18 December 2014 Manager Companies Companies Announcement Officer ASX Limited 20 Bridge Street Sydney NSW 2000 Dear Sir/Madam Orbis Gold Limited ACN 120 212 017 (ASX: OBS) – Target’s Statement in response to takeover bid by SEMAFO Inc. In accordance with Item 14 of Section 633(1) of the Corporations Act 2001 (Cth), attached is a copy of the Target’s Statement of Orbis Gold Limited (Orbis Gold) dated 18 December, 2014 in response to the off-market takeover bid by SEMAFO Inc for all of the ordinary shares in Orbis Gold. Yours sincerely Peter Harding-Smith Company Secretary Target’s Statement This Target’s Statement has been issued by Orbis Gold Limited in response to the takeover bid made by SEMAFO Inc. REJECT SEMAFO’S INADEQUATE O FFER The Directors of Orbis Gold unanimously recommend that you REJECT THE OFFER This is an important document and requires your immediate attention. If you are in any doubt about how to deal with this document, you should consult your financial, legal or other professional adviser immediately. Lead Financial Adviser Strategic Adviser Legal Adviser Important Notices NATURE OF THIS DOCUMENT statement, and you should not place undue Orbis Gold confirms that it is not aware of This Target’s Statement is dated reliance on these statements. any new information or data that materially 18 December 2014 and is given under Forward looking statements in this Target’s affects the information in the original Part 6.5 Division 3 of the Corporations Act Statement reflect views held only as at the market announcement and that all material by Orbis Gold Limited ACN 120 212 017 date of this Target’s Statement. assumptions and technical parameters (Orbis Gold) in response to the Bidder’s underpinning the exploration results in the Statement and Offer dated 1 December 2014 INFORMATION RELATING TO THE announcement continue to apply and have by SEMAFO Inc. (SEMAFO) to acquire all of REPORTING OF EXPLORATION not materially changed. Orbis Gold confirms your Shares in Orbis Gold. RESULTS, MINERAL RESOURCES, that the form and context in which the PRODUCTION TARGETS AND Competent Person’s findings are presented A copy of this Target’s Statement was lodged FORECAST FINANCIAL INFORMATION have not been materially modified from the with ASIC and sent to ASX on 18 December The information in this Target’s Statement that original market announcement. 2014. Neither ASIC, ASX nor any of their relates to the Mineral Resources, Production officers take any responsibility for the content COMPETENT PERSONS STATEMENT Targets and Financial Information derived of this Target’s Statement. The information in this report that relates to from the Production Targets for Orbis Gold’s Exploration Results and Mineral Resources This Target’s Statement and the Bidder’s Natougou Project is extracted from the for the Nabanga Gold Project is based Statement contain important information. Updated Scoping Study for the Natougou on, and fairly represents, information and You should read both documents carefully Project released on the ASX on 14 October supporting documentation prepared by and in their entirety. 2014. Orbis Gold confirms that it is not aware Mr Peter Spiers, a Competent Person who of any new information or data that materially INVESTMENT DECISION is a member of the Australian Institute of affects the information included in the original This Target’s Statement does not take into Mining and Metallurgy. Mr Spiers is a full- market announcement and that all material account the individual investment objectives, time employee of Orbis Gold. Mr Spiers has assumptions and technical parameters financial situation and particular needs of sufficient experience that is relevant to the underpinning the Mineral Resources, each Orbis Gold Shareholder. You may wish style of mineralisation and type of deposit Production Targets and Financial Information to seek independent financial and taxation under consideration and to the activity derived from the Production Target’s in the advice before making a decision as to being undertaken to qualify as a Competent Updated Scoping Study continue to apply whether or not to accept the Offer for your Person as defined in the 2012 Edition of and have not materially changed. Orbis Orbis Gold Shares. the “Australasian Code for Reporting of Gold confirms that the form and context in Exploration Results, Mineral Resources and SHAREHOLDER INFORMATION which the Competent Person’s findings are Ore Reserves”. Mr Spiers consents to the If you have any questions in relation to the presented have not been materially modified inclusion in the report of the matters based Offer, please call Orbis Gold’s information line from the Updated Scoping Study. on this information and in the form and on 1300 868 464 for callers within Australia The information in this Target’s Statement context in which it appears. or on +61 1300 868 464 for callers outside that relates to the Mineral Resources of Orbis Australia. The information line will be open The information in this Target’s Statement Gold’s Nabanga Project is extracted from from Monday to Friday between 8.30am to that relates to the Exploration Results for the announcement “Nabanga Gold Project 5.30pm (Sydney time). the Bantou Project is based on, and fairly – Maiden Resource” released on the ASX represents, information and supporting Announcements relating to the Offer can on 25 September 2012. This information documentation prepared by Mr Peter Spiers, be obtained from Orbis Gold’s website was prepared and first disclosed under the a Competent Person who is a member of the www.orbisgold.com. JORC Code 2004. It has not been updated Australian Institute of Mining and Metallurgy. since to comply with the JORC Code 2012 INTERPRETATION Mr Spiers is a full-time employee of Orbis on the basis that the information has not Terms used in this Target’s Statement are Gold. Mr Spiers has sufficient experience materially changed since it was last reported. defined in Section 14 of this document. that is relevant to the style of mineralisation Orbis Gold confirms that it is not aware of and type of deposit under consideration and FORWARD LOOKING STATEMENTS any new information or data that materially to the activity being undertaken to qualify This Target’s Statement contains certain affects the information included in the original as a Competent Person as defined in the forward looking statements and statements market announcement and that all material 2012 Edition of the “Australasian Code for of current intention. Such statements are assumptions and technical parameters Reporting of Exploration Results, Mineral only predictions and are subject to inherent underpinning the Mineral Resources in the Resources and Ore Reserves”. Mr Spiers risks and uncertainties. Those risks and announcement continue to apply and have consents to the inclusion in the report of the uncertainties include factors and risks specific not materially changed. Orbis Gold confirms matters based on this information and in the to the industry in which Orbis Gold is involved that the form and context in which the form and context in which it appears. as well as general economic conditions and Competent Person’s findings are presented conditions in the financial markets. Actual have not been materially modified from the INFORMATION ABOUT SEMAFO IN events or results may differ materially from original market announcement. THIS TARGET’S STATEMENT the events or results expressed or implied Except where disclosed in this Target’s The information in this Target’s Statement in any forward looking statement and Statement, the information about SEMAFO that relates to the Exploration results for such deviations are both normal and to be contained in this Target’s Statement the Bantou Project is extracted from the expected. None of Orbis Gold, any of its has been prepared by Orbis Gold using announcement “Drill Assay Results – Bantou officers, or any person named in this Target’s publicly available information including the Gold Prospect” released on the ASX on Statement with their consent or any person Bidder’s Statement, which has not been 22 December 2010, Quarterly Activities involved in the preparation of this Target’s independently verified. Accordingly, except to Reports dated 31 October 2013 and 30 April Statement makes any representation or the extent required by law, Orbis Gold does 2014, and ASX Announcements released warranty (either express or implied) as to the not assume responsibility for the accuracy or on 29 January 2014, 17 February 2014, 30 accuracy or likelihood in any forward looking completeness of such information. April 2014, 9 May 2014 and 30 July 2014. Orbis Gold Limited | Target’s Statement 1 Table of Contents 1. Key Reasons to Reject the Offer 8 2. Responses to Misleading Statements Made by SEMAFO 18 3. Frequently Asked Questions about the Offer 20 4. Director’s Recommendation 24 5. Key Terms of SEMAFO’s Offer 27 6. Profile of Orbis Gold 32 7. Risk Factors 43 8. About SEMAFO and its Intentions 49 9. SEMAFO’s Offer 51 10. Interests of Orbis Gold Directors 54 11. Other Material Information 56 12. Additional Information 62 13. Consents 65 14. Interpretations 68 Orbis Gold Limited | Target’s Statement 2 3 Reasons REASON 1. REASON 2. REASON 3. to reject THE OFFER OF ORBIS GOLD SEMAFO WANTS $0.65 PER SHARE IS WELL TO EXTRACT the Offer IS INADEQUATE POSITIONED TO VALUE AT DELIVER VALUE YOUR EXPENSE • The Offer does not reflect the full value of the Company. • Orbis Gold has a track record of delivering • Large scale, high grade, open pit gold • The Offer Price is below the Independent on its strategy targeting discovery and deposits such as Natougou are extremely Expert’s range who has declared the Offer development of high grade gold deposits in scarce. The development of the Natougou neither fair nor reasonable. West Africa. Project will drive a market re-rating. SEMAFO intends to capture this value for • The Offer is significantly below the • Natougou is a world-class project, and its own shareholders without paying fair Consensus Risked NAV published by Orbis Gold is well placed to unlock value for this. brokers. significant value over the near term by advancing Natougou towards production. • SEMAFO overemphasises the risks • The Offer was opportunistically timed associated with Orbis Gold in an effort to ahead of the release by Orbis Gold of the • SEMAFO’s Offer fails to recognise the value reduce the perceived value of the Company. significantly improved and exceptionally of Orbis Gold’s other high grade projects, robust Updated Scoping Study for the including the Nabanga Project, and • Orbis Gold has immense strategic value to Natougou Project. extensive portfolio of exploration targets. SEMAFO and other potential acquirers. • Orbis Gold has an experienced Board and • SEMAFO’s Offer is subject to several management team with the capability to Conditions – some of which SEMAFO realise the full potential of the Company’s consider may possibly have been breached, assets. which makes it uncertain whether the Offer will ever become unconditional. • SEMAFO’s Offer has been specifically timed and structured to frustrate the ongoing funding position of the Company in order to prevent it from operating in the normal course of its business. Orbis Gold Limited | Target’s Statement 3 3 Reasons REASON 1. REASON 2. REASON 3. to reject THE OFFER OF ORBIS GOLD SEMAFO WANTS $0.65 PER SHARE IS WELL TO EXTRACT the Offer IS INADEQUATE POSITIONED TO VALUE AT DELIVER VALUE YOUR EXPENSE • The Offer does not reflect the full value of the Company. • Orbis Gold has a track record of delivering • Large scale, high grade, open pit gold • The Offer Price is below the Independent on its strategy targeting discovery and deposits such as Natougou are extremely Expert’s range who has declared the Offer development of high grade gold deposits in scarce. The development of the Natougou neither fair nor reasonable. West Africa. Project will drive a market re-rating. SEMAFO intends to capture this value for • The Offer is significantly below the • Natougou is a world-class project, and its own shareholders without paying fair Consensus Risked NAV published by Orbis Gold is well placed to unlock value for this. brokers. significant value over the near term by advancing Natougou towards production. • SEMAFO overemphasises the risks • The Offer was opportunistically timed associated with Orbis Gold in an effort to ahead of the release by Orbis Gold of the • SEMAFO’s Offer fails to recognise the value reduce the perceived value of the Company. significantly improved and exceptionally of Orbis Gold’s other high grade projects, robust Updated Scoping Study for the including the Nabanga Project, and • Orbis Gold has immense strategic value to Natougou Project. extensive portfolio of exploration targets. SEMAFO and other potential acquirers. • Orbis Gold has an experienced Board and • SEMAFO’s Offer is subject to several management team with the capability to Conditions – some of which SEMAFO realise the full potential of the Company’s consider may possibly have been breached, assets. which makes it uncertain whether the Offer will ever become unconditional. • SEMAFO’s Offer has been specifically timed and structured to frustrate the ongoing funding position of the Company in order to prevent it from operating in the normal course of its business. Orbis Gold Limited | Target’s Statement 4 Chairman’s Letter “Your Board regards the Offer as opportunistic and inadequate given the substantial value to be unlocked by Orbis Gold developing its flagship Natougou Project and other high grade exploration assets which will benefit Orbis Gold Shareholders for many years to come” Dear Orbis Gold Shareholder TAKE NO ACTION AND REJECT SEMAFO’S TAKEOVER OFFER I am writing to you in response to the recent unsolicited, conditional takeover Offer announced by SEMAFO Inc. Your Board has carefully considered the Offer and believes that the Offer Price of $0.65 per Share is inadequate and fails to recognise the inherent value in Orbis Gold’s portfolio of high grade gold projects. Accordingly, your Board unanimously recommends that you REJECT THE OFFER. We urge Orbis Gold Shareholders to retain their shareholding in our Company and not to surrender and transfer the value of that investment to SEMAFO shareholders at a price that does not reflect the future value to be unlocked. In recommending that Shareholders REJECT THE OFFER, the Directors have taken into account the view of an experienced independent expert, Grant Thornton, who has concluded that the offer is neither fair nor reasonable for Orbis Gold Shareholders. Grant Thornton, whose report is appended to this Target’s Statement, has assessed the value of Orbis Gold to be in a range of $0.71 to $1.15 per Share. The Directors also note a number of other factors in making their recommendation: • The Offer has been opportunistically timed and was announced immediately prior to the release by Orbis Gold of an Updated Scoping Study for its Natougou Project. The Updated Scoping Study significantly improved upon the exceptionally robust project economics, and highlighted the significant value to be unlocked over the near term by developing the project. By offering a premium to the price prior to the release of this important positive milestone, SEMAFO is seeking to create an illusion of value and distract Shareholders from understanding the true underlying value of the Company; • The Offer fails to recognise the extremely prospective exploration portfolio of the Company including: the high grade Nabanga Project, for which an internal scoping study is almost finalised; Bantou, Tankoro and other recent discoveries, as well as the potential to significantly extend the existing Natougou Mineral Resource by drilling identified targets; • The Company holds significant strategic value to SEMAFO and other potential bidders. The Offer by SEMAFO has put your Company “in play” and there are other parties which the Company is in discussions with, knowing that the minimum price has been set with the Offer of $0.65 per Share. The Company has not received a firm alternate proposal as at the date of this Target’s Statement, and there is no guarantee that an alternate proposal will arise, but selling your shares now to SEMAFO may impact your Directors’ ability to continue to pursue alternative value enhancing opportunities; Orbis Gold Limited | Target’s Statement 5 • Each of your Directors, and certain Shareholders which in aggregate own or control approximately 45.5% of the Shares outstanding, as at the date of this Target’s Statement, DO NOT INTEND to accept SEMAFO’s Offer at its current price, however reserve the right to accept SEMAFO’s Offer should no superior proposal emerge; and • We are confident in the ability of the management team to implement the existing strategic plan and deliver value for Shareholders over the near term. As an Orbis Gold Shareholder, you have supported the Company as it has progressed through exploration, discovery, and early feasibility study phases. Now that your Company has discovered a world-class deposit at Natougou and has a pipeline of high-potential projects behind it, SEMAFO wants to take advantage of the returns that should be yours to collect. For the reasons outlined above and elsewhere in this Target’s Statement, we recommend that you REJECT THE OFFER. Your Board recommends that you read this Target’s Statement in its entirety and consider the Offer, having regard to your own personal risk profile, investment strategy and tax circumstances. To REJECT THE OFFER you should simply DO NOTHING and take NO ACTION in relation to all documents sent to you by SEMAFO. On behalf of all Directors of Orbis Gold, I thank you for your support to date, allowing the Company to make its important discoveries, and seek your continued support as the Board explores value enhancing options. Yours faithfully John Bovard Chairman Orbis Gold Limited | Target’s Statement 6 Your Directors’ Recommendation After taking account of each of the matters described in this document, in particular the reasons to REJECT the Offer set out in Section 1, each of your Directors recommends that you REJECT SEMAFO’s Offer and TAKE NO ACTION. Orbis Gold Limited | Target’s Statement 7 How To Reject SEMAFO’s Offer To reject this inadequate Offer, TAKE NO ACTION. IGNORE ALL DOCUMENTS SENT TO YOU BY SEMAFO. You should read this Target’s Statement in full before making any decision, including the detailed reasons why to REJECT SEMAFO’s Offer. If you have any questions in relation to the Offer, please call Orbis Gold’s information line on 1300 868 464 for callers within Australia or on +61 1300 868 464 for callers outside Australia. The information line will be open from Monday to Friday between 8.30am to 5.30pm (Sydney time). Orbis Gold Limited | Target’s Statement