Transaction between a subsidiary of HCI and certain shareholders of Gold Reef Resorts Limited (“Gold Reef”) pursuant to which the HCI group will increase its indirect interest in Gold Reef (“transaction”)

1. Introduction
HCI has an indirect interest, through various subsidiaries, in 38% of the issued share capital of Tsogo Sun Holdings (Proprietary) Limited (“TSH”). Shareholders of HCI are advised that Mainstreet 581 (Proprietary) Limited (“Mainstreet”), an indirect wholly-owned subsidiary of TSH, has entered into an agreement with certain shareholders of Gold Reef pursuant to which TSH`s interest in Gold Reef will be increased from approximately 4,86% to 19.87% of the issued share capital of Gold Reef (“transaction”). As a result of the transaction,
HCI`s indirect interest in Gold Reef (via TSH) will increase to 7.55%.

2. Rationale
Gold Reef is the holding company of a number of gaming and entertainment entities, comprising:
* The Gold Reef City Casino and Theme Park in Southern Johannesburg, Gauteng;
* The Silverstar Casino in Western Johannesburg, Gauteng;
* The Mykonos Casino in Langebaan in the Western Cape;
* The Garden Route Casino in Mosselbay in the Western Cape;
* The Golden Horse Casino in Pietermaritzburg in KwaZulu-Natal;
* The Goldfields Casino in Welkom in the Free State;
* The Queens Casino, in Queenstown in the Eastern Cape

HCI has publicly stated its intention to increase its investment in gaming related activities. The transaction will assist the HCI group, via TSH, in achieving this objective.

3. Particulars of the transaction

TSH via various subsidiaries including Mainstreet, currently holds 13,5 million shares in Gold Reef.

In terms of the transaction, Mainstreet has agreed to acquire 41,8 million shares in Gold Reef (“Sale Shares”) from certain of the black (as that term is defined in the Broad Based Black Economic Empowerment Act, 53 of 2003) shareholders of Gold Reef (“BEE” shareholders) who currently form part of a Voting Pool, namely Clidet No 754 (Proprietary) Limited, Clidet No 755 (Proprietary) Limited, Parmtro Investments No 95 (Proprietary) Limited, Platoon Trade and Invest 15 (Proprietary) Limited, Reygrande Investment Holdings (Proprietary) Limited, Saddle Path Props 20 (Proprietary) Limited, Saffron Balm Trading 29 (Proprietary) Limited and Y-Investments Limited (collectively “the Vendors”), with effect from the effective date.

Upon implementation of the transaction, TSH will have a beneficial interest in 55,4 million shares in Gold Reef, representing approximately 19.87% of the issued share capital of Gold Reef.

4. Gambling authorities

The transaction is not subject to any suspensive conditions. TSH will, however, make the necessary applications to the relevant provincial gambling authorities for approval of the transaction. Implementation of the transaction is accordingly not conditional upon the aforesaid approvals being obtained from the relevant provincial gambling

5. Purchase consideration
The purchase consideration for the Sale Shares is the aggregate amount of R942 million (R22.50 per Sale Share). The purchase consideration is payable to the Vendors, in cash, as follows:

* 75% on registration of transfer of the share certificates into the name of Mainstreet; and

* the balance, namely 25%, upon receipt of all of the relevant provincial gambling authority approvals. This amount does not attract interest.

The purchase consideration is funded from existing cash resources of the TSH group.

6. Effective date of transaction
The effective date of the transaction will be on registration of transfer of the share certificates into the name of Mainstreet. Gold Reef has sought to prevent this. Further announcements will be made in this regard.

7. Pro forma financial effects
The unaudited pro forma financial effects of the transaction do not have a significant effect on the latest published consolidated audited results of HCI for the year ended 31 March 2008.