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CMO - Chrometco Limited - Resource Update

Release Date: 10/05/2011 17:30
Code(s): CMO
Wrap Text

CMO - Chrometco Limited - Resource Update CHROMETCO LIMITED (Incorporated in the Republic of South Africa) (Registration number: 2002/026265/06) (JSE Code: CMO ISIN: ZAE000070249) ("Chrometco" or "the company") RESOURCE UPDATE Further to the SENS announcement dated 12 January 2011, Chrometco has revalued its Rooderand chrome mineral assets based upon an independent review of the original mineral resource statements prepared in late 2010. The latest mineral resource statement includes chromite tonnages that are classified as Exploration Results at a lower level of confidence compared to previously defined Inferred Mineral Resources, as defined in the SAMREC Code. The attributable monetary value for Exploration Results is substantially (JSE definition >20%) lower than for Inferred Mineral Resources. The revised valuation has taken the confidence levels into account and the lower value is being reported. However, future drilling will be required to raise the level of confidence of the Exploration Results to the Inferred Mineral Resource classification Considering all available data, the Competent Person concluded that the SAMREC compliant mineral resources within the tenement held by Chrometco comprises the work completed by DCM as illustrated below. Indicated Mineral Resources - DCM Area - Mineral Corp. 2008 - SAMREC Compliant Unit Tonnes Grade Cr2O3 Cr2O3 Content (%) (tonnes) LG5, LG6, 2,008,958 37.10 745,244 LG7, MG2, MG3, MG4 LG6, MG4A 6,662,671 39.42 2,626,098 Total 8,671,629 39.00 3,371,342 The drilling completed by others , outside of DCM`s project area, has provided sufficient information to demonstrate continuity of the chromite seams. This has enabled Mr. Bleeker to map the various chrome seams. Given that no actual chrome samples have been taken, or assayed, the Competent Person concluded that only the tonnages should be tabulated herein. The figures presented below, have been categorized as Exploration Target. Exploration Target - Balance of DCM Area - Not SAMREC Compliant (April 2011) Unit Tonnes LG6 20,477,000 LG5 16,591,459 MG4A 14,063,164 Total 51,131,623 Independent Valuation Due to the re-classification of the resources, Venmyn amended its independent valuation of the Rooderand asset. Venmyn applied both the cost and market valuation approaches to value the asset. The SAMVAL Code definition states that the cost approach relies on historical and/or future expenditure on the Mineral Asset. A Prospectivity Enhancement Multiplier ("PEM") is a factor applied to the total cost of exploration, at different stages of exploration and project advancement. The magnitude of the PEM is determined by the level of sophistication of the exploration for which positive exploration results, applying the concept of successful efforts, have been obtained. Using the cost approach and a total historical and future amount of ZAR2.7m spent on the asset by Chrometco, as well as a PEM for historical mining of 5, Venmyn determined: a "fair" (attributable) value for the Project of ZAR13.5m; and using a 10% deviation around the "fair" value, an upper and lower value of ZAR14.85m and ZAR12.15m is determined, respectively. In valuing the Project, using the market approach, Venmyn made use of a comparative valuation graph, consisting of a database of various, similar, "arm`s length" transactions, which are plotted in relation to their specific stage of exploration (the Venmyn Chromite Valuation Curve). Using the Venmyn Chromite Valuation Curve, Venmyn determined a "fair" value of USD1.02/t and an upper and lower value range of USD1.44/t and USD0.59/t, respectively. To calculate the total project value, the contained Cr2O3 tonnes per Mineral Resource category are multiplied by the unit values. Using the market approach and a total Exploration Result and indicated resource Cr2O3 content of 23.265Mt and 3.371Mt, respectively, and spot exchange rate on 4th April 2011 of ZAR6.70/USD, Venmyn determined: a "fair" (attributable) value for the Project of ZAR181.53m; and an upper and lower value of ZAR257.11m and ZAR105.96m, respectively. Concluding Opinion Since the market approach relies on similar, recent, "arm`s length" transactions, the Competent Valuator prefers the valuation results of the market approach. The concluding opinion of value (attributable) is based on the market approach as shown above. Statement All requirements of the SAMREC Code (including Table 1), and the SAMVAL Code (including Table 2) have been complied with in preparing the full CPR report which will become available as part of the planed circular to shareholders. Johannesburg 10 May 2011 Designated Advisor Sasfin Capital (a Division of Sasfin Bank Limited) Independent Competent Valuator Venmyn Competent Person Independent Resource Estimations Date: 10/05/2011 17:30:01 Supplied by www.sharenet.co.za 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.

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