HEADS OF AGREEMENT







entered into by and between









PLATINUM GROUP METALS (RSA) (PTY) LTD



(Registration No. 2000/025984/07)



hereinafter called "PTM"









and









AFRICA WIDE INVESTMENT

HOLDINGS (PTY) LTD

OR IT'S NOMINEE



(Registration No. 2000/027931/07)



hereinafter called "AW"









And Whereas the Parties have agreed that they want to
conclude a Joint venture agreement regarding mining of Platinum in its broadest
sense on two properties.



And whereas the Parties have indicated that they are eager
to operate as far as possible within the ambit of the mining charter and within
the guidelines and principals of Government specifically related to its vision
for Black Economic Empowerment.



Now therefore





1.

DEFINITIONS



1.1

In this Agreement, unless inconsistent with the context, the
following words and phrases shall have the respective meanings assigned to them
:



"Accounting Period"

means a period of 12 (TWELVE) calendar months commencing on 1
January and ending on 31 December of each year, or such other period as the
Management Committee may determine;



"the Act"

shall mean the Minerals Act 50 of 1991 as amended or substituted;



"Affiliate"

shall mean, in relation to any person, any company which is for
the time being a subsidiary or holding company of that person or a subsidiary of
a holding company of such person, and a company is a subsidiary of another
company (its holding company) if that other company is in Control of the former
company or if it is a subsidiary of a company which is itself a subsidiary of
that other company;



"this Agreement"

means this Notarial Joint Venture Agreement and shall include the
Annexes hereto;



"Bankable Feasibility Study"

shall mean a comprehensive document or documents that addresses
all matters which are customarily required for an effective assessment of the
viability of the development and exploitation of the JV Area, in such form and
detail as are required for the purposes of determining whether to finance the
development of a commercial mining operation within the JV Area, including but
not limited to chapters on the following: ownership, location, geology and ore
reserves, metallurgy, mining, materials handling, processing, ancillary
facilities and site services, infrastructure for and availability of labour,
energy supply, environmental impact studies and rehabilitation obligations,
capital costs, costs to be incurred to sustain production including initial
working capital, the time and critical path to place the mine into production
and financing requirements throughout the construction phase, financial analysis
(including price sensitivity analysis) assumptions as to mineral prices and
utilisation of a discount rate consistent with financing costs at the time as
well as project and country risks;



"Budget"

means any capital or operating budget or both of the Joint
Venture, approved by the Management Committee in accordance with 8.11 or the
exploration committee referred to in 6.3;



"Budget Period"

means each successive 12 (TWELVE) month period of this Agreement
commencing on the Effective Date;



"Business"

means those activities of the Joint Venture set out in 2.3;



"Business Days"

means any day, other than a Saturday, Sunday or any statutory
public holiday in the Republic of South Africa or Canada;



"By-products"

means materials, compounds, metals and products other than
Concentrate for which a commercial value exists and which can be produced and
sold by the Joint Venture;



"Call"

means a request by the Manager to a Participant in accordance with
this Agreement that it contributes the Called Sum set out in the request;



"Called Sum"

means the amount payable by a Participant pursuant to a Call;



"Capital Expenditure"

means all expenditure, which is generally regarded in the mining
industry in South Africa as expenditure of a capital nature, and shall include
expenditure which is generally regarded in the mining industry in South Africa
as replacement and/or ongoing and/or renewal capital expenditure;



"Commercial Production"

means Concentrate produced from the Mine by the Joint Venture;



"Concentrate"

means any treatable product arising from the process of crushing,
milling and flotation of ore produced by the Mine whereby the Platinum Group
Metals, including waste, are treated in a Concentrator Complex before
commencement of the smelting and precious metal refining process;



"Concentrator Complex"

means a mineral processing facility consisting of activities such
as crushing, milling and thickening, froth flotation, tailings disposal and
concentrate filtration but does not include smelting or other downstream
processing facilities such as base metals and precious metals refineries;



"Confidential Information"

means all communications, whether written, pictorial or oral, and
all other material relating to Mining and Prospecting Information, commercial
and technical information, trade secrets, agreements (whether in writing or not,
or in electronic format), or which can be obtained by examination, testing,
visual inspection or analysis, including, without limitation, business or
financial data, know-how, formulae, processes, designs, sketches, plans,
drawings, specifications, sample reports, models, studies, findings, computer
software, inventions or ideas, analyses, concepts, compilations, studies and
other material prepared by or in possession of or under the control of any
Party, as well as that which contain or otherwise reflect or are generated from
any such information as is specified in this definition, or any information
which is not in the public domain for a reason other than a breach of this
Agreement;



"Control"

in relation to a company means any one of the following, namely if
another company or legal entity or person (whether alone or pursuant to an
agreement with others) :



-

has the power to ensure the majority of that company's board of
directors will act in accordance with its wishes;



or if the company is listed on a stock exchange, "Control"means :



-

the holding of shares or the aggregate of holdings of shares or
other securities in a company entitling the holder thereof to exercise, or cause
to be exercised 30% (THIRTY PERCENT) or more of the voting rights at
shareholders meetings of the company irrespective of whether such holding or
holdings confers de factocontrol; or

-

the holding or control by a shareholder or member alone or
pursuant to an agreement with other shareholders or members of more than 30%
(THIRTY PERCENT) of the voting rights in the company;



"the Effective Date"

the date of fulfilment of all of the suspensive condition in
24;



"EMPR"

means the Environmental Management Programme submitted in
accordance with the provisions of the Act, as approved (or amended) by the
Management Committee and by the relevant authority for the Mine;



"Encumbrance"

means any mortgage, pledge, lien, security interest, trust
arrangement or similar rights or interest of any third party;



"Expenditure"

means expenditure which is required to meet expenditure of the
Joint Venture, whether during the Exploration Phase or the Exploitation Phase
and whether Capital Expenditure or Operating Expenditure;

"the Exploitation Phase"

the period of the Joint Venture Project after the completion of a
Bankable Feasibility Study in relation to the JV Area;



"Exploration Expenditure"

shall mean all costs, charges and expenses (including, but not
limited to, prospecting rentals, administration fees and costs, licence fees,
licence acquisition fees, payments to surface owners, or payments to the State),
payable and payments of whatsoever nature made or incurred in connection with
the prospecting and investigation of the JV Area, and shall include, but not be
limited to, all costs, charges and expenses required for the completion of any
preliminary appraisals, geological assessments, engineering studies,
metallurgical tests and feasibility studies carried out to ascertain the
economic viability of mineralisation in and upon the JV Area, the cost of all
personnel of PTM directly or indirectly engaged in the project, and any costs of
rehabilitation incurred or provided for in the course of prospecting;

"the Exploration Phase"

the period of the Joint Venture Project from the Effective Date up
to the completion of a Bankable Feasibility Study;



"IAS"

means generally accepted accounting principles approved from time
to time as International Accounting Standards by the International Accounting
Standards Committee;



"Joint Venture Project"

means the joint venture between PTM and AW to explore for and
exploit PGM's on, in, or under the JV Area, constituted in accordance with the
terms of this Agreement and subject to the specific terms of this Agreement;



"Joint Venture Information"

means all commercially sensitive knowledge and Confidential
Information pertaining to the Joint Venture;



"JV Area"

listed on Annex "A";



"the Joint Venture"

the joint venture constituted as contemplated in 3.1;

"Management Committee"

shall mean the committee established in terms of clause 8;





"the Manager"

the manager of the Joint Venture Project appointed in terms of
9;



"Meeting"

means a Management Committee meeting;



"the Mine"

means the excavations and all associated workings on the JV Area,
both currently existing and those to be developed during the Exploitation Phase
of the Joint Venture, and the Concentrator Complex, the mining area and all
buildings, structures, machinery, roads and appurtenances whether on or outside
the JV Area used or intended to be used for the purposes of searching for,
winning, exploitation of and processing of PGM's on the JV Area;



"Mining and Prospecting

Information"

means all Confidential Information available with respect to the
Joint Venture Project in relation to PGM's including, but not limited to all
surveys, maps, mosaics, aerial photographs, electromagnetic tapes,
electromagnetic or optical disks, sketches, drawings, memoranda, drill cores,
logs of such drill cores, geophysical, geological or drill maps, sampling and
assay reports, notes, and other relevant information and data in whatever
form;



"Operating Expenditure"

means every expenditure of any kind other than Capital Expenditure
lawfully incurred by the Manager (or the appointees of the Manager) in the
exploration for PGM's and in the management, administration, financing and
operation and rehabilitation of the Mine, including all accruals and provisions,
which would be deemed to be operating expenditure in conformity with good mining
practice in South Africa and in accordance with internationally accepted
accounting practice as well as the policies laid down by the Management
Committee from time to time and including all obligations to pay royalties in
terms of the PGM Rights;



"the Option Contract"

the prospecting and option contract concluded between the
Parties, to which a draft of this Agreement was annexed as Annex "B";



"Participant"

means any party who holds a Participation Interest in the Joint
Venture from time to time;



"Participation Interest"

shall mean in relation to a Participant, the ownership interest of
a Participant in the Joint Venture, including in the rights associated
therewith, including manage­ment, control, Profits, Production and the PGM
Rights and beneficial ownership of the assets expressed as a percentage;



"Party"

means a reference to PTM and AW, and "Parties" means a
reference to both of them;



"Platinum Group Metals"

or "PGM's"

means platinum, palladium, rhodium, ruthenium, iridium, and
osmium, and the metals and minerals mineralogically associated therewith
including but not limited to gold, chrome, silver, copper, nickel and cobalt
together with any such metals and minerals which may be extracted from the
normal mining of first-mentioned minerals in, on or under the JV Areas, to the
extent that rights thereto are held by the Parties as at the Effective Date in
terms of the PGM Rights;



"PGM Rights"

the PTM Rights and the AW Rights together;



"Proceeds"

means all monies received for and on behalf of the Joint Venture
from the disposal of Production;



"Production"

means all Concentrate and By-products produced from the JV
Area;



"Profit"

means net profit before tax as envisaged by IAS;



"Programme of Work"

means a programme of work to be undertaken by or on behalf of the
Joint Venture, which has been approved by the Management Committee in accordance
with 8.11 or by the exploration committee referred to in 6.3;



"PTM"

as defined in the description of the parties above;



"PTM's Deemed Expenditure"

means the Exploration Expenditure deemed to be incurred by PTM on
the JV area after the effective date, and which will be established at a later
date;



"the PTM Rights"

70% (SEVENTY PERCENT) of the PGM Rights in respect of the JV Area
as at the Effective Date and thereafter adjusted from time to time in accordance
with PTM's Participation Interest in the Joint Venture;



"Records"

means, in relation to the Joint Venture Project, all books,
records, invoices, documents and other papers, tapes, or disks maintained by a
Party or by the Joint Venture in relation to the Joint Venture Project;

"Representative"

means a natural person appointed by a Participant to attend and
represent that Participant at a Meeting;



"AW"

as defined in the description of the Parties above;



"AW Deemed Expenditure"

means the Exploration Expenditure deemed to  be
 incurred by AW after the effective date and which will be established at a
later date;



"AW Rights"

30% (THIRTY PERCENT) of the PGM Rights in respect of the JV Area
as at the Effective Date and thereafter adjusted from time to time in accordance
with AW's Participation Interest in the Joint Venture;



"Tailings"

means all waste dumps and other mine residues containing Platinum
Group Metals and associated metals.



1.1

If any provision in a definition is a substantive provision,
conferring rights or imposing obligations on any Party, notwithstanding that
such provision is only contained in the relevant definition, effect shall be
given thereto as if such provision were a substantive provision in the body of
this Agreement.



1.2

Unless inconsistent with the context, an expression which denotes
:



1.2.1

any gender includes the other genders;

1.2.2

a natural person includes an artificial person and vice versa;



1.2.3

the singular includes the plural and vice versa.



1.3

The annexes to this Agreement form an integral part hereof and
words and expressions defined in this Agreement shall bear, unless the context
otherwise requires, the same meaning in such schedules.



1.4

The headnotes to the clauses in this Agreement are inserted for
reference purposes only and shall in no way govern the construction or
interpretation hereof.



2.

INTRODUCTION



2.1

PTM holds Option Contract to acquire the PTM Rights.



2.2

Upon signature by the parties of this agreement the parties shall
be deemed to have concluded a joint venture partnership regarding the following
prospects;

a

Tweespalk

b

Oorlogsfontein



2.3

The Joint Venture will have as its purpose and Business :



2.3.1

the completion of PGM exploration on the JV Area;



2.3.2

the completion of a Bankable Feasibility Study on the JV Area;
and



2.3.3

mining and extraction of PGM's on the JV Area.



3.

ESTABLISHMENT OF THE JOINT VENTURE



3.1

With effect from the Effective Date, the Participants shall carry
on the Joint Venture Project, upon the terms and conditions and for the purposes
and scope as defined in this Agreement.  Except as otherwise provided for
in this Agreement, PTM and AW shall be the only Participants in the Joint
Venture.



3.2

Forthwith after the Effective Date, to achieve the objectives in
2.3, the Parties agree to associate together in a joint venture to be known as
the PTM Joint Venture.



3.3

Unless otherwise agreed between the Participants, all the
obligations which accrue to and are incurred by them as against third parties in
pursuing the objects of the Joint Venture in accordance with the provisions of
this Agreement, shall be incurred by the Participants to the Joint Venture in
relation to their respective Participation Interests in the Joint Venture from
time to time.

3.4

Nothing in this Agreement shall be construed as creating a
partnership between the Participants, their intention being merely to co-operate
with each other and to act together for purposes of the Joint Venture Projects
as mentioned above in par. 2.2



3.5

Save as may otherwise be permitted by this Agreement, none of the
Participants shall be entitled to incur any obligations on behalf of the others
or to act on behalf of the others or to act on behalf of or bind the Joint
Venture or any Participant.



3.6

The initial Participation Interests of the Participants in the
Joint Venture shall be 70% (SEVENTY PERCENT) as to PTM and 30% (THIRTY PERCENT)
as to AW.



4.

WARRANTIES AND REPRESENTATIONS



4.1

AW (i) represents and warrants as follows to PTM (such
representations and warranties being of a continuous nature and deemed to be
effective at all times during the term of this Agreement); and (ii) acknowledges
and confirms that PTM, after due enquiry, is relying on such representations and
warranties in the entering into by it of this Agreement :



4.1.1

AW is a corporation duly incorporated and existing under the laws
of South Africa and is duly qualified, licensed or registered to carry on
business under the laws applicable to it in all jurisdictions in which the
nature of its assets or business makes such qualification necessary or where
failure to be so qualified would have a material adverse effect on its business
or its ability to fulfil its obligations under this Agreement;



4.1.2

it has all necessary corporate power to enter into and perform its
obligations under this Agreement and any agreement and instrument referred to in
or contemplated by this Agreement;



4.1.3

it is not (i) insolvent; or (ii) generally unable to pay its debts
as such debts become due;



4.1.4

the execution, delivery and performance by it of this Agreement
and any other agreement or instrument to be executed and delivered by it
hereunder and the consummation by it of all the transactions contemplated hereby
and thereby have been duly authorised by all necessary corporate action on the
part of it;



4.1.5

this Agreement and all other agreements or instruments to be
executed and delivered by it hereunder have been duly executed and delivered by
it, and constitute legal, valid and binding obligations of it enforceable
against them in accordance with their respective terms;



4.1.6

it is not subject to, or party to, any charter or by-law
restriction, any law, any claim, or any Encumbrance or any other restrictions of
any kind or character which would prevent consummation of or have any adverse
effect on the transactions contemplated by this Agreement or any other agreement
or instrument to be executed and delivered by it hereunder;



4.1.7

it is not required to obtain shareholder approval for the
execution or delivery of this Agreement or the performance of any of its terms
and no regulatory body having jurisdiction over it is required to consent to or
approve the execution and delivery of this Agreement or the performance of any
of its terms, or if necessary, it has obtained such shareholder approval and/or
such consents;



4.1.8

it, alone or together with any other person, do not hold any
direct or indirect interest in or right to acquire any interest in any right to
explore or mine or both, any part of the JV Area other than the AW Rights;



4.1.9

all taxes, levies, duties or imposts of any kind whatsoever in
respect of their ownership of the AW Rights which were or are due and payable on
or before the date of this Agreement have been paid and satisfied as of such
date.



4.2

PTM (i) represents and warrants as follows to AW (such
representations and warranties being of a continuous nature and deemed to be
effective at all times during the term of this Agreement); and (ii) acknowledges
and confirms that AW, after due enquiry, is relying on such representations and
warranties in the entering into by it of this Agreement :



4.2.1

PTM is incorporated in the Republic of South Africa, under
Registration No. ______________;



4.2.2

PTM is a corporation duly incorporated and existing under the laws
of South Africa and is duly qualified, licensed or registered to carry on
business under the laws applicable to it in all jurisdictions in which the
nature of its assets or business makes such qualification necessary or where
failure to be so qualified would have a material adverse effect on its business
or its ability to fulfil its obligations under this Agreement;



4.2.3

PTM is not (i) insolvent; or (ii) generally unable to pay its
debts to as such debts become due;



4.2.4

the execution, delivery and performance by PTM of this Agreement
and any other agreement or instrument to be executed and delivered by it
hereunder and the consummation by it of all the transactions contemplated hereby
and thereby have been duly authorised by all necessary corporate action on the
part of PTM;



4.2.5

this Agreement and all other agreements or instruments to be
executed and delivered by PTM hereunder have been duly executed and delivered by
PTM, as the case may be, and constitute legal, valid and binding obligations of
PTM enforceable against PTM in accordance with their respective terms;



4.2.6

PTM is not subject to, or party to, any charter or by-law
restriction, any law, any claim, or any Encumbrance or any other restrictions of
any kind or character which would prevent consummation of or have any adverse
effect on the transactions contemplated by this Agreement or any other agreement
or instrument to be executed and delivered by PTM hereunder, except for board
approval by PTM as well as regulatory approval.  If PTM's board doesn't
reject the agreement within 30 days of signature hereof it will be construed as
formal;



4.2.7

PTM is not required to obtain shareholder approval for the
execution or delivery of this Agreement or the performance of any of its
terms.



4.2.8

PTM, alone or together with any person, does not hold any direct
or indirect interest in or rights to explore or mine or both, any part of the JV
Area, other than the PTM Rights;



4.2.9

all taxes, levies, duties or imposts of any kind whatsoever in
respect of the ownership and use of the PTM Rights which were or are due and
payable on or prior to the date of this Agreement have been paid and satisfied
as of such date.



5.

DURATION



5.1

The Joint Venture Project shall be deemed to be established and
constituted on the Effective Date until the earlier of :



5.1.1

closure of the Mine, and once rehabilitation of the Mine and
related property has been completed and a closure certificate in regard thereto
has been obtained in terms of the prevailing legislation; or;

5.1.2

termination of the Joint Venture Project by mutual written
agreement between the Parties.





5.2

No Participant shall have the right to, and the Participants agree
not to, dissolve, terminate or liquidate or to petition any court for the
winding up, dissolution, deregistration or liquidation of the Joint Venture
except as provided herein.



5.3

For further clarity, the Joint Venture Project shall not be
terminated by the admission of any new Participant to the Joint Venture.



6.

EXPLORATION PHASE



6.1

During the Exploration Phase :



6.1.1

the Participants shall spend sufficient Exploration Expenditure on
the JV Area for and on behalf of the Joint Venture, in order for a Bankable
Feasibility Study to be completed in respect of the JV Area, which Exploration
Expenditure shall be borne by the Participants in accordance with their
respective Participation Interests in the Joint Venture from time to time;



6.1.2

PTM shall contribute the AW Rights to the Joint Venture for no
consideration;

6.1.3

AW shall contribute the AW Rights to the Joint Venture for no
consideration;



6.1.4

the Participants shall procure the issue of a prospecting permit
in terms of Section 6 of the Act (or equivalent right in terms of
subsequent legislation) to the Participants in each of the Participants' names
to the extent of their respective Participation Interests in the Joint Venture
from time to time, in respect of the JV Area;



6.1.5

in regard to the Exploration Expenditure referred to in 6.1.1 the
Manager shall furnish the Participants quarterly statements detailing
Exploration Expenditure for the relevant quarter together with access to all
documentation evidencing such expenditure and an annual audit certificate
certifying the amount of such expenditure;



6.1.6

PTM's contribution to Exploration Expenditure of the Joint Venture
may, at the election of PTM, be made in cash or services; AW's contribution to
Exploration Expenditure shall also be made in cash and/or services;



6.1.7

the activities of the Joint Venture Project shall be to identify
PGM extraction opportunities, exploration, and a pre-feasibility study leading
to a Bankable Feasibility Study;



6.1.8

the Participants shall decide whether the Joint Venture shall
proceed to a Bankable Feasibility Study in relation to the JV Area;

6.1.9

the Manager shall be obliged to submit for approval to the
exploration committee referred to in 6.3 1 (ONE) year exploration Budgets;



6.1.10

the decision to proceed to the Exploitation Phase of the Joint
Venture or not shall be taken by the Participants;



6.1.11

this Agreement shall constitute each Participant's written consent
from time to time, in accordance with Section 6(1)(b) of the Act, to the other
Participant to prospect for PGM's for its own account in, on and under the JV
Area but only to the extent of the Participants' respective Participation
Interests in the Joint Venture from time to time.



6.2

Should this Agreement be terminated or lapse without the Parties
having commenced the Exploitation Phase, the Manager shall on behalf of the
Participants fill in or cover or otherwise render safe all holes and excavations
made by it on the JV Area to the extent that it is required to do so pursuant to
the approved environmental programmes in respect of the JV Area and in order to
obtain "closure certificates" in respect of the JV Area pursuant to
Section 12 of the Act, subject however to any provisions of law or regulation
and/or directives by officials of the Department of Minerals and Energy, and
shall (to the extent provided for by law or regulation) be answerable to the
landowners for any damage caused to any improvements on the JV Area.



6.3

Forthwith after the Effective Date the Parties shall each appoint
2 (TWO) representatives to an exploration committee which will be formed to
oversee the exploration activities during the Exploration Phase.  The
committee shall appoint a chairman and such Chairman will not have a casting
vote.  The manager oversees all exploration activities subject to the
manager committee as set out herein.  The management committee will at all
times have representation proportionate to clause 8.5 contained herein for both
shareholders.



6.4

Forthwith after the Effective Date PTM shall formulate a Programme
of Work for the exploration of the JV Area and present it to he Management
Committee.



7.

EXPLOITATION PHASE



7.1

Should the Participants pursuant to a Bankable Feasibility Study,
decide to proceed to the Exploitation Phase of the Joint Venture Project, the
Participants shall decide whether to form a new legal entity to conduct
exploitation, and on failure to reach such an agreement, the Joint Venture will
continue to operate in accordance with the terms and conditions set out
hereunder.



7.2

During the Exploitation Phase all Capital Expenditure and
Operating Expenditure requirements of the Joint Venture Project shall be funded
by the Participants in accordance with their respective Participation Interests
in the Joint Venture from time to time.



7.3

In regard to management of the cash of the Joint Venture during
the Exploitation Phase:



7.3.1

all of the Proceeds and all the other revenue of the Joint Venture
derived from the sale of anything else by or on behalf of the Participants as a
result of the  holding of their Participation Interests in the Joint
Venture, or any insurance proceeds as a result of a claim for loss of Profits,
will be paid into a bank account in the name of the Joint Venture;



7.3.2

Operating Expenditure and Capital Expenditure of the Joint Venture
shall be paid for by the Manager out of the bank account referred to in
7.3.1;



7.3.3

the Manager shall retain sufficient funds in the said bank account
to fund working capital of the Joint Venture required for Operating Expenditure
and Capital Expenditure of the Joint Venture in an amount to be determined by
the Manager, which amount may be varied by the Management Committee at any
time;



7.3.4

the Participants will maintain the Profit distribution policy
whereby, subject to the making of appropriate specific reservations, the portion
of annual Profit to be distributed and the portion thereof to be retained, will
be commensurate with the maintaining of a sound financial position of the Joint
Venture.



7.4

It is recorded that all liabilities and obligations of the Joint
Venture shall be borne by the Participants in accordance with their respective
Participation Interests in the Joint Venture from time to time.



7.5

All Capital Expenditure and Operating Expenditure will only be
incurred in terms of a Budget and/or the Manager's schedule of authority.
 The Management Committee shall be required to approve Budgets, cash flow
forecasts and cash call procedures.



7.6

Should a community trust or similar such entity be established by
the Participants in relation to the Joint Venture Project during the
Exploitation Phase of the Joint Venture Project the Participation Interest of
such a community trust shall be determined at the time of completion of the
Bankable Feasibility Study, and shall be obtained proportionately from the
Participation Interests of PTM and AW.



7.7

From the Effective Date, the Participation Interest of a
Participant, shall be re-calculated at the end of each successive Call in
accordance with the formula set out hereunder :



A
    
    100X=
    ____
    X
    ____B
    
    1






where

X

is the Participation Interest of the Participant concerned,
expressed as a percentage, at the end of a particular Call;

A

is PTM's Deemed Expenditure (R350 000,00) and AW's Deemed
Expenditure (R150 000,00) on the JV Area plus all Expenditure actually incurred
by the Participant concerned since the Effective Date;

B

is the total Expenditure incurred on the JV Area since the
Effective Date plus an amount which equals the aggregate of PTM's Deemed
Expenditure and RM's Deemed Expenditure.



7.8

If a Participant defaults in meeting a Call within the periods
specified in this Agreement, the defaulting Participant's Participation Interest
will be recalculated in accordance with the formula in clause 7.8 applied at the
end of each Call in question.



8.

MANAGEMENT COMMITTEE



8.1

As soon as reasonably practicable after the commencement of the
Exploitation Phase, the Parties shall establish a Management Committee, which
will direct the day-to-day activities of the Joint Venture and the Manager in
accordance with the provisions of this clause 8.



8.2

PTM and AW shall each appoint 2 (TWO) Representatives to the
Management Committee.  For or as long as each of PTM and AW shall have a
Participation Interest of not less than 11% (ELEVEN PERCENT) in the Joint
Venture, such Participant shall be entitled to maintain its Representatives and
their alternates as members of the Management Committee.



8.3

The Participants shall be bound by all decisions of the Management
Committee properly taken in accordance with the provisions of this
Agreement.



8.4

The appointment by Participants of Representatives on the
Management Committee shall remain in effect until such time as notice of any
removal and replacement of any such Representative is communicated by notice in
writing to the other Participant.



8.5

All resolutions of the Management Committee shall be passed by the
simple majority vote of the members present or represented at the meeting.
 Each Representative shall have 1 (ONE) vote for each percentage
Participation Interest held by the Participant appointing such Representative.
 In the event that a Participant is represented at a meeting by more than
one Representative and/or alternate, such Representatives and/or alternates
shall vote en bloc for the Participant they represent.  The quorum
for any such meeting shall be the presence thereat of one Representative or one
alternate of each of the Participant entitled to appoint one or more
Representative in terms of clause 8.2.



8.6

The Management Committee shall meet at quarterly intervals at a
suitable venue.



8.7

The Chairman of the Management Committee shall be appointed as
chairman by the Participant which holds the majority Participation Interest.
 The chairman shall not be entitled to a second or casting vote.



8.8

Not later than 14 (FOURTEEN) days prior to each meeting of the
Management Committee, the Manager shall deliver to every Representative, a
notice of such meeting, an agenda for the meeting and a copy of any document in
relation to which action is to be taken or considered, together with such
supplementary information as may be reasonably required or requested by any
Representative on the Management Committee.



8.9

The Management Committee may be assisted at any meeting by
technical, financial, legal or other professional advisers; provided that where
individual Representatives on the Management Committee wish to utilise the
services of any person who is not employed directly by either PTM or AW or any
of their respective Affiliates then the name of the proposed advisers and the
nature of the advice to be sought shall first be referred for approval to the
chairman of the Management Committee whose approval shall not be unreasonably
withheld.



8.10

Minutes of meetings of the Management Committee shall be prepared
by the Manager and circulated to all Representatives on the Management Committee
within a reasonable time.  Minutes of each previous meeting will be tabled
for approval at the next subsequent meeting.



8.11

The Management Committee shall be responsible for the review or
approval of the following :



8.11.1

Programmes of Work or amendments variations or modifications
thereto, Budgets, financial accounts and reports of activities;

8.11.2

renewal, surrender, modification or transfer of rights, titles and
permits to prospect and to mine;



8.11.3

termination of Joint Venture activities and economic feasibility
of a deposit.



In addition, the Management Committee shall be responsible for any
other matters which the Parties agree should be the responsibility of the
Management Committee.



9.

MANAGER



9.1

"The management committee will appoint a manager to act in such a
capacity on behalf of the joint venture.



9.2

The Manager shall :



9.2.1

be responsible for implementing the decisions, from time to time,
of the Management Committee and the exploration committee in 6.3 and shall not
act outside such directions;



9.2.2

subject to the provisions of 9.2.1 above, control, manage,
supervise and conduct all technical and other activities for and on behalf of
the Joint Venture;



9.2.3

be responsible, subject at all times to the remaining provisions
of this clause 9, for :



9.2.4

the preparation, in consultation with the other party, of all
Programmes of Work and Budgets relating to the Joint Venture activities together
with any amendments or supplements thereto.  Such Programmes of Work and
Budgets shall be sent by the Manager to the Representatives on the Management
Committee not less than 14 (FOURTEEN) days prior to the date of the Management
Committee meeting convened for the purpose of considering and deliberating,
inter alia, on such Programmes of Work and Budgets;



9.2.5

the maintenance of all accounting records on behalf of the Joint
Venture, in accordance with the accounting procedures annexed as Appendix "2" to
this Agreement;



9.2.6

the conduct of exploitation of PGM's within the Project Area.
 The Manager shall conduct all of its activities under this Agreement in a
good, workmanlike manner and with the standard of diligence and care normally
exercised by qualified persons in the performance of comparable work, provided,
however, that the Manager shall incur no liabilities whatsoever to the Joint
Venture or to any party in relation to the conduct of such activities except as
may arise out of any breach by the Manager of its obligations hereunder or as
may arise out of any negligent acts or omissions or wilful, wanton or dishonest
acts or omissions on the part of the Manager, its servants or agents;

9.2.7

the preparation and submission to representatives on the
Management Committee of progress and financial reports in accordance with the
requirements of the Management Committee;



9.2.8

the appointment of auditors;



9.2.9

the preparation and submission to the exploration committee in 6.3
and the Management Committee of calendar quarterly statements of account
reflecting, in reasonable detail, Expenditure, charges and credits during the
relevant quarter;



9.2.10

the provision, acquisition or leasing of all materials, supplies,
machinery, equipment and services required for any approved Programme of Work,
subject to the directions of the Management Committee and the limits prescribed
by such Programme of Work and its corresponding Budget;



9.2.11

the procuring of the services of such experts and consultants as
are necessary in regard to engineering, design, legal, accounting or other
professional services required in connection with the Joint Venture, subject, at
all times, to the limits of any applicable Programme of Work and Budget, and the
directions of the Management Committee;



9.2.12

the contracting of such persons as are necessary for the
implementation of any approved Programme of Work;



9.2.13

the performance of obligations necessary to maintain the projects,
and the making of recommendations to the Management Committee on their
acquisition; provided that any costs incurred in maintaining, renewing or
securing the JV Area or any ancillary rights, will be for the account of the
Joint Venture;



9.2.14

the securing of all licences, permits, approvals and authorities
necessary or appropriate for the objects of the Joint Venture;



9.2.15

the securing and maintaining in effect of adequate and reasonable
insurance covering the exposure to risk or loss of the Joint Venture as
determined by the Management Committee;



9.2.16

the maintaining of complete and accurate records and accounts of
all transactions undertaken by it in connection with the activities and
responsibilities hereunder;



9.2.17

the preparation of an audited statement of Expenditure incurred by
the Joint Venture as at the end of a Budget Period, the cost of which
preparation shall be considered and included as Expenditure;



9.2.18

the opening, operation and maintenance of a separate bank account
in the name of the Joint Venture;



9.2.19

the facilitation of the handover to another Manager on termination
of its appointment as Manager, howsoever arising.



9.3

The Manager shall not resign as Manager except upon the giving of
60 (SIXTY) days' written notice to that effect to the other Participants.



9.4

The Manager shall allow the Participants to this Agreement
reasonable access, at all times, to the JV Area and shall also permit parties or
their representatives to inspect and copy all data and information, whether
technical, financial and otherwise.



9.5

As compensation for the performance of its obligations hereunder
the Manager shall be entitled to a management fee payable quarterly in arrears,
in an amount equal to 10% (TEN PERCENT) of Expenditure (excluding the management
fee itself) actually incurred during the immediately preceding quarter,
throughout the Exploration Phase and the Exploitation Phase of the Joint
Venture, and 2% (TWO PERCENT) of Expenditure (excluding the management fee
itself) actually incurred during the immediately preceding quarter, throughout
the Exploitation Phase of the Joint Venture.



9.6

Should the Manager conclude a contract with an Affiliate in
connection with its activities as Manager such contracts shall be concluded on
market-related, arms-length terms as if the Manager was concluding such contract
with a third party, not being an Affiliate.



9.7

Should the Manager fail to fulfil any of its obligations under
this clause 9, and fail within 14 (FOURTEEN) days of written notice from
representatives of the Management Committee, other than those representing any
Affiliate of the Manager, to remedy such default, or should the Manager be
placed under judicial management, in liquidation, or be wound up, (all whether
voluntarily, compulsorily, provisionally or finally) or should it compound with
any of its creditors or commit any act of insolvency, then notwithstanding any
prior waiver, the representatives of the Management Committee, other than those
representing any Affiliate of the Manager, shall be entitled forthwith and
without further notice to terminate the appointment of the Manager, without
prejudice to any further or other rights or remedies which any party may have in
law or under this Agreement, whether in respect of damages or otherwise.
 The representatives of the party with the greatest Participation Interest,
at the time, other than any Affiliate of the outgoing Manager, shall be entitled
to appoint a new Manager, who shall be required to become a party to this
Agreement.



10.

CONTRIBUTIONS TO EXPENDITURE



10.1

Within 60 (SIXTY) days of the approval by the Management Committee
of the relevant Programme of Work and Budget, each of the Participants must
elect, by notice in writing to each other Participant, to contribute to such
Programme of Work and Budget as follows :



10.1.1

in proportion to its current Participation Interest as of the
beginning of the period covered thereby;



10.1.2

in some lesser amount than its current Participation Interest in
which case its Participation Interest shall be recalculated at the end of the
relevant Programme of Work as provided in clause 7.7.



10.2

Each Participant is entitled to fund any shortfall on a basis
which is pro-rata to its current Participation Interest.  The Manager shall
immediately notify the Management Committee of any material departure from an
approved Programme of Work and Budget.  If the Manager exceeds an approved
Budget by more than 10% (TEN PERCENT), then the excess over 10% (TEN PERCENT),
unless directly caused by an emergency or unexpected expenditure made pursuant
to clause 10.3 or unless otherwise authorised by the Management Committee, shall
be for the sole account of the Manager, and such excess shall not be included in
the calculation of any Participation Interest.  Budget overruns of 10% (TEN
PERCENT) or less shall be borne by the Participants in proportion to their
respective Participation Interests as of the beginning of the period covered by
the Programme of Work and Budget in question.



10.3

In case of emergency, the Manager may take any action it deems
necessary to protect life, limb or property, to protect the Joint Venture assets
or to comply with any applicable law or government regulation.  Likewise,
the Manager may incur expenditures for unexpected events which are beyond its
reasonable control and which do not result from a breach by it of the standard
of care outlined in clause 9.2.6.  In the case of either an emergency or
unexpected expenditure, the Manager shall promptly notify and keep the
Participants informed of the emergency or unexpected expenditure, and the
Manager shall be reimbursed therefor by the Participants within 14 (FOURTEEN)
days of receipt of an invoice in the relevant amount in proportion to their
respective Participation Interests as of the beginning of the period covered by
the then current Programme of Work and Budget.



10.4

On the basis of the approved Programme of Work and Budget, the
Manager shall submit to each Participant, prior to the last day of each calendar
quarter a Call for estimated cash requirements for the ensuing calendar quarter.
 Within 30 (THIRTY) days after receipt of each Call, each Participant shall
advance to the Operator its proportionate share of the estimated amount.
 Time is of the essence of payment of such Call.

11.

DISPOSAL OF PARTICIPATION INTEREST



11.1

A Participant may assign the whole (or any part) of its
Participation Interest to an Affiliate, subject to such Affiliate covenanting to
be bound by the terms and conditions of this Agreement, to the extent of the
Participation Interest assigned to it, and subject to such assignor Participant
guaranteeing the fulfilment by such Affiliate of its obligations as a
Participant under this Agreement.  Should the assignee cease to be an
Affiliate of the assignor, for any reason whatsoever, it shall immediately
reassign to the assignor all the Participation Interest then held by it.
 The assignor shall obtain from the transferee, at the time of transfer to
it of the Participation Interest, or part of it, appropriate authorities and
powers to execute that reassignment.  For the purposes of this clause 11.1,
"Affiliate" means any entity which is, at the time, directly a subsidiary
of the ultimate holding company, or the ultimate holding company of the
assignor, and not a subsidiary of a subsidiary of such holding company.



11.2

Subject to 11.1 :



11.2.1

should PTM wish to dispose to any third party, other than its
Affiliate, of any percentage or the whole of its Participation Interest it shall
give AW notice in writing of the price (which shall sound in money only) and
such other terms and conditions as PTM may determine.  The same will apply
if AW wishes to dispose a percentage or whole of its participation interest;

11.2.2

any third party proposing to acquire a Participation Interest in
the Joint Venture shall be obliged to bind itself to the terms and conditions of
this Agreement which are applicable to the selling party and any such third
party, which is not resident in the Republic of South Africa, shall consent to
the jurisdiction of the High Court of South Africa, for all purposes of this
Agreement and shall nominate an address in the Republic of South Africa at which
legal process may be served.



12.

ACCOUNTING MATTERS



12.1

The Joint Venture shall, keep full, complete and accurate books of
account, records and information with respect to any of the Joint Venture's
affairs and the same shall be maintained at the registered office of the Joint
Venture (and such other place as the Manager may deem desirable).  Entries
shall be made in such books of account and records of all such matters,
transactions and things as are usually written and entered in books of account
and records kept by persons or entities engaged in businesses similar to the
Business of the Joint Venture and electronic records shall be kept where
feasible.  Each Participant shall have the right, acting reasonably, to
audit, examine, and make copies of or extracts from the books of account and
records of the Joint Venture at all reasonable times during usual business
hours.  Such right may be exercised through any agent or employee of such
Participant designated by it, or by an independent chartered accountant
designated by such Participant.  Each Participant shall bear all expenses
incurred in any examination made for such Participant's account.



12.2

The initial auditors of the Joint Venture shall be Delloitte and
Touche provided that at its first meeting the Management Committee shall review
their appointment and decide on a selection process of the auditors from the
commencement of the Exploitation Phase.  After carrying out the selection
process the Management Committee shall review such appointment based on their
performance, ability and fees.  All audit reports and reports to management
on internal controls and procedures prepared by the auditors of the Joint
Venture, shall be made available to the Management Committee and each of the
Participants.  The audit fee to be paid to the auditors of the Joint
Venture shall be fixed from time to time by the Management Committee.



12.3

The Management Committee shall provide each Participant with
audited financial statements, as soon as reasonably possible, but no longer than
60 (SIXTY) days after the end of each Accounting Period, prepared in accordance
with IAS together with the report of the auditors thereon, to meet the reporting
requirements of the Participants.



12.4

The Joint Venture shall prepare and deliver to any Participant any
information packages or other information which such Participant reasonably
requests in connection with any domestic or foreign tax or other governmental
filing to be made by such Participant or any of its Affiliates, provided that
where the Joint Venture would not require such information for its own use or
benefit such Participant reimburses the Joint Venture for the incidental out of
pocket costs incurred by the Joint Venture in preparing and delivering any such
information packages or information (including but not limited to reasonable
costs in respect of the Joint Venture's own personnel and facilities).

12.5

The Joint Venture's Accounting Period will be from 1 January to 31
December each year.



13.

RESTRICTED MATTERS



No decision of the Management Committee in relation to any of the
matters set out herein shall be of any force or effect unless Representatives of
both PTM and AW shall be in agreement in respect of such matters :



13.1

to the voluntary dissolution or liquidation of the Joint Venture
and/or any resolution requiring or proposing such dissolution or
liquidation;



13.2

the acquisition or purchase of other businesses, either directly
or indirectly by means of purchasing shares in any company to which such
business may belong or the entering into of further joint ventures;



13.3

any material change in the Business or the objects of the Joint
Venture, or the material expansion of the Business;



13.4

any change in the basis of accounting, otherwise than in
accordance with IAS, as the case may be, from those used by the Joint Venture
during its immediately preceding Accounting Period and any decision authorising
material changes to the book value of any of the assets of the Joint
Venture;

13.5

the appointment of auditors;



13.6

The approval of any Expenditure exceeding 10% (TEN PERCENT) of
budgeted Expenditure during the Exploitation Phase;



13.7

contracts entered into with Affiliates of the Participants in
relation to the Joint Venture other than on an arm's length basis;



13.8

any material transaction outside of the normal course of
business;



14.

JOINT VENTURE INFORMATION, MINING AND PROSPECTING
INFORMATION



14.1

Each of the Participants agrees that it shall at all times treat
all Joint Venture Information and Mining and Prospecting Information as strictly
confidential and that, except as may be expressly permitted by a written
agreement between such Participant and the Joint Venture, or by the consent of
the other Participant, it shall not, directly or indirectly, at any time or
under any circumstances :



14.1.1

make use of (or make available to any of its Affiliates for their
use) any such information, or



14.1.2

communicate or disclose any such information to any person for any
purpose whatsoever, except, on notification to the other Participants to any
person which has a bona fide need to know such information in connection
with the Joint Venture.

14.2

For purposes of clause 14.1, Joint Venture Information and Mining
and Prospecting Information shall exclude any knowledge or information which
:



14.2.1

is or becomes generally available to the public other than as a
result of disclosure by such Participant in violation of this clause 14;



14.2.2

is or was independently developed by such Participant or on its
behalf by personnel having no access to such knowledge or information at the
time of independent development;



14.2.3

is already in such Participant's possession, provided that such
knowledge or information was not supplied to such Participant by, or on behalf
of, the Joint Venture, or any other Participant, and provided further, that such
knowledge or information was not obtained from a source known to such
Participant to be prohibited from disclosing such information to such
Participant by a legal, contractual or fiduciary obligation to the Joint
Venture, such Affiliate or such other Participants;



14.2.4

is required to be given, made or published by law or under the
rules and regulations of any relevant stock exchange or any applicable
regulatory authority, in which case, the Participant liable to so give, make or
publish the same shall give the other Participant reasonable written notice
thereof, along with drafts or copies thereof, as soon as is reasonably
practicable;

14.2.5

is required to be disclosed by PTM or AW to an Affiliate and/or to
any provider of finance in order for such companies to take informed decisions
regarding the Joint Venture; provided that PTM and AW shall procure that such
companies agree to keep the information disclosed as strictly confidential.



14.3

In the event that a Participant becomes legally compelled to
disclose any such information, such Participant will provide the Joint Venture
and the other Participant with prompt notice so that it may seek a protective
order or other appropriate remedy and/or waive compliance with the provisions of
this clause 14.  In the event that such protective order or other remedy is
not obtained, or that the Joint Venture or other Participants waives compliance
with the provisions of this clause 14, such Participant may disclose without
liability under this clause 14 only that portion of such information which such
Participant, after receiving legal advice is legally required to be disclosed
and shall co-operate with the Joint Venture and the other Participant at the
Joint Venture's expense to obtain reliable assurance that confidential treatment
will be afforded such information that is so disclosed.



15.

EXECUTION



In the event of any adjustment in the Participation Interest of
the Participants, the Participants shall execute and deliver such instructions
and documents as may be necessary to affect and give full legal effect to such
adjustment of such Participation Interest.

16.

PRODUCTION FROM THE MINE



16.1

During the Exploitation Phase, the PGM reserves in relation to the
Mine shall be expeditiously mined and the ore so mined shall be treated in a
suitable metallurgical process for the production of Concentrate in the most
economical and efficient manner, and in accordance with the plan approved by the
Management Committee from time to time.



16.2

The Participants shall be entitled to share in the Proceeds of the
Joint Venture in accordance with their respective Participation Interests in the
Joint Venture, subject to the terms and conditions contained in this
Agreement.



16.3

The Manager, subject to the overall direction of the Management
Committee, shall dispose of all By-products on the best terms available from
time to time, and materials produced by the Mine which are not Concentrate or
By-products shall be disposed of in accordance with the methods stipulated in
the EMPR for the Mine and in a cost effective manner.



17.

FORCE MAJEURE



17.1

If any Party is prevented or restricted directly or indirectly
from carrying out all or any of its obligations under this Agreement from any
cause beyond the reasonable control of that Party (including without limiting
the generality of the aforegoing, war, civil commotion, riot, insurrection,
strikes, lock-outs, fire, explosion, flood and acts of God, or by invasion of or
sit-ins at the JV Area, or where a Party is prevented from occupying or
operating any part of the Mine by combination of workmen or interference by
trades union), the Party so affected shall be relieved of its obligations
hereunder during the period that such event and its consequences continue but
only to the extent so prevented and shall not be liable for any delay or failure
in the performance of any obligations hereunder of loss of damages either
general, special or consequential which the other Party may suffer due to or
resulting from such delay or failure, provided always that written notice shall
within 48 (FORTY EIGHT) hours of the occurrence constituting Force Majeure be
given of any such inability to perform by the affected Party and provided
further that the obligation to give such notice shall be suspended to the extent
necessitated by such Force Majeure.



17.2

Any Party invoking Force Majeure shall use its best endeavours to
terminate the circumstances giving rise to Force Majeure and upon termination of
the circumstances giving rise thereto, shall forthwith give written notice
thereof to the other Parties.



17.3

If the full and proper implementation of this Agreement is
precluded by any of the events or a combination of the events contemplated in
17.1 for a period of more than 6 (SIX) consecutive months at any one time, then
and in such event the Parties shall endeavour to conclude new arrangements
equitable to both of them and failing agreement being reached, the provisions of
18 below shall apply.



18.

DISTRIBUTION OF ASSETS UPON LIQUIDATION



18.1

In the event that the Joint Venture is liquidated at any time, the
Joint Venture assets shall be distributed by the Joint Venture to the
Participants on such liquidation, in accordance with the provisions set out in
this clause.



18.2

The liquidator of the Joint Venture shall, unless otherwise
agreed, be a member of the auditors of the Joint Venture at the date of
liquidation or, if no such member is able or willing to act, an auditor agreed
upon between the Participants, and failing such agreement, appointed by lot.



18.3

The liquidator shall :



18.3.1

demand an account from each Participant of the assets of the Joint
Venture and the assets of the Participants contributed to the Joint Venture in
its possession as well as any Profits earned by the use or utilisation of those
assets since the date of liquidation of the Joint Venture;



18.3.2

compile an account reflecting the assets and liabilities of the
Joint Venture,  including amounts owed by the Joint Venture to the
Participants;



18.3.3

collect all debts due to the Joint Venture by persons other than
the Participants;



18.3.4

realise the assets of the Joint Venture in whatever manner he
deems fit, to the extent that he, in his sole discretion, deems necessary, to
:



-

pay the creditors of the Joint Venture;



-

pay the expenses of such realisation and the liquidation;



-

settle any claims between the Participants arising from the Joint
Venture; and



-

effect a distribution of the remaining assets or the proceeds
thereof in accordance with the Participants' respective Participation
Interests;



18.3.5

in the event of the proceeds of the realisation of the Joint
Venture assets proving insufficient to meet the liabilities of the Joint Venture
(other than any amounts due to the Participants), levy a contribution upon the
Participants to contribute to that deficit in the proportion in which they bear
the losses of the Joint Venture;



18.3.6

discharge all the liabilities of the Joint Venture to its
creditors other than the Participants insofar as the proceeds of the realisation
of the Joint Venture assets (if any), permit; and



18.3.7

compile and settle an account for the payment of claims owing by
the Joint Venture to the Participants, the settlement of their claims against
each other and the distribution of any assets remaining amongst the Participants
in accordance with this 18 with due account being taken of amounts owing by
either of the Participants to the Joint Venture.



19.

DISPUTE RESOLUTION



19.1

Should any dispute arise between the Parties in regard to :



19.1.1

the interpretation of; or



19.1.2

the carrying into effect of; or



19.1.3

any of the Parties' rights and obligations arising from; or



19.1.4

the rectification of



this Agreement, then that dispute shall be submitted to and
decided by arbitration.



9.2

That arbitration shall be held :



19.2.1

with only the Parties and their Representatives present thereat;



19.2.2

unless otherwise agreed in writing at Johannesburg,



it being the intention that the arbitration shall, where possible,
be held and concluded within 28 (TWENTY EIGHT) working days after it has been
demanded.



19.3

The arbitrator shall be agreed between the Parties and failing
agreement within 7 (SEVEN) days after the arbitration has been demanded, then
the arbitrator shall :



19.3.1

if the matter is primarily of an accounting nature, be an
independent auditor of not less than 10 (TEN) years' standing, appointed by the
President for the time being of the South African Institute of Chartered
Accountants or its successor body; or



19.3.2

if the matter is primarily of a legal nature or any matter which
is neither primarily of an accounting or a legal nature, be an independent
attorney of not less than 10 (TEN) years' standing or an independent advocate of
not less than 15 (FIFTEEN) years' standing appointed by the President for the
time being of the Johannesburg Bar Council or its successor body; or

19.3.3

if the matter is primarily of a technical nature, be a technical
expert of not less than 10 (TEN) years' standing, appointed by the President for
the time being of the Chamber of Mines, or its successor body.



19.4

If the Parties fail to agree whether the matter is primarily of an
accounting, legal or other nature, the matter shall be deemed to be primarily of
a legal nature.



19.5

The arbitrator shall have the fullest and freest discretion with
regard to the proceedings, and his award shall be final and binding on the
Parties to the dispute.  Furthermore the arbitrator :



19.5.1

may dispense wholly or in part with formal submissions or
pleadings;



19.5.2

shall include such order as to costs as he deems just.



19.6

The Parties shall be entitled to have the award made an order of
court of competent jurisdiction.



19.7

This clause shall be binding on the Parties notwithstanding, and
shall survive, the cancellation of this agreement.









20.

NOTICES AND DOMICILIA



20.1

The Parties hereto choose domicilia citandi et executandifor all purposes of and in connection with this Agreement as follows:



PTM :

Suite 477

Private Bag X09

Weltevreden Park

1715

FAX : +27 (0) 11 675 3178

EMAIL: rmjones@platinumgroupmetals.net







AW :

Equity Park 257

Block C

Brooklyn Road

Brooklyn

FAX : +27 (12) 632 8109

EMAIL: daan@britzvr.co.za



20.2

The Parties hereto shall be entitled to change their domiciliafrom time to time, provided that any new domiciliumselected shall be
an address, other than a box number and any such change shall only be effective
upon receipt of notice in writing by the other Parties of such change.



20.3

All notices, demands, communications or payments intended for any
Party shall be made or given at such Party's domiciliumfor the time
being.



20.4

A notice sent by one Party to another Party shall be deemed to
have been received :

20.4.1

on the same day, if delivered by hand;



20.4.2

on the same day, if sent by telex, email or telefax.



20.5

Notwithstanding anything to the contrary herein contained a
written notice or communication actually received by a Party shall be an
adequate written notice or communication to it notwithstanding that it was not
sent to or delivered at its chosen domicilium citandi et executandi.





21.

COSTS



Each Party shall bear its own costs incurred in negotiating and
drafting this Agreement.



22.

GOVERNING LAW



This Agreement shall be implemented in accordance with the laws of
the applicable jurisdiction, and shall be interpreted in accordance with the
laws of South Africa.



23.

GENERAL



23.1

This document constitutes the sole record of the Agreement between
the Parties in regard to the subject matter of this Agreement.



23.2

None of the Parties shall be bound by any express or implied term,
representation, warranty, promise or the like, not recorded herein.



23.3

No addition to, variation or consensual cancellation of this
Agreement shall be of any force or effect unless in writing and signed by or on
behalf of the Parties.



23.4

No indulgence which either of the Parties ("the grantor")
may grant to the others ("the grantees") shall constitute a waiver of any
of the rights of the grantor, who shall not thereby be precluded from exercising
any rights against the grantees which might have arisen in the past or which
might arise in the future.



23.5

Should any provision of this Agreement (including any provision
contained in any of the Annexes hereto) be in conflict with the provisions of
any law or be in any other way invalid or unenforceable, such conflicting or
invalid or unenforceable provision shall not be of any force or effect and shall
be severable from the rest of this Agreement (and from the Annexes hereto).



23.6

Within 60 days after signature hereof the parties shall have the
right to make certain amendments to the contract subject to the condition that
both parties agree in writing to such alteration and that such an alteration
will not impact on the essence of this agreement.





24.

SUSPENSIVE CONDITION



24.1

This Agreement, save for the provisions of 18, 20, 21, 22 and 23
and this 24, which shall be of immediate force and effect, shall be subject to
the fulfilment of the following suspensive condition, namely the obtaining of
all regulatory consents that may be required in law to conclude and/or implement
the Joint Venture Project including but not limited to the JSE Securities
Exchange, the London Stock Exchange, CDNX and affiliated exchanges, AIM, the
South African Competition Commission and the Competition Commission of the
European Union, and in terms of the Act.  Should the suspensive conditions
not be fulfilled within a period of 2 (TWO) months from the date of exercise of
the option in clause 8 of the Option Contract, or such extended period as the
Parties may agree in writing or waived in writing by the Parties, this Agreement
shall lapse and cease to be of any further force or effect.  The Parties
shall, notwithstanding the time limits in this 24, be obliged to use reasonable
endeavours to procure fulfilment of the suspensive conditions as  soon as
reasonably possible.



24.2

The consent of the Sanger and Sacke families for the acquisition
of the properties which consent will not be unreasonably withheld.

25.

CESSION



None of the Parties shall be entitled to cede or assign any of
their rights or obligations under this Agreement without the prior written
consent of the other Parties, subject to the provisions of 11.





26.

SUPPORT AND HARDSHIP



26.1

The Parties undertake at all times to do all such things, perform
all such actions and take all such steps and to procure the doing of all such
things, the performance of all such actions, and the taking of all such steps,
as may be open to them and necessary or desirable for or incidental to the
putting into effect or maintenance of the terms, conditions, import and intent
of this Agreement.



26.2

Where circumstances arise which were not contemplated or
visualised by the Parties at the commencement date of this Agreement, or which
render impracticable the implementation of this Agreement the Parties will meet
and negotiate in good faith to establish a modus operandi for the
attainment and fulfilment of the fundamental purpose of this Agreement which is
to form a Joint Venture for the exploitation of the PGM's in, on, and under the
JV Area, and will endeavour to reconcile any divergent interests between
themselves.

26.3

Without detracting from the further provisions of this 26, the
Parties agree that if during the term of this Agreement there is a significant
change in the general situation from that existing at the Effective Date thereof
which results in one or more of the Parties being placed in an inequitable or
unfavourable position, the Parties shall consult together with a view to
agreeing in a spirit of mutual trust and understanding what modification, if
any, to the present Agreement would be appropriate to take account of such
change.



26.4

The Parties undertake to act towards one another in all respects
relating to this Agreement, in utmost good faith.



26.5

Should the Mineral and Petroleum Resources Development Bill be
enacted at any time during the period of this Agreement the Parties shall
negotiate amendments to this Agreement as may be required to place the Parties
in the same commercial position that they would have been under this Agreement,
should the said Bill not have been enacted.



27.

BREACH



27.1

If at any time a Participant (the "Affected party") is
placed under judicial management, in liquidation, or under winding up, whether
voluntary, compulsory, final or provisional, or compounds or enters into an
arrangement of compromise with its creditors, the other Participant shall have
the right to acquire all (but not part only) of the Participation Interest in
the Joint Venture then held by the Affected party, upon written notice to that
effect given by the other party to the Affected party after the occurrence of
the events envisaged herein, at a price which will be determined as a fair
selling price by an independent expert appointed by the auditors of the Joint
Venture.



27.2

Upon determination of the price for the Participation Interest in
question as envisaged in 27.1, the other Participant shall be entitled within 60
(SIXTY) days thereafter on written notice to the Affected party to elect whether
or not it wishes to proceed with the acquisition of such Participation Interest
and if it elects so to proceed it shall within that 60 (SIXTY) day period effect
payment to the Affected party in cash of the price so determined for the
Participation Interest (but less the amount of any monies that may be owing by
the Affected party to the other Participant) against delivery thereof in such
form as will be suitable for securing transfer thereof in accordance with the
laws of South Africa.



27.3

If at any time any Participant commits any material breach of the
terms and conditions of this Agreement and fails to remedy such breach within 60
(SIXTY) days after the receipt of written notice from the other Participant
requiring it to remedy such default, the other Participant shall have the right
at its option, but without detracting from their further or alternative rights
and remedies and without prejudice to any claim which they may have for damages
for breach of contract or otherwise, to cancel this Agreement, in which event
:



27.3.1

this Agreement shall terminate;



27.3.2

the Defaulting Participant shall be released from all of its
obligations under this Agreement, except where such obligations arose from
events which occurred prior to breach;



27.3.3

the non-defaulting Participant may take transfer of the defaulting
Participant's Participation Interest and the provisions of 27.1 above shall
apply mutatis mutandis in relation thereto.



27.4

Notwithstanding the provisions of 27.3, no Participant shall be
entitled to exercise or enforce any remedy against another Participant in
relation to any breach of the terms and conditions of this Agreement :



27.4.1

if this Agreement specifies the steps to be taken in the event of
such breach, unless it takes such steps;



27.4.2

if this Agreement specifies an alternative remedy for such
breach;

27.4.3

unless the said breach is fundamental, material, and goes to the
root of this Agreement.



THUS DONE AND EXECUTED at PRETORIA on the 15th AUGUST
2002 in the presence of the undersigned witnesses.









SIGNED BY THE PARTIES AT THE PLACES AND ON THE DATES SET OUT
BELOW



PLACE:







For and on behalf of PLATINUM GROUP METALS (RSA) (PTY) LTD

DATE:







who warrants authority to execute this Agreement



WITNESS:





PLACE:







For and on behalf of AFRICA WIDE INVESTMENT HOLDINGS (PTY) LTD

DATE:







Who warrants authority to execute this Agreement

WITNESS: