Acquisition by Master Drilling of the business of the Atlantis Group of Companies (Pty) Ltd and its subsidiaries Master Drilling Group Limited (Incorporated in the Republic of South Africa) (Registration number 2011/008265/06) JSE share code: MDI ISIN: ZAE000171948 (“Master Drilling” or the “Company”) ACQUISITION BY MASTER DRILLING OF THE BUSINESS OF THE ATLANTIS GROUP OF COMPANIES (PTY) LTD AND ITS SUBSIDIARIES (“ATLANTIS GROUP”) 1. INTRODUCTION Shareholders are advised that Master Drilling and its subsidiaries have entered into various sale of business agreements (“the Agreement”) with Atlantis Group in respect of the proposed acquisition of the businesses of the Atlantis Group in the various countries in which these operate, subject to the fulfilment of the conditions precedent as set out in paragraph 6 below, (“the Acquisitions”). 2. NATURE OF BUSINESS The Acquisitions relate to the purchase of the businesses of the Atlantis Group in: (i) India [raiseboring business]; (ii) Brazil [raiseboring business]; (iii) Zambia [raiseboring business]; and (iv) South Africa [both a raiseboring business and a mining suppliers and parts manufacturing business]. The Acquisitions are divisible and none of them are dependent on the conclusion of the remaining Acquisitions. 3. RATIONALE FOR THE ACQUISITIONS The Acquisitions will strengthen Master Drilling’s businesses in each of the above regions and will augment the skills and expertise of the group in these various countries. The Acquisitions should have a positive effect on growth in earnings of Master Drilling, and should reduce capital expenditure budgeted for the financial year. The purchase consideration will be financed principally from internal resources. 4. EFFECTIVE DATE OF THE ACQUISITION The later of 1st September 2018 or the date of fulfilment of the last of the conditions precedent in paragraph 6 below. 5. PURCHASE CONSIDERATION The purchase consideration to be paid by Master Drilling for the Business is R107,5 million less the aggregate of the liabilities of the businesses. Payments will be in instalments over 12 months. 6. CONDITIONS PRECEDENT The acquisitions are subject to, inter alia, the fulfilment of the following conditions precedent: 6.1 competition commission approval, if required; 6.2 statutory and regulatory approvals in RSA, India, Brazil and Zambia; 6.3 written approval of the shareholders in each of the Atlantis Group companies affected by the sale transaction; 6.4 assignment of the major raisebore contracts (or completion of the share sale in respect of the relevant subsidiaries if Master Drilling resolves to proceed on such alternative basis, as provided for under the agreement); 6.5 written approval of any financiers; 6.6 confirmation by the directors of the Atlantis Group that each company in the Group affected by the transactions herein described are solvent. 7. ASSET VALUES AND PROFITABILITY OF THE ACQUISITION The purchase consideration for the assets is below their replacement value, and is predicated on a 4(four) times estimated future profits multiple. As this is a purchase of assets, it is not possible to provide further information regarding the financial effects of the Acquisitions. 8. CATEGORISATION OF THE ACQUISITION The acquisition is classified as a category 2 transaction in term of Section 9.15 of the JSE Listing Requirements and accordingly will not require shareholder approval. 9. FURTHER ANNOUNCMENT Shareholders will be notified once the last of the conditions precedent has been fulfilled. Fochville 4 September 2018 Investment Bank and Sponsor Investec Bank Limited Date: 04/09/2018 04:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.