Photometry alone is not sufficient to unambiguously distinguish between ultra-faint star clusters and dwarf galaxies because of their overlap in morphological properties . Accurate measurements of the intrinsic velocity and metallicity dispersions are required to robustly classify such objects . Here we report on VLT/GIRAFFE spectra of candidate member stars in two recently discovered ultra-faint satellites Reticulum 2 and Horologium 1 , obtained as part of the ongoing Gaia-ESO Survey . We identify 18 members in Reticulum 2 and 5 in Horologium 1 . We find Reticulum 2 to have a velocity dispersion of { 3.22 ^ { +1.64 } _ { -0.49 } { km s } ^ { -1 } } , implying a M / L ratio of \sim 500 . We have inferred stellar parameters ( T _ { eff } , \log { g } , [ Fe/H ] , [ \alpha / { Fe } ] ) for all candidates and we find Reticulum 2 to have a mean metallicity of { [ Fe / H ] } = -2.46 ^ { +0.09 } _ { -0.10 } , with an intrinsic dispersion of 0.29 ^ { +0.13 } _ { -0.05 } dex , and is \alpha -enhanced to the level of [ \alpha / { Fe } ] \sim 0.4 dex . We conclude that Reticulum 2 is a dwarf galaxy . We also report on the serendipitous discovery of four stars in a previously unknown stellar substructure near Reticulum 2 with { [ Fe / H ] } \sim - 2 and { V _ { hel } \sim 220 { km s } ^ { -1 } } , far from the systemic velocity of Reticulum 2 at { V _ { hel } = 64.7 ^ { +1.3 } _ { -0.8 } } km s ^ { -1 } . For Horologium 1 we infer a velocity dispersion of \sigma \left ( V \right ) = 4.9 ^ { +2.8 } _ { -0.9 } { km s } ^ { -1 } and a consequent M / L ratio of \sim 600 , leading us to conclude that Horologium 1 is also a dwarf galaxy . Horologium 1 is slightly more metal-poor than Reticulum 2 ( { [ Fe / H ] } = -2.76 ^ { +0.1 } _ { -0.1 } ) and is similarly \alpha -enhanced : { [ \alpha / { Fe } ] \sim 0.3 } dex . Despite a large error-bar , we also measure a significant spread of metallicities ( \sigma \left ( { [ Fe / H ] } \right ) = 0.17 ^ { +0.20 } _ { -0.03 } dex ) which strengthen the evidence that Horologium 1 is indeed a dwarf galaxy . The line-of-sight velocity of Reticulum 2 is offset by some 100 km s ^ { -1 } from the prediction of the orbital velocity of the LMC , thus making its association with the Cloud uncertain . However , at the location of Horologium 1 , both the backward integrated LMC ’ s orbit and the LMC ’ s halo are predicted to have radial velocities similar to that of the dwarf . Therefore , it is very likely that Horologium 1 is or once was a member of the Magellanic Family .