Letseng’s independent advisor responds

Attn: David McKay

4th October 2005

Dear Editor

In response to David McKay’s article in Finweek of 5 October 2005 entitled “Secrets go to the grave” (also published on Miningmx.com as Brett Kebble’s diamond link) and the allegations that Angolan diamond traders were making use of JCI’s Letseng diamond mine in Lesotho to wash smuggled gems, we wish to advise the editor of a number of issues which will assist in dismissing these allegations.

Venmyn Rand (Pty) Ltd (“Venmyn”) was contracted by Letseng Diamonds (Pty) Ltd (“Letseng Diamonds”) in July 2005 to act as Independent Advisor and to complete a Competent Persons Report on the mine for the proposed disposal of 76% of Letseng Diamond by Letseng Investment Holdings (South Africa) (Pty) Ltd. The document was duly completed by the end of August and currently forms part of the due diligence process of potential purchasers. This is not the first time Venmyn has carried out independent work on the mine and is fully familiar with the operation and its historical diamond production.

As part of the due diligence process, as required by the JSE Listing Requirements Section 12.14 (ix) and (x), Venmyn is obliged to present historical information and verify it in the light of data from the current operation. In order to do this Venmyn compared the size frequency distribution (“SFD”) of the historic parcels sold from the various sources (Satellite Pipe and Main Pipe) with the recent tenders sold for the same sources. SFD curves provide a “signature” of the diamond production for a particular deposit, provided of course that sufficient diamonds have been sampled or produced. For presentation purposes all the old and new data is summarised by way of their respective SFD plots as follows:-

Note that old data is the production records of Letseng generated by De Beers and provided to Venmyn by Letseng mine.

The similarity of the curves is apparent, especially in the +21 sieve size category. It is this production of large stones through time that makes Letseng so unique as commented upon in your article. However, the consistency of the diamond production and sales SFDs provides comfort that neither salting or scalping has or is taking place at the mine.

It should be noted that various organisations in the minerals industry have disparaged Letseng and there is no doubt that this could be attributed to vested interest or malicious intent.

For further information on SFDs and an example of a forensic investigation using them, please go to www.venmyn.com

We hope this helps to put the record straight.

Yours faithfully

BSc Hons (Geol), DMS Dip Bus Man
Pr.Sci.Nat., MAusIMM, MGSSA