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Trading statement and production announcement for the six months ended 30 June 2013
Merafe Resources Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1987/003452/06)
JSE share code: MRF
ISIN: ZAE000060000
(“Merafe” or “the Company”)
Trading statement and production announcement for the six months ended 30 June 2013
Trading statement
In terms of the JSE Limited Listings Requirements, issuers are required to publish a trading
statement as soon as they are satisfied that a reasonable degree of certainty exists that the
financial results for the period to be reported on next will differ by at least 20% from those of
the prior comparative period.
Shareholders are advised that Merafe is expecting to report the following results for the six
months ended 30 June 2013:
• Basic earnings per share of between 1.2 cents and 1.4 cents, compared to 5.5 cents for
the 2012 comparative period;
• Headline earnings per share of between 3.5 cents and 4.0 cents compared to 5.5 cents
for the 2012 comparative period.
The basic earnings per share for the six months ended 30 June 2013 is lower than the
comparative 2012 period primarily as a result of an impairment loss recognised. The
impairment loss has arisen as a result of the Glencore-Merafe Venture (“Venture”)
considering the sale of the Horizon mine as part of its on-going asset portfolio review and due
to having sufficient ore availability. The sale of the Horizon mine, if concluded, would not
impact on Merafe’s participation interest in the Venture and the proceeds from such sale
would accrue to the Venture partners in accordance with their participation interests.
Update on cash balance and debt
Merafe closed with a cash balance of R47m and had long-term debt owing to ABSA Capital
of R560 million at 30 June 2013.
Shareholders are advised that the financial information on which this trading statement is
based, has not been reviewed or reported on by Merafe`s external auditors and is provided in
terms of paragraph 3.4(b) of the JSE Limited Listings Requirements.
The financial results for the six months ended 30 June 2013 are expected to be released on
SENS on 6 August 2013.
Production announcement
Ferrochrome production for the first six months of 2013 was 23% higher than the
comparative 2012 period. Operating capacity utilisation for the first six months of 2013 was
79% compared to 64% for the prior comparative period. This was primarily as a result of
operational improvements of furnaces, additional winter month production and the impact of
the successful commissioning and ramp up of the Tswelopele pelletising plant. Ferrochrome
production volumes in the first half of 2013 were also impacted by the Eskom power buyback
agreement as in the 2012 comparative period.
The average European benchmark ferrochrome price for the third quarter of 2013 was settled
at 112.5USc per pound which was 11% lower than the 127USc per pound price in the second
quarter of 2013.
Ferrochrome production attributable to Merafe for the six months ended 30 June 2013 was as
follows:
Six months Six months Year ended
ended ended 31 December
30 June 2013 30 June 2012 2012
Ferrochrome production (kt) 145 118 242
Indicative average published price (USc/lb -
Metal Bulletin) 120 125 121
24 July 2013
Sandton
Sponsor:
Merrill Lynch South Africa Proprietary Limited
Date: 24/07/2013 08:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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