morgan) were engaged to act as financial and corporate advisor and global coordinator/transactional sponsor respectively, to the Company in relation to the listing of the Company’s shares on the JSE Limited stock exchange, a capital raising and secondary listing on a North American stock exchange in calendar year 2007. In terms of the agreements: FF&P was granted, subject to the JSE Limited’s Listings Requirements, the following options to acquire shares: – 500 000 shares at R6.37 per share on the successful completion of a listing of the Company’s shares on the JSE Limited. This option can be exercised at any time within two years after the date of the successful listing of the Company. However, in accordance with section 5.127 of the Listings Requirements, these shares may not be disposed of prior to 24 April 2008. This clause has been waived by the JSE Limited. Should FF&P realise an excess greater than US$4.5 million on the sale of the shares, 50% of the excess will be payable to the Company. In April 2008, FF&P exercised these options and disposed of the underlying shares. This transaction resulted in the Company receiving R3 185 000 in connection with the exercise price of these options and a further R14 299 000 in respect of certain rights granted to the Company under its agreement with FF&P. – 200 000 shares at R31.85 per share on the earlier of the successful completion of a secondary listing on a North American stock exchange and a capital raising transaction in calendar year 2007, or 31 December 2007. This option can be exercised at any time within two years commencing on the earlier of the completion of a capital raising transaction and secondary listing in 2007 or 31 December 2007. However, in accordance with section 5.127 of the Listings Requirements these shares may not be disposed of prior to 24 April 2008. This clause has been waived by the JSE Limited. Should FF&P realise an excess greater than US$3 million on the sale of the shares, 50% of the excess will be payable to the Company. In December 2007 FF&P exercised 100 000 of these 200 000 options. In terms of this sale the Company received R3 185 000 in connection with the exercise price of these options and no excess accrued to the Company in respect of certain rights granted to the Company under its agreement with FF&P upon selling the underlying shares to a third party. In April 2008, FF&P exercised the remainder of these options and disposed of the underlying shares. This transaction resulted in the Company receiving R3 185 000 in connection with the exercise price of these options and no excess accrued to the Company in respect of its rights granted under the agreement with FF&P; and

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22. Acquisition of Prospecting Rights continued
Rights of third parties relating to unused old order Mineral Rights Certain of the Company’s acquired unused old order Mineral Rights were subject to Participation Rights and royalties in favour of third parties. Since these unused old order Miniral Rights have been converted into new order Prospecting Rights in terms of the Minerals and Petroleum Resources Development Act (MPRDA) and the Royalty Bill, there is uncertainty as to the legal status of these third party rights. In terms of the agreements with the sellers of these unused old order Mineral Rights, should the Company proceed with a mine, then the Company and the seller may suffer proportionate dilution of their respective interests to accommodate the rights of the holders of the Participation Rights and royalties. The option of royalty payments only applies to a portion of the old order Mineral Rights acquired from AngloGold Ashanti Limited, which had an agreement with Anglo Operations Limited. Pursuant to this agreement Anglo Operations Limited had an option to elect to receive a royalty of 20 percent of AngloGold Ashanti’s pre-tax profits or a 15 percent Subscription Right in a mine developed over these minerals. Should the above participation and royalty rights be valid in terms of the new legislation, and should the third parties elect to subscribe for their shares, the Company’s interest in these mineral properties may be diluted accordingly.

23. Equity-settled share-based payment
23.1 Share options granted for advisory services received The Company has entered into an agreement whereby Fleming Family & Partners Advisory Limited (FF&P) and JP Morgan Equities Limited (JP Morgan) were engaged to act as financial and corporate advisor and global coordinator/transactional sponsor respectively, to the Company in relation to the listing of the Company’s shares on the JSE Limited stock exchange, a capital raising and secondary listing on a North American stock exchange in calendar year 2007. In terms of the agreements: FF&P was granted, subject to the JSE Limited’s Listings Requirements, the following options to acquire shares: – 500 000 shares at R6.37 per share on the successful completion of a listing of the Company’s shares on the JSE Limited. This option can be exercised at any time within two years after the date of the successful listing of the Company. However, in accordance with section 5.127 of the Listings Requirements, these shares may not be disposed of prior to 24 April 2008. This clause has been waived by the JSE Limited. Should FF&P realise an excess greater than US$4.5 million on the sale of the shares, 50% of the excess will be payable to the Company. In April 2008, FF&P exercised these options and disposed of the underlying shares. This transaction resulted in the Company receiving R3 185 000 in connection with the exercise price of these options and a further R14 299 000 in respect of certain rights granted to the Company under its agreement with FF&P. – 200 000 shares at R31.85 per share on the earlier of the successful completion of a secondary listing on a North American stock exchange and a capital raising transaction in calendar year 2007, or 31 December 2007. This option can be exercised at any time within two years commencing on the earlier of the completion of a capital raising transaction and secondary listing in 2007 or 31 December 2007. However, in accordance with section 5.127 of the Listings Requirements these shares may not be disposed of prior to 24 April 2008. This clause has been waived by the JSE Limited. Should FF&P realise an excess greater than US$3 million on the sale of the shares, 50% of the excess will be payable to the Company. In December 2007 FF&P exercised 100 000 of these 200 000 options. In terms of this sale the Company received R3 185 000 in connection with the exercise price of these options and no excess accrued to the Company in respect of certain rights granted to the Company under its agreement with FF&P upon selling the underlying shares to a third party. In April 2008, FF&P exercised the remainder of these options and disposed of the underlying shares. This transaction resulted in the Company receiving R3 185 000 in connection with the exercise price of these options and no excess accrued to the Company in respect of its rights granted under the agreement with FF&P; and

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53

Notes to the financial statements continued for the year ended 28 February 2009

23. Equity-settled share-based payment continued
23.1 Share options granted for advisory services received continued JP Morgan was granted, subject to the JSE Limited’s Listings Requirements, the following options to acquire shares: – 500 000 shares at R6.37 per share on the successful completion of a listing of the Company’s shares on the JSE Limited. This option can be exercised at any time within twenty seven months after the date of the successful listing of the Company. On 4 April 2007 the Company agreed to extend the exercise period to twenty seven months, previously it was twenty four months. However, in accordance with section 5.127 of the Listings Requirements these shares may not be disposed of prior to 24 April 2008. This clause has been waived by the JSE Limited. Should JP Morgan realise an excess greater than US$4.5 million on the sale of the shares, 50% of the excess will be payable to the Company. In December 2007 JP Morgan exercised all of these options. This resulted in the Company receiving R3 185 000 in connection with the exercise price of these options and a further R14 299 000 in respect of certain rights granted to the Company under its agreement with JP Morgan upon selling the underlying shares to a third party. – 200 000 shares at R31.85 per share on the earlier of the successful completion of a secondary listing on a North American stock exchange and a capital raising transaction in calendar year 2007, or 31 December 2007. This option can be exercised at any time within two years commencing on the earlier of the completion of a capital raising transaction and secondary listing in 2007 or 31 December 2007. However, in accordance with section 5.127 of the Listings Requirements these shares may not be disposed of prior to 24 April 2008. This clause has been waived by the JSE Limited. Should JP Morgan realise an excess greater than US$3 million on the sale of the shares, 50% of the excess will be payable to the Company. In December 2007 JP Morgan exercised all of these options. The terms of this sale the Company received R6 370 000 in connection with the exercise price of these options and no excess accrued to the Company in respect of certain rights granted to the Company under its agreement with JP Morgan upon selling the underlying shares to a third party. Details of the share options outstanding during the year are as follows: 28 February 2009 Weighted Number of average share options exercise price R Outstanding at the beginning of the year Exercised during the year Outstanding at the end of the year 600 000 (600 000) – 10.62 (10.62) 29 February 2008 Weighted Number of average share options exercise price R 1 400 000 (800 000) 600 000 13.65 (15.93)

The Company recognised a total expense of R nil (2008: R2 148 600) related to these equity-settled share-based payment transactions, refer to notes 11 and 14. The fair value of these services amounting to R8 million is based on an estimation of the amount of work undertaken during the respective financial years and at market values of similar services and is recognised over a period of 33 months (2008: 33 months) for JP Morgan and 39 months (2008: 39 months) for FF&P.

54

Wits Gold Annual Report 2009

Notes to the financial statements continued for the year ended 28 February 2009

23. Equity-settled share-based payment continued
23.1 Share options granted for advisory services received continued JP Morgan was granted, subject to the JSE Limited’s Listings Requirements, the following options to acquire shares: – 500 000 shares at R6.37 per share on the successful completion of a listing of the Company’s shares on the JSE Limited. This option can be exercised at any time within twenty seven months after the date of the successful listing of the Company. On 4 April 2007 the Company agreed to extend the exercise period to twenty seven months, previously it was twenty four months. However, in accordance with section 5.127 of the Listings Requirements these shares may not be disposed of prior to 24 April 2008. This clause has been waived by the JSE Limited. Should JP Morgan realise an excess greater than US$4.5 million on the sale of the shares, 50% of the excess will be payable to the Company. In December 2007 JP Morgan exercised all of these options. This resulted in the Company receiving R3 185 000 in connection with the exercise price of these options and a further R14 299 000 in respect of certain rights granted to the Company under its agreement with JP Morgan upon selling the underlying shares to a third party. – 200 000 shares at R31.85 per share on the earlier of the successful completion of a secondary listing on a North American stock exchange and a capital raising transaction in calendar year 2007, or 31 December 2007. This option can be exercised at any time within two years commencing on the earlier of the completion of a capital raising transaction and secondary listing in 2007 or 31 December 2007. However, in accordance with section 5.127 of the Listings Requirements these shares may not be disposed of prior to 24 April 2008. This clause has been waived by the JSE Limited. Should JP Morgan realise an excess greater than US$3 million on the sale of the shares, 50% of the excess will be payable to the Company. In December 2007 JP Morgan exercised all of these options. The terms of this sale the Company received R6 370 000 in connection with the exercise price of these options and no excess accrued to the Company in respect of certain rights granted to the Company under its agreement with JP Morgan upon selling the underlying shares to a third party. Details of the share options outstanding during the year are as follows: 28 February 2009 Weighted Number of average share options exercise price R Outstanding at the beginning of the year Exercised during the year Outstanding at the end of the year 600 000 (600 000) – 10.62 (10.62) 29 February 2008 Weighted Number of average share options exercise price R 1 400 000 (800 000) 600 000 13.65 (15.93)

The Company recognised a total expense of R nil (2008: R2 148 600) related to these equity-settled share-based payment transactions, refer to notes 11 and 14. The fair value of these services amounting to R8 million is based on an estimation of the amount of work undertaken during the respective financial years and at market values of similar services and is recognised over a period of 33 months (2008: 33 months) for JP Morgan and 39 months (2008: 39 months) for FF&P.

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Wits Gold Annual Report 2009

23. Equity-settled share-based payment continued
23.2 Shares allocated to employee for services received During the year, 4 841 (2008: 69 429) shares were reserved for participants in terms of the Company’s share incentive scheme, refer to note 10. These shares will vest proportionately on an annual basis, over the period to 28 February 2010. 25 000 shares outside of the scheme mentioned above were reserved for an employee at the end of May 2006 and they will vest equally on an annual basis, over the three years ending 31 May 2009. The fair value of these services is measured on grant date, based on the difference between the fair value of the shares allocated and any amount the employee pays for the shares. The expense is recognised in the income statement as an employee expense over any vesting period, and a corresponding amount is credited to an equity-settled share-based payment reserve, which forms part of the Company’s equity. The Company recognised a total expense of R2 690 068 (2008: R5 009 187) related to these equity-settled share-based payment transactions, refer to notes 11 and 14.

24. Segmental information
The Company operates in the exploration sector which is deemed to be its only business segment. The Company operates in only one geographical segment within South Africa. Thus no segmental report has been prepared.

25. Events after the balance sheet date
No material events have occurred between the balance sheet date and approval of these financial statements.

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23. Equity-settled share-based payment continued
23.2 Shares allocated to employee for services received During the year, 4 841 (2008: 69 429) shares were reserved for participants in terms of the Company’s share incentive scheme, refer to note 10. These shares will vest proportionately on an annual basis, over the period to 28 February 2010. 25 000 shares outside of the scheme mentioned above were reserved for an employee at the end of May 2006 and they will vest equally on an annual basis, over the three years ending 31 May 2009. The fair value of these services is measured on grant date, based on the difference between the fair value of the shares allocated and any amount the employee pays for the shares. The expense is recognised in the income statement as an employee expense over any vesting period, and a corresponding amount is credited to an equity-settled share-based payment reserve, which forms part of the Company’s equity. The Company recognised a total expense of R2 690 068 (2008: R5 009 187) related to these equity-settled share-based payment transactions, refer to notes 11 and 14.

24. Segmental information
The Company operates in the exploration sector which is deemed to be its only business segment. The Company operates in only one geographical segment within South Africa. Thus no segmental report has been prepared.

25. Events after the balance sheet date
No material events have occurred between the balance sheet date and approval of these financial statements.

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Shareholder information as at 28 February 2009
Range of shareholding 1 - 1000 1001-10000 10001-100000 100001-1000000 1000001 shares and over Number of shareholders 288 80 80 27 5 480 % of total shareholders 60.0 16.7 16.7 5.6 1.0 100.0 Number of shares held 171 323 2 308 8 204 16 882 270 498 653 647 848 % of issued capital 0.61 1.16 8.28 29.42 60.53 100.00

27 890 916

Public/Non-public shareholders
Non-public shareholders Directors 10%+ holdings Public shareholders 8 6 2 472 480 1.67 1.25 0.42 98.33 100.00 13 968 410 4 322 347 9 646 063 13 922 506 27 890 916 50.08 15.50 34.58 49.92 100.00

Share price performance
Opening price 01 March 2008 Closing price 27 February 2009 High for the period Low for the period Number of shares in issue Volume traded during period Ratio of volume traded to shares issued *Refer to JSE Limited Securities Exchange News Service (SENS) announcement dated 10 September 2008 R116.00 R44.01 R125.00 R1.05* 27 890 916 1 820 833 6.53%

Shareholder base
3%

Geographic distribution of shares
17% 41% 44%

53% 42%

BEE shareholders, directors & management Institutions & companies Retail shareholders

North America Europe Africa

Shareholder diary
Financial year end 28 February Annual general meeting 24 July Future deadlines for the release of company reports and financial statements (financial year 2010) Interim report Prior to 30 November Annual financial statements Prior to 31 August 2009 2009 2009 2010

56

Wits Gold Annual Report 2009

Shareholder information as at 28 February 2009
Range of shareholding 1 - 1000 1001-10000 10001-100000 100001-1000000 1000001 shares and over Number of shareholders 288 80 80 27 5 480 % of total shareholders 60.0 16.7 16.7 5.6 1.0 100.0 Number of shares held 171 323 2 308 8 204 16 882 270 498 653 647 848 % of issued capital 0.61 1.16 8.28 29.42 60.53 100.00

27 890 916

Public/Non-public shareholders
Non-public shareholders Directors 10%+ holdings Public shareholders 8 6 2 472 480 1.67 1.25 0.42 98.33 100.00 13 968 410 4 322 347 9 646 063 13 922 506 27 890 916 50.08 15.50 34.58 49.92 100.00

Share price performance
Opening price 01 March 2008 Closing price 27 February 2009 High for the period Low for the period Number of shares in issue Volume traded during period Ratio of volume traded to shares issued *Refer to JSE Limited Securities Exchange News Service (SENS) announcement dated 10 September 2008 R116.00 R44.01 R125.00 R1.05* 27 890 916 1 820 833 6.53%

Shareholder base
3%

Geographic distribution of shares
17% 41% 44%

53% 42%

BEE shareholders, directors & management Institutions & companies Retail shareholders

North America Europe Africa

Shareholder diary
Financial year end 28 February Annual general meeting 24 July Future deadlines for the release of company reports and financial statements (financial year 2010) Interim report Prior to 30 November Annual financial statements Prior to 31 August 2009 2009 2009 2010

56

Wits Gold Annual Report 2009

Notice of annual general meeting
Witwatersrand Consolidated Gold Resources Limited
Registration number 2002/031365/06 (the Company)

Notice to members
Notice is hereby given that the 6th annual general meeting of the members of the Company will be held at the Wanderers Club, 21 North Road, Illovo, Johannesburg on 24 July 2009 at 12.00 hours for the following purposes: 1. To receive, consider and adopt the annual financial statements of the Company for the year ended 28 February 2009, including the reports of the directors and auditors. 2. To ratify the re-appointment of KPMG Inc as auditors for the ensuing year and to approve the auditor’s remuneration. 3. To approve the directors’ fees for the year ended 28 February 2009. Ordinary Resolution No 1 “Resolved that Mr Adam Richard Fleming, being a director of the Company retiring by rotation in terms of the Company’s Articles of Association and being eligible has offered himself for re-election, be and is hereby re-appointed as director of the Company. The nominations committee recommends the candidate for re-election”. Ordinary Resolution No 2 “Resolved that Dr Marcus Barrie Watchorn, being a director of the Company retiring by rotation in terms of the Company’s Articles of Association and being eligible has offered himself for re-election, be and is hereby re-appointed as director of the Company. The nominations committee recommends the candidate for re-election”. (A brief curriculum vitae in respect of each director referred to above appears on page 2 and 3 of this annual report.) Ordinary Resolution No 3 “Resolved that the entire authorised but unissued ordinary share capital of the Company, be and is hereby placed under the control of the directors in terms of Section 221 of the Companies Act, Act 61 of 1973, as amended, and to renew the authority of the directors to allot and issue no more than 15% of all the issued shares of the Company on such terms and conditions as they may deem fit, subject to the provisions of the Companies Act, Act 61 of 1973, as amended, and the requirements of the JSE Limited.” Ordinary Resolution No 4 “Resolved that the directors of the Company be authorised by way of a general authority to issue all or any of the shares for cash as they in their discretion deem fit, subject to the Companies Act, Act 61 of 1973, as amended, the Articles, the Listings Requirements of the JSE Limited (the Listings Requirements) and the following limitations, namely that: • this authority shall be valid until the Company’s next annual general meeting or for 15 (fifteen) months from the date of this resolution, whichever period is shorter; • the shares which are the subject of the issue must be of a class already in issue, or where this is not the case, must be limited to such securities or rights that are convertible into a class of shares already in issue; • the shares must be issued to public shareholders and not related parties (as those terms are defined in the Listings Requirements); • the shares which are the subject of the issue may not exceed 15% in the aggregate in any one financial year of the number of shares of that class in issue; • the maximum discount at which the shares may be issued is 10% of the weighted average traded price of the Company’s ordinary shares measured over 30 (thirty) business days prior to the date that the price of the issue is determined or agreed by the directors of the Company; and • announcements being published in accordance with the provisions of paragraph 11.22 of the Listings Requirements.” Approval for this ordinary resolution is obtained by achieving a 75% majority of the votes cast in favour of this resolution at the annual general meeting by all members present or represented by proxy.

Wits Gold Annual Report 2009

57

Notice of annual general meeting
Witwatersrand Consolidated Gold Resources Limited
Registration number 2002/031365/06 (the Company)

Notice to members
Notice is hereby given that the 6th annual general meeting of the members of the Company will be held at the Wanderers Club, 21 North Road, Illovo, Johannesburg on 24 July 2009 at 12.00 hours for the following purposes: 1. To receive, consider and adopt the annual financial statements of the Company for the year ended 28 February 2009, including the reports of the directors and auditors. 2. To ratify the re-appointment of KPMG Inc as auditors for the ensuing year and to approve the auditor’s remuneration. 3. To approve the directors’ fees for the year ended 28 February 2009. Ordinary Resolution No 1 “Resolved that Mr Adam Richard Fleming, being a director of the Company retiring by rotation in terms of the Company’s Articles of Association and being eligible has offered himself for re-election, be and is hereby re-appointed as director of the Company. The nominations committee recommends the candidate for re-election”. Ordinary Resolution No 2 “Resolved that Dr Marcus Barrie Watchorn, being a director of the Company retiring by rotation in terms of the Company’s Articles of Association and being eligible has offered himself for re-election, be and is hereby re-appointed as director of the Company. The nominations committee recommends the candidate for re-election”. (A brief curriculum vitae in respect of each director referred to above appears on page 2 and 3 of this annual report.) Ordinary Resolution No 3 “Resolved that the entire authorised but unissued ordinary share capital of the Company, be and is hereby placed under the control of the directors in terms of Section 221 of the Companies Act, Act 61 of 1973, as amended, and to renew the authority of the directors to allot and issue no more than 15% of all the issued shares of the Company on such terms and conditions as they may deem fit, subject to the provisions of the Companies Act, Act 61 of 1973, as amended, and the requirements of the JSE Limited.” Ordinary Resolution No 4 “Resolved that the directors of the Company be authorised by way of a general authority to issue all or any of the shares for cash as they in their discretion deem fit, subject to the Companies Act, Act 61 of 1973, as amended, the Articles, the Listings Requirements of the JSE Limited (the Listings Requirements) and the following limitations, namely that: • this authority shall be valid until the Company’s next annual general meeting or for 15 (fifteen) months from the date of this resolution, whichever period is shorter; • the shares which are the subject of the issue must be of a class already in issue, or where this is not the case, must be limited to such securities or rights that are convertible into a class of shares already in issue; • the shares must be issued to public shareholders and not related parties (as those terms are defined in the Listings Requirements); • the shares which are the subject of the issue may not exceed 15% in the aggregate in any one financial year of the number of shares of that class in issue; • the maximum discount at which the shares may be issued is 10% of the weighted average traded price of the Company’s ordinary shares measured over 30 (thirty) business days prior to the date that the price of the issue is determined or agreed by the directors of the Company; and • announcements being published in accordance with the provisions of paragraph 11.22 of the Listings Requirements.” Approval for this ordinary resolution is obtained by achieving a 75% majority of the votes cast in favour of this resolution at the annual general meeting by all members present or represented by proxy.

Wits Gold Annual Report 2009

57

Notice of annual general meeting continued

Voting and Proxies
On a show of hands every member present in person or represented in terms of section 188 of the Companies Act shall have one vote and on a poll every member present in person or by proxy or so represented shall have one vote for every share held by such member. Each ordinary shareholder entitled to attend and vote at the above meeting is entitled to appoint a proxy (who need not be a member of the Company) to attend, speak and vote in his stead. Proxy forms, in the form attached to this notice, must be received at the registered office of the Company not later than 12.00 hours on 22 July 2009. If a shareholder holds certificated shares or is registered as an own name dematerialised shareholder, then: • he may attend and vote at the annual general meeting; alternatively • he may appoint a proxy to represent him at the annual general meeting by completing the attached form of proxy and returning it to the registered office of the Company to be received by no later than 48 hours prior to the time appointed for the holding of the meeting (excluding Saturdays, Sundays and public holidays). If a shareholder owns dematerialised shares and is not registered as an own name dematerialised shareholder, then subject to the mandate between himself and his Central Security Depository Participant (CSDP) or broker : • if he wishes to attend the annual general meeting he must contact his CSDP or broker, as the case may be, and obtain the relevant letter of representation from it; alternatively • if he is unable to attend the annual general meeting but wishes to be represented at the meeting, he must contact his CSDP or broker, as the case may be, and furnish it with his voting instructions in respect of the annual general meeting. He must not complete the attached proxy form. The instructions must be provided in accordance with the mandate between himself and his CSDP or broker, as the case may be, within the time period required by his CSDP or broker, as the case may be. In terms of the Listings Requirements of the JSE Limited, the Company’s ordinary shares held in the Wits Gold share incentive scheme will not have their votes at the annual general meeting taken into account for resolution approval purposes. By order of the board of directors

Brian Dowden Company secretary 7 Pam Road Morningside 2057 South Africa Date

58

Wits Gold Annual Report 2009

Notice of annual general meeting continued

Voting and Proxies
On a show of hands every member present in person or represented in terms of section 188 of the Companies Act shall have one vote and on a poll every member present in person or by proxy or so represented shall have one vote for every share held by such member. Each ordinary shareholder entitled to attend and vote at the above meeting is entitled to appoint a proxy (who need not be a member of the Company) to attend, speak and vote in his stead. Proxy forms, in the form attached to this notice, must be received at the registered office of the Company not later than 12.00 hours on 22 July 2009. If a shareholder holds certificated shares or is registered as an own name dematerialised shareholder, then: • he may attend and vote at the annual general meeting; alternatively • he may appoint a proxy to represent him at the annual general meeting by completing the attached form of proxy and returning it to the registered office of the Company to be received by no later than 48 hours prior to the time appointed for the holding of the meeting (excluding Saturdays, Sundays and public holidays). If a shareholder owns dematerialised shares and is not registered as an own name dematerialised shareholder, then subject to the mandate between himself and his Central Security Depository Participant (CSDP) or broker : • if he wishes to attend the annual general meeting he must contact his CSDP or broker, as the case may be, and obtain the relevant letter of representation from it; alternatively • if he is unable to attend the annual general meeting but wishes to be represented at the meeting, he must contact his CSDP or broker, as the case may be, and furnish it with his voting instructions in respect of the annual general meeting. He must not complete the attached proxy form. The instructions must be provided in accordance with the mandate between himself and his CSDP or broker, as the case may be, within the time period required by his CSDP or broker, as the case may be. In terms of the Listings Requirements of the JSE Limited, the Company’s ordinary shares held in the Wits Gold share incentive scheme will not have their votes at the annual general meeting taken into account for resolution approval purposes. By order of the board of directors

Brian Dowden Company secretary 7 Pam Road Morningside 2057 South Africa Date

58

Wits Gold Annual Report 2009

Form of proxy
Witwatersrand Consolidated Gold Resources Limited (the Company) Proxy/Ballot Form for voting at the 6th Annual General Meeting For use by the holders of the Company’s certificated ordinary shares (certificated shareholders) and/or dematerialised ordinary shares held through a Central Securities Depository Participant (CSDP) or broker who have selected “own name” registration (own name dematerialised shareholders) at the annual general meeting of the Company to be held at 12h00 on 24 July 2009, or at any adjournment thereof if required. Additional forms of proxy are available from the transfer secretaries of the Company. Not for use by holders of the Company’s dematerialised ordinary shares who have not selected “own name” registration. Such shareholders must contact their CSDP or broker timeously if they wish to attend and vote at the annual general meeting and request that they be issued with the necessary authorisation to do so or provide the CSDP or broker timeously with their voting instructions should they not wish to attend the annual general meeting in order for the CSDP or broker to vote in accordance with their instructions at the annual general meeting. I/We (block letters) of being a member of the Company and the holder(s) of appoint (see note 1): 1. 2. 3. 4. the chairman of the general meeting, as my/our proxy to vote for me/us and act on my/our behalf at the annual general meeting which is to be held on 24 July 2009 or at any adjournment thereof, as follows: Ordinary business 1. Receive and adopt annual financial statements 2. To ratify the re-appointment and remuneration of auditors 3. Approval of directors’ fees 4. Ordinary resolution No 1 (re-appointment of director – Mr A R Fleming) 5. Ordinary resolution No 2 (re-appointment of director – Dr M B Watchorn) 6. Ordinary resolution No 3 (general authority for board of directors to issue unissued shares) 7. Ordinary resolution No 4 (general authority for board of directors to issue shares for cash) In favour of Against Abstain ordinary shares in the Company, hereby of of of or failing him/her, or failing him/her, or failing him/her,

Signed this (Signature)

day of

2009

A member entitled to attend and vote at the abovementioned meeting is entitled to appoint one or more proxies (none of whom need be a member of the Company) to attend and speak and vote at the abovementioned general meeting in place of that member and such proxy need not also be a member of the Company.

Wits Gold Annual Report 2009

Form of proxy
Witwatersrand Consolidated Gold Resources Limited (the Company) Proxy/Ballot Form for voting at the 6th Annual General Meeting For use by the holders of the Company’s certificated ordinary shares (certificated shareholders) and/or dematerialised ordinary shares held through a Central Securities Depository Participant (CSDP) or broker who have selected “own name” registration (own name dematerialised shareholders) at the annual general meeting of the Company to be held at 12h00 on 24 July 2009, or at any adjournment thereof if required. Additional forms of proxy are available from the transfer secretaries of the Company. Not for use by holders of the Company’s dematerialised ordinary shares who have not selected “own name” registration. Such shareholders must contact their CSDP or broker timeously if they wish to attend and vote at the annual general meeting and request that they be issued with the necessary authorisation to do so or provide the CSDP or broker timeously with their voting instructions should they not wish to attend the annual general meeting in order for the CSDP or broker to vote in accordance with their instructions at the annual general meeting. I/We (block letters) of being a member of the Company and the holder(s) of appoint (see note 1): 1. 2. 3. 4. the chairman of the general meeting, as my/our proxy to vote for me/us and act on my/our behalf at the annual general meeting which is to be held on 24 July 2009 or at any adjournment thereof, as follows: Ordinary business 1. Receive and adopt annual financial statements 2. To ratify the re-appointment and remuneration of auditors 3. Approval of directors’ fees 4. Ordinary resolution No 1 (re-appointment of director – Mr A R Fleming) 5. Ordinary resolution No 2 (re-appointment of director – Dr M B Watchorn) 6. Ordinary resolution No 3 (general authority for board of directors to issue unissued shares) 7. Ordinary resolution No 4 (general authority for board of directors to issue shares for cash) In favour of Against Abstain ordinary shares in the Company, hereby of of of or failing him/her, or failing him/her, or failing him/her,

Signed this (Signature)

day of

2009

A member entitled to attend and vote at the abovementioned meeting is entitled to appoint one or more proxies (none of whom need be a member of the Company) to attend and speak and vote at the abovementioned general meeting in place of that member and such proxy need not also be a member of the Company.

Wits Gold Annual Report 2009

Notes to the form of proxy
1. A shareholder may insert the name of a proxy or the names of three alternative proxies of the shareholder’s choice in the space/s provided, with or without deleting “the chairman of the general meeting”, but any such deletion must be initialled by the shareholder. The person whose name stands first on the proxy form and who is present at the general meeting will be entitled to act as proxy to the exclusion of those whose names follow. 2. A shareholder’s instructions to the proxy must be indicated by the insertion of a cross in the appropriate box provided. Failure to comply with the above will be deemed to authorise the proxy to vote or to abstain from voting at the general meeting as he deems fit in respect of all the shareholder’s votes exercisable thereat. A shareholder or his proxy is not obliged to use all the votes exercisable by the shareholder or by his proxy, but the total of the votes cast and in respect of which abstention is recorded may not exceed the total of the votes exercisable by the shareholder or by his proxy. 3. Forms of proxy must be lodged with or posted to the Company at the 12th Floor, 70 Fox Street, Johannesburg to reach them not later than 12.00 hours on 22 July 2009. 4. The completion and lodging of this proxy form will not preclude the relevant shareholder from attending the general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms thereof. 5. Documentary evidence establishing the authority of a person signing this proxy form in a representative or other legal capacity must be attached to this proxy form unless previously recorded by the transfer secretaries or waived by the chairman of the general meeting. 6. Any alteration or correction made to this proxy form must be initialled by the signatory/ies.

Wits Gold Annual Report 2009

Notes to the form of proxy
1. A shareholder may insert the name of a proxy or the names of three alternative proxies of the shareholder’s choice in the space/s provided, with or without deleting “the chairman of the general meeting”, but any such deletion must be initialled by the shareholder. The person whose name stands first on the proxy form and who is present at the general meeting will be entitled to act as proxy to the exclusion of those whose names follow. 2. A shareholder’s instructions to the proxy must be indicated by the insertion of a cross in the appropriate box provided. Failure to comply with the above will be deemed to authorise the proxy to vote or to abstain from voting at the general meeting as he deems fit in respect of all the shareholder’s votes exercisable thereat. A shareholder or his proxy is not obliged to use all the votes exercisable by the shareholder or by his proxy, but the total of the votes cast and in respect of which abstention is recorded may not exceed the total of the votes exercisable by the shareholder or by his proxy. 3. Forms of proxy must be lodged with or posted to the Company at the 12th Floor, 70 Fox Street, Johannesburg to reach them not later than 12.00 hours on 22 July 2009. 4. The completion and lodging of this proxy form will not preclude the relevant shareholder from attending the general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms thereof. 5. Documentary evidence establishing the authority of a person signing this proxy form in a representative or other legal capacity must be attached to this proxy form unless previously recorded by the transfer secretaries or waived by the chairman of the general meeting. 6. Any alteration or correction made to this proxy form must be initialled by the signatory/ies.

Wits Gold Annual Report 2009

Administration and contact details
Witwatersrand Consolidated Gold Resources Limited (Incorporated in the Republic of South Africa under the Companies Act No 61 of 1973 (as amended) with registration number 2002/031365/06) Date of incorporation 11 December 2002 Place of incorporation South Africa Registered office 12th floor, 70 Fox Street Johannesburg 2001 Postal address PO Box 61147 Marshalltown 2107 South Africa Telephone and fax numbers Telephone: +27 (11) 832 1749 Fax: +27 (11) 838 3208 E-mail: Chief executive officer: marcw@witsgold.com Investor relations manager: hethenh@witsgold.com Company secretary Mr Brian Dowden 7 Pam Road Morningside Ext 5 Sandton, Johannesburg 2057 PO Box 651129, Benmore 2010 South Africa Auditors KPMG Inc KPMG Crescent 85 Empire Road, Parktown 2193 Private Bag X9, Parkview 2122 South Africa Transfer secretaries JSE Limited: Link Market Services South Africa (Pty) Limited 5th floor, 11 Diagonal Street Johannesburg 2001 PO Box 4844, Johannesburg 2000 South Africa TSX: CIBC Mellon Trust Company 320 Bay Street Toronto Ontario M5H 4A6 PO Box 46205 Postal Station ‘A’ Toronto Ontario M5W 4K9 Canada Sponsor PricewaterhouseCoopers Corporate Finance (Pty) Limited 2 Eglin Road, Sunninghill 2157 Private BagX37, Sunninghill 2157 South Africa American Depositary Receipts (ADR) The Bank of New York Mellon 101 Barclay Street New York NY 10286 USA www.adrbnymellon.com (Share code WIWTY)

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