This overview of Northam's Reserves and Resources is reported in terms of the South African Resource Committee (SAMREC) Code, published under the auspices of the South African Institute of Mining and Metallurgy. 

The definitions and terminology used to present the Resource and Reserve statements for auditing are those reflected and stated in the March 2000 edition of the SAMREC code. 

The Resource and Reserve statements were audited for compliance by the international mining consulting firm of Steffen, Robertson and Kirsten (South Africa) (Pty) Limited in July 2003. 

All Mineral Resource and Mineral Reserve estimates are based on underground operations. The grade refers to three platinum group elements (platinum, palladium and rhodium) and associated gold (3PGE+Au). 

Mineral Resource tonnages and grades are estimated in situ. The most practical mining width was assumed, in conjunction with the 3PGE+Au grade and specific gravity estimates, derived from kriging parameters to estimate tonnage and content. An extensive database containing information pertaining to individual samples and their associated analytical information exists from which the data is drawn to derive the kriging parameters. The database consists of approximately 21 500 Merensky reef sample intersections on an average grid size of 12 metres by 12 metres (172 000 individual samples) and 3 600 UG2 reef sample intersections on an average grid size of 11 metres by 11 metres (25 200 individual samples). 

The Merensky reef and the UG2 are well-recognised ore bodies, with lateral continuity well-established across the mine property. The Merensky reef displays a wide range of lateral reef type variations that are interpreted by means of prospect drilling in excess of 1 900 metres per month with an average of 30 reef intersections from the footwall development infrastructure. 

The interpretation of detailed variations on the Merensky reef, on reef development as well as stoping faces are logged by sampling personnel and are mapped geologically on an ongoing basis.

Estimation and Reporting of Mineral Reserves.

• The Measured and Indicated Mineral Resources include Proved and Probable Mineral Reserves.
• All Mineral Reserves are quoted as at 1 July 2003.
• All Mineral Reserves are quoted at a Run-of-Mine (ROM) grade and tonnages as delivered to the metallurgical processing facilities on site and are therefore fully diluted.

Merensky Reef

The Merensky reef is not a specific delineated reef but rather a zone of mineralisation, which straddles the base of the unconformity at the base of the Merensky Cyclic Unit. The Merensky Cyclic Unit is divided into facies, subfacies and reef types. Two different facies types are recognised at Northam. They are the Normal Merensky Reef Facies and the Regional Pothole Facies. The Regional Pothole is further divided into three different reef types of which the NP2 and P2 are the main sources of ore. The third reef type, FWP2, is not considered to be a primary target due to the undulating nature of the reef. Mining the FWP2 reef results in excessive dilution, which reduces the grade of this reef type to below the pay limit. 

The Measured Resource is an estimate of the in situ tonnage and grade (3PGE+Au) that has been exposed through development and is accessible for exploitation. The Measured Resource increased in 2003 to 2.55 Mt (676 koz) compared with the previous year's estimate of 2.00 Mt (508 koz). This equates to an increase of 27.5%. Factors contributing to this are the accelerated development programme which has allowed access to new ground for mining. In addition, the minimum mining width of the P2 reef on the eastern side of the mine was increased to 140 centimetres, due to the mineralisation model and physical characteristics of the reef in the area. Prospect drilling increased the confidence of the reef type delineation, which allowed for more precise area demarcation and reef type ratio estimates.

UG2 Reef

Mining on the UG2 reef was critically reviewed during the year and an emphasis was placed on the safe extraction of this reef and the prevention of falls of ground. The stoping width was increased to include both the leader stringers that occur above the main member chromitite. This should improve hangingwall conditions and allow for a safer working environment. 

The total resource on the UG2 has therefore increased from 50.37 Mt (8 129 koz) to 63.9 Mt (9 479 koz), which translates to a 26.8% increase. The Measured Resource also increased in 2003 to 2.20 Mt (326 koz) which is an improvement of 8.7% compared with the previous year's estimate of 1.86 Mt (300 koz).

Audited mineral resource and mineral reserve statement
 

Merensky Reef
Mineral Reserve Category						Mineral Resource Category
	Tonnes	MHG*	Metal	Metal			Tonnes	In Situ		Metal	Metal
	Mt	g/t	000kg	000oz			Mt	g/t		000kg	000oz
Proved						Measured
Northern boundary						Northern boundary
to 13 Level	3.0	6.26	19	604		to 13 Level	2.6	8.24		21	676
Sub total	3.0	6.26	19	604		Sub total	2.6	8.24		21	676
Probable						Indicated
Northern boundary						Northern boundary
to 13 Level	24.2	6.05	146	4 702		to 13 Level	20.6	7.94		163	5 251
Shaft Pillar						Shaft Pillar	1.8	7.29		13	421
13 Level to 18 level						13 Level to 18 level	19.8	7.05		140	4 481
Sub total	24.2	6.05	146	4 702		Sub total	42.2	7.49		316	10 153
Total	27.2	6.07	165	5 306		Total	44.8	7.54		337	10 829
UG2 Reef
Mineral Reserve Category						Mineral Resource Category
	Tonnes	MHG*	Metal	Metal			Tonnes	In Situ		Metal	Metal
	Mt	g/t	000kg	000oz			Mt		g/t	000kg	000oz
Proved						Measured
Northern boundary						Northern boundary
to 13 Level	2.4	4.01	10	308		to 13 Level	2.2	4.66		10	326
Sub total	2.4	4.01	10	308		Sub total	2.2	4.66		10	326
Probable						Indicated
Northern boundary						Northern boundary
to 13 Level	44.0	4.01	177	5 680		to 13 Level	40.5	4.66		189	6 007
Shaft Pillar						Shaft Pillar	2.1	4.66		10	310
						13 Level to 18 level	19.1	4.66		89	2 837
Sub total	44.0	4.01	177	5 680		Sub total	61.7	4.66		288	9 154
Total	46.4	4.01	187	5 988		Total	63.9	4.66		298	9 480

* Mill head grade

Northam's resources and reserves statement has been compiled by a professional team comprising:
H C Boshoff - Chief Surveyor registered with PLATO with over 10 years' platinum experience.
J C Roberts MSc - Mineral Resource specialist with 11 years' experience in platinum valuation.
D Smith MSc - Chief Geologist with 7 years' experience in the Bushveld Complex.
R G Viring BSc (Hons) Pr Sci Nat, GDE - Manager, mineral resources with 9 years' Bushveld Complex experience.