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CHROMETCO LIMITED - appointment of IFM for mining services and withdrawal of cautionary

Release Date: 10/10/2014 15:28
Code(s): CMO     PDF:  
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appointment of IFM for mining services and withdrawal of cautionary

CHROMETCO LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2002/026265/06)
(JSE Code: CMO        ISIN: ZAE000070249)
("Chrometco" or "the Company")

APPOINTMENT OF INTERNATIONAL FERRO METALS (SA) PROPRIETARY
METALS (“IFM”) FOR MINING SERVICES, ORE SALE AGREEMENT AND
WITHDRAWAL OF CAUTIONARY

1.    Introduction

      Chrometco Shareholders (“Shareholders”) are referred to previous cautionary
      announcements, the last of which was dated 29 September 2014, wherein they
      were advised that the Company had entered into negotiations with IFM, with a view
      to concluding mining services and ore sale agreements. In terms of the first phase
      of the negotiations, IFM was permitted to conduct exploratory drilling in specified ore
      blocks at the Rooderand Mine, which is held by Chrometco’s subsidiary, Rooderand
      Chrome Proprietary Limited (“Rooderand”).

      Pilanesberg Mining Co Proprietary Limited (“Pilanesberg”), a subsidiary of
      Chrometco, is the holder of the mining rights which entitles it to conduct mining in
      respect of the Rooderand Mine for its own benefit.

2.    Mining services and ore sale agreement

      The Board of Directors of Chrometco are pleased to report that Chrometco, via its
      Pilanesberg and Rooderand subsidiaries , has entered into agreements with IFM on
      10 October 2014 (“the Agreements”) in respect of the LG6 chromite seam (“Mineral
      Seam”) at Rooderand as follows:

2.1        Mining services

      IFM has been appointed to conduct mining services by Pilanesberg, and shall, in
      accordance with an agreed mining plan, be entitled to mine the Mineral Seam
      either:-

2.1.1     until such time as it shall have mined a total of 200 000 tonnes of ore ; or
2.1.2     for a period of 12 months from date of signature of the Agreements; or
2.1.3      until the Mineral Seam has been mined out;

      whichever occurs first (“Mining Services Agreement”).

2.2      Ore sale agreement

In terms of the ore sale agreement, Pilanesberg shall exclusively sell to IFM, which shall
purchase from Pilanesberg, all ore produced from the Mineral Seam pursuant to the
Mining Services Agreement.

Consideration

In terms of the Agreements, Chrometco will receive a portion of the net profits per tonne
of the ore mined, after deduction of all mining costs. This amount may vary between a
minimum of R25.00 and a maximum of R65.00 per tonne, depending on the chromite
content and impurities of the ore.

Mining activities are expected to commence during October 2014.

Withdrawal of cautionary

Shareholders are advised that caution is no longer required when dealing in their
Chrometco securities.

Johannesburg
10 October 2014

Designated Advisor: Sasfin Capital
(A division of Sasfin Bank Limited)

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