Ferrexpo Regulatory News (FXPO)

17 October 2013

Ferrexpo plc

Interim Management Statement

Ferrexpo plc ("Ferrexpo", the "Company" or the "Group") today issues its interim management statement for the third quarter of 2013, in accordance with the UK Listing Authority's Disclosure and Transparency Rules.

Production

For the nine months ended 30 September 2013, pellet production from own ore was approximately 7.8 million tonnes. This represented an increase of 12.0% compared to the same period in 2012, reflecting the production of 1.4 million tonnes of pellets from Ferrexpo Yeristovo Mining ("FYM") ore as the mine continues to ramp up. Total pellet production year to date, including third party materials, was 8.0 million, an increase of 12.5% compared to the same period in 2012. Production of 65% Fe pellets from own ore grew 10.8% compared to 2012 to 3.5 million tonnes.

Sales

Sales volumes of pellets for the nine months to 30 September 2013 were 7.6 million tonnes which represented an increase of 9.0% compared to the same period in 2012. This was slightly lower than production due to timing of shipments. The proportion of sales volume to Traditional markets was 48% while sales to Natural and Growth markets were 18% and 34% respectively, reflecting the Group's focus on developing and maintaining a diversified sales portfolio of crisis-resistant customers. Throughout the period there was strong demand from all market segments.

The average realised price in 3Q 2013 was 4.5% lower compared to 2Q 2013 on a FOB/DAP basis due to the lagging nature of fixed price settlements for a significant amount of volume sold to Traditional markets. In other markets, prices followed the spot price, monthly or 3 monthly index averages (with standard adjustments for quality and pellet premium) as is typical for the respective markets.

During 3Q the Group also continued to reduce freight rates to Asian markets compared to its Brazilian competitors (Yuzhny to Qingdao vs. Tubarao to Qingdao) using predominantly capesize vessels and the Group's wholly owned transhipment vessel. In September 2013, the Group successfully loaded its first vessel of over 200 thousand tonnes dead weight.

Costs

The Group's average C1 cash cost of production for the three months to 30 September 2013 was US$58.2 per tonne compared to the average C1 cash cost year to date of US$60.6 per tonne. The decrease in costs reflects cost efficiencies from higher volumes. As FYM continues to ramp up and the proportion of weathered ore decreases, mining and processing costs are expected to reduce.

Capital Investment

Growth in Pellet Production to 12 million tonnes per annum

Ferrexpo Poltava Mining ("FPM") continues to upgrade and modernise its facilities, and output is rising towards an annualised rate of approximately 12 million tonnes in 2014.

Quality Upgrade Project

The quality upgrade project will improve the average iron content of the Group's pellets to 65% Fe in 2015. The current budget has been increased to include additional scope for tailings facilities and total capex now stands at US$236 million, an increase of US$24 million.

FYM Concentrator Development

The Board of Ferrexpo visited the mining operations in early October and were pleased with the progress that had been achieved at both FPM and FYM. At FYM the new mine is producing 0.7 million tonnes of ore per month and ramping up on schedule.

The Board examined the case for the concentrator at FYM where the business case is considered to be very strong even under conditions where the iron ore price is significantly less than today. It has approved a further US$40 million for site infrastructure including ground works and utilities associated with the concentrator. Further approvals concerning the scope of construction of the concentrator are expected to follow in 2014.

VAT

As of 30 September 2013, US$302 million of gross VAT was outstanding (30 June 2013: US$305 million; 31 December 2012: US$302 million) in Ukraine. VAT has not increased during 2013, however, no VAT outstanding before 2013 has been recovered in the current year.

The cabinet of ministers of Ukraine has recently confirmed the use of treasury promissory notes instead of cash repayment to settle outstanding VAT liabilities incurred before 2013. Final terms and conditions of the issuance are not known at the current time and the Company will make a decision in relation to these notes at the appropriate time when more information is available.

At 30 June 2013, the Group recorded a discount of US$38 million to reflect the time value of money associated with the late recovery of the outstanding VAT balance (31 December 2012: US$20 million).

As of 30 September 2013, prepaid corporate profit tax in Ukraine amounted to US$86 million (30 June 2013: US$65 million). This is expected to be recovered in future years.

The Group's closing cash balance as of 30 September 2013, was US$339 million (30 June 2013: US$446 million) and net debt was US$677 million (30 June 2013: US$566 million), of which, gross outstanding Ukrainian VAT and prepaid corporate profit tax represented US$388 million.

Notes to Editors:

Ferrexpo is a Swiss headquartered iron ore company with assets in Ukraine. It has been mining, processing and selling high quality iron ore pellets to the global steel industry for over 35 years. Ferrexpo's resource base is one of the largest iron ore deposits in the world. In 2012, the subsidiary, Ferrexpo Poltava Mining ("FPM"), produced 9.3 million tonnes of iron ore pellets, while first ore was reached at the new Ferrexpo Yeristovo Mining ("FYM") open pit. Ferrexpo is the largest exporter of pellets in the CIS. The Group has a diversified customer base supplying steel mills in Austria, Slovakia, Czech Republic, Germany and other European states, as well as in China, India, Japan, Taiwan and South Korea. Ferrexpo is listed on the main market of the London Stock Exchange under the ticker FXPO. For further information, please visit www.ferrexpo.com