IFL.L Regulatory News (IFL)

25 April 2013

International Ferro Metals Limited

("IFL" or the "Company")

Interim Management Statement to 25 April 2013 and

Production Report for the three months to 31 March 2013

Highlights:

·; Ferrochrome ("FeCr") production of 34,172 tonnes ("t") for the quarter, as expected, given one furnace is participating in Eskom electricity buy-back agreement

·; Eskom buy-back agreement from 15 February to 31 May 2013

·; Six week shutdown of Furnace 1 for maintenance work; efficient ramp up to full load during March

·; FeCr sales of 41,630t, mostly to Europe, with the reduced production because one furnace participating in the Eskom buy-back agreement

·; Ore sales of 98,000t as inventory was managed to optimise working capital

·; Co-gen plant production 5.3GWh of electricity for the quarter, 4.1% of total requirement and in excess of 10% at end of quarter

·; 18% of targeted production cost savings achieved for the quarter; on track to reach target by financial year end

·; Net borrowings decreased from ZAR436 million at 31 December 2012 to ZAR425 million at 31 March 2013

·; Zero fatality track record maintained and further significant improvement in overall safety performance

·; Operations cash generative for the quarter

Post period highlights:

·; Positive market developments as the European Benchmark Price for Q2 of calendar 2013 increased by 14.5¢ to US$1.27/lb.

·; Furnace 1 continues to operate at full load

·; Co-gen generating 10% of total power requirement

Commenting on the operational update, Chief Executive Chris Jordaan said:

"I am pleased with our performance this quarter. Operations have remained cash generative and in line with expectations given the fact one furnace was shut down as part of Eskom's electricity buy-back programme. Ferrochrome sales were consistent with the one furnace in operation and were directed primarily to Europe where we saw higher prices. I am very pleased that we had our first sale to our newest market, India, as a result of our marketing effort there. This has been augmented by a repeat sale in the June 2013 quarter. We took advantage of the larger ore stockpile and sold more ore into a supportive market thereby reducing working capital.

Next quarter, we will restart the second furnace and head closer to achieving the full extent of the cost savings. Our targeted marketing effort will continue to maximise prices as we deliver against contracts, and the weaker Rand and less than expected electricity price rises will continue to be beneficial for the Company."

Stainless steel and ferrochrome markets

Although demand for stainless steel is showing a slow and variable recovery across the world, the overhang in supply, especially from China, is still dominating the market. Stainless steel producers in Europe are finding themselves in challenging times as they balance the stagnant demand in Europe with maintaining their market share in an environment of rising and cheaper imports from Asia.

Turning to the ferrochrome market, lower supply from South Africa has resulted in higher price settlements outside China and drove a higher European Benchmark Price, as South African producers shut furnaces to take advantage of electricity buy-back agreements and avoid higher costs from rising electricity prices ,

There continues to be a tight spot market as South African producers deliver on long term contracts at the expense of the spot market given the lower production and higher cost dynamic.

The demand and supply in China has been balanced however stainless steel producers have been quoting lower FeCr spot prices in recent weeks.

Health and Safety, and the Environment ("HSE")

The Company had no fatalities during the quarter and remains fatality free since inception, representing 24.2 million fatality free man hours which equates to 3 million fatality free shifts as at 31 March 2013. The 12 month moving average lost time injury frequency remained stable from 1.83 at 31 March 2012 to 1.84 at 31 March 2013 as the Company continues to focus on HSE and continually improves training.

No significant environmental and health incidents were reported in the period under review.

Mining

Lesedi Underground Mine is currently under review as previously reported and this is expected to be completed by the end of the financial year. The tender process for mining contractors is underway and a number of submissions have been received and will be evaluated over the next quarter.

Production at Sky Chrome was 83,000t which was lower than the prior quarter in line with the ore requirements for lower alloy production from one furnace. Production was further affected over the quarter as mining operations intersected a pothole (an area within the seam devoid of mineralisation) in the MG2 seam which reduced beneficiation recovery rates. A comprehensive drilling programme has been undertaken to define the extent of the pothole and the mine plan will be revised to optimise recoveries as a result of the pothole. We expect to reduce production to approximately 35,000t in the June 2013 quarter, with the shortfall fully covered by material from a combination of stock piles, the UG2 supply agreement, and buying-in inexpensive ores which are readily available in the market. Following the revision of the mine plan, mining will be ramped up over the September quarter 2013 and recoveries are expected to increase as the new mine plan is implemented .

Smelting

FeCr production for the quarter was 34,172t compared with 52,143t in the prior quarter. The lower production was as a result of the Furnace 1 shut down on 18 January 2013 for taphole maintenance and the Eskom electricity buy-back agreement from 15 February 2013. The taphole repair work was completed on 15 February 2013 at which time participation in the energy buy-back agreement commenced. Furnace operations have stabilised with March output from the one operational furnace in line with expected levels.

Given the improved electrode performance and repeated successful restarts, management expects the restart of the second furnace to be safe and efficient, following the Eskom power buy-back period which ends on 31 May.

Co-generation plant

During the quarter, the Cogen plant generated 5.3GWh of electricity which represents 4.1% of the Company's total electricity requirement.

With operations stabilising on the single furnace configuration during the Eskom power buy-back period, power generation improved significantly and in excess of 10% of the current electricity requirement was generated during the latter part of March, which continued into April.

With both furnaces operating at full production, the Cogen plant is expected to provide the Company with approximately 11% of its total energy requirements.

UG2 supply agreement

In 2010, IFL signed an agreement with Anglo Platinum to receive 15,000t per month of UG2 chrome concentrate until 2020 from the recovery of chrome in the UG2 tailings from Anglo Platinum's Waterval Concentrator in Rustenburg. This is a beneficial agreement which delivers a cost per tonne of concentrate from the Chrome Recovery Plant (CRP) which is significantly below the Company's in-house cost of concentrate production.

As previously reported, this supply was temporarily interrupted in mid-October 2012 as a result of strike action at Anglo Platinum's operations. With the resumption of mining activity at Anglo Platinum towards the end of last year the supply process resumed, and as part of the contract, Anglo Platinum is required to make up any losses in tonnage incurred at a rate of an additional 5,000t per month. The back-log at 31 March has reduced to less than one month's supply.

Sales and inventory

FeCr sales for the quarter to 31 March 2013 were down 19% to 41,630t compared with 51,092t for the previous quarter due to only one furnace being in operation as a result of the Eskom buy-back programme.

Alloy sales have been primarily to Europe with some contractual sales going to the USA. Alloy was also sold into India as initial market development activity.

FeCr inventory was 8,358t at 31 March 2013 from 15,815t at 31 December 2012. Management expects to reduce stocks to approximately 6,000t during a single furnace operation and restore stocks to approximately 10,000t when both furnaces are operating at full production.

Higher ore sales for the quarter were 98,000t compared with 33,000t for the previous quarter, as a result of working capital management. With one furnace shut down over the quarter, ore demand for the furnaces was reduced significantly. This combined with the increased tonnage coming from the UG2 Plant as reported above, and higher ore stockpiles, enabled the Company to reduce working capital by selling ore into a receptive market.

Cost reduction programme

Ferrochrome production cost for the quarter decreased to ZAR6.30/lb from ZAR6.38/lb in the prior quarter primarily due to lower reductant prices and a higher ratio of cheaper metal recovery plant volumes to furnace volumes. The Company is targeting total cost reductions of ZAR0.76/lb on FY2011 production cost of ZAR6.25/lb. These targets strip out changes in unit electricity and reductant prices, which are outside management's control and affect all other South African producers.

On an adjusted basis, this quarter's production cost was ZAR6.12/lb compared with ZAR6.04/lb for the previous quarter. The increase was mainly due to lower anthracite usage during the furnace ramp up.

This quarter's cost reduction performance represents only 18% (ZAR0.13/lb) of the target but management is confident that the cost reduction target will be achieved when both furnaces are back in operation over next quarter.

The cost reduction in March has been significant and bodes well for the full 2 furnace operation. Reductant cost, fixed costs and throughput, augmented by significantly improved electrode performance, gives management confidence in achieving the cost reduction targets.

Cash

The Company's net borrowings decreased to ZAR425 million at 31 March 2013, against net borrowings of ZAR436 million at 31 December 2012. Cash from operations (before working capital changes) generated ZAR5 million, financing activities utilised ZAR8 million, investing activities utilised ZAR29 million and working capital generated ZAR44 million.

The expiry date of the working capital facility with Bank of China has been extended by two months to 21 August 2013 to adhere with the contractual terms regarding the signature date of 21 August 2012.

Outlook

Demand for stainless steel and ferrochrome in Europe and Asia is expected to remain relatively flat over the near term while lower supply from South Africa is anticipated to continue as producers take advantage of electricity buy-back programmes and cost increases going into the winter months.

In this benign environment, the outlook for IFL is positive. The Company's operations are stable and the cost reduction programme is on track to reach the target by the end of the financial year. The Company is also delivering product against its contracts to Europe, thus taking full advantage of higher prices.

The recent announcement by the National Energy Regulator of South Africa (NERSA) approved electricity increases of only 8% p.a. over the next 5 years, which is approximately half of what was expected by the market, coupled with the current weakness of the Rand, improves the competitiveness of the South African ferrochrome industry.

Analyst / investor Conference call

Management will discuss these results in a conference call with the investment community today, Thursday 25 April 2013, at 08.30am (London). Dial in details are below:

Dial in: +44 (0) 1452 555 566

Pin code: # 50481011

- ENDS-

For further information please visit www.ifml.com or contact:

About International Ferro Metals:

International Ferro Metals produces ferrochrome, the essential ingredient in stainless steel, from its integrated chromite mine and ferrochrome processing operations in South Africa. International Ferro Metals is listed on the London Stock Exchange under the symbol IFL.

Forward Looking Statements

This announcement contains certain forward looking statements which by nature, contain risk and uncertainty because they relate to future events and depend on circumstances that occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements.