IFL.L Regulatory News (IFL)

19 July 2011

International Ferro Metals Limited

("IFL" or the "Company")

Interim Management Statement to 19 July 2011 and

Production Report for the three months to 30 June 2011

Highlights:

·; Ferrochrome ("FeCr") production of 42,584 tonnes ("t") for the quarter to 30 June 2011, down 17% on both previous and corresponding quarters due to scheduled shut down of a furnace on 1 June 2011 for roof upgrade

·; Sales of 34,735t achieved in the quarter to 30 June 2011, down 28% from the previous quarter and down 37% on the corresponding period, due to softer demand

·; Net borrowings increased from ZAR213 million at 31 March 2011 to ZAR248 million at 30 June 2011

·; Furnace roof upgrade programme on track and on budget

·; Construction by Anglo Platinum of chrome tailings re-treatment plant on schedule to supply UG2 chrome concentrate from January 2012

·; Sky Chrome mining operations commenced in June 2011

·; Benchmark European FeCr price decreased by 15¢/lb to US$1.20/lb for Q3 ending September 2011

Commenting on the update, Chief Executive David Kovarsky said:

"Industry experts are forecasting a record year for stainless steel production in 2011 and again in 2012, however the third quarter is traditionally weak and we have seen this in lower benchmark prices and reduced output of ferrochrome from the South African producers. This market backdrop, together with substantially higher winter electricity tariffs, reduces the opportunity cost of IFL's reduced production during the roof upgrades, reinforcing management's decision to undertake the work during this period.

IFL's objective is to significantly reduce its costs, moving it to be among the lower cost South African producers. Good progress on the Company's four main current projects, each of which will have a positive impact on our costs and revenue, means IFL is in a much better position to take advantage of higher expected prices in Q4."

Stainless steel and ferrochrome markets

The outlook for stainless steel remains strong with record production forecast by CRU Analysis for 2011 and 2012. However, in the short term, it has been estimated that global stainless steel production fell in Q2 2011 compared to Q1 2011 and this has rippled through to ferrochrome demand. There are four primary reasons for this.

Firstly, a weakness in the nickel price has led to stockists reducing stainless steel inventories in the expectation that stainless steel prices will decline. Quarter 3 is a seasonally weak quarter and this contributes to lower production and inventories. Thirdly, a credit tightening in China has led stainless steel and ferrochrome producers to reduce inventories across the whole product chain of stainless steel, ferrochrome and chrome. Lastly, the uncertainty about the sustainability of the global economic recovery has inhibited buying.

The ferrochrome price for Q3 2011 was set on 11 July and was reduced from $1.35/lb in Q2 to $1.20/lb. This reduction reflected the trend of global spot prices being under pressure in the lead up to the price settlement.

Chrome ore demand and prices have followed ferrochrome demand with prices falling during the quarter.

Balancing this traditional weakness in the third quarter is the strong outlook for the year and next year. CRU is forecasting record stainless steel production for 2011 and again for 2012, increasing from 31.7Mt in 2010 to 33.5Mt in 2011 (+5.5%) and to 36Mt in 2012 (+7.6%). Real demand for stainless steel remains healthy and CRU expects the fourth quarter to be strong for melted production. This gives the Board confidence that, combined with IFL's four major current projects, the outlook for the ferrochrome market remains attractive and that IFL is better positioned to benefit from forecast growth.

Mining

Total mined tonnages from the Lesedi mine increased from 194,000t in the previous quarter to 198,000t in the quarter ended 30 June 2011. Recoveries from the ore beneficiation plant continued to increase with an average of 65.7% recovery compared to 64% in the previous quarter.

Open pit mining operations at Sky Chrome commenced during June 2011 and run-of-mine ore production, totalling almost 7,000t in June 2011, is being stockpiled. First delivery of ore to the IFL plant is now scheduled for the last week of July, at which time sufficient ore stock balances for economic transport will be achieved.

Sky Chrome is a substantial deposit with 12Mt of open pit recoverable reserves in the MG1, 2, 3 and 4 seams and 104Mt total resources, of which 56Mt is in reserve categories. The build-up of production at Sky Chrome will enhance the Company's cost base as the open pit mining costs are significantly below those at Lesedi underground mining.

Excluding the mining contractors, Sky Chrome will provide employment for one hundred community members in its mining operations (eighty appointed) and for an additional one hundred community members in an agricultural project adjacent to the mining operations. The agricultural project is part of IFL's ongoing corporate responsibility projects including focus on its local community.

Smelting

Production for the quarter ended 30 June 2011 of 42,584t was 17% lower than the quarter to 31 March 2011 of 51,446t and in line with previous guidance. Installation of the first furnace roof is progressing smoothly and nearing completion. Switch-in is expected at the beginning of August and the furnace should achieve full production from mid September, as previously announced.

The second furnace was shut down on 8 July to begin preparatory work. Its new roof should be installed towards the end of August with switch-in expected at the beginning of September. The furnace should achieve full production from mid October, as planned.

As previously announced, the company expects production at around 27,000t to 31,000t for the quarter ending September 2011, subject to successful and timely installation of the furnace roofs and recommencement proceeding as planned.

The achievement of nameplate production volumes is expected to decrease unit fixed costs by an estimated 3.0¢/lb after the roof upgrades are completed.

Co-generation plant

As previously announced, the co-generation plant continues to operate at a minimal level. Off-gas consistency is expected to be achieved once the furnace roofs have been replaced which should allow the co-generation plant to operate at full capacity. While the furnace upgrade project is on-going the co-gen engines are being continually tested with the objective of achieving full co-gen capacity efficiently following the furnace restart. The co-generation plant and improved electricity consumption are expected to reduce costs by 2.3¢/lb after the furnace roof upgrades.

UG2 Plant

Construction of the UG2 Chrome Re-Treatment Plant ("CRP") at Anglo Platinum's operations is on schedule, with commissioning expected to commence during September. The first feed of 15,000t chrome concentrate is expected in January 2012 and is expected to reduce costs by an estimated 3.0¢/lb from that date.

The UG2 supply agreement with Anglo Platinum entitles IFL to 15,000t of concentrate per month (almost 30% of IFL's beneficiated ore requirements) from commissioning of the plant until November 2020. The cost per tonne of concentrate is significantly below the Company's in-house cost of concentrate production. There are no additional costs other than the cost of transporting the concentrate to IFL's facilities at Buffelsfontein, which is about 50km from the CRP, and any government royalties that may be payable.

Sales and inventory

Ferrochrome sales for the quarter ended 30 June 2011 were 34,735t compared to 48,420t in the previous quarter. Reduced chrome ore demand resulted in 66,137t being sold in the quarter compared to 106,137t in the previous quarter. Ferrochrome inventories were 25,276t at 30 June 2011 compared to 17,315t at the end of the previous quarter. This increase was planned to coincide with the furnace shutdown so that the Company has sufficient stock to service the market during the furnace upgrade project.

Cash

The Company's net borrowings increased to ZAR248 million at 30 June 2011, against net borrowings of ZAR213 million at 31 March 2011. IFL continues to operate within its banking arrangements.

Outlook

Management's objective is to move IFL significantly down the South African cost curve and it is actively pursuing all methods to do so.

The start-up of Sky Chrome is the first milestone that will make IFM more cost competitive. The company has a high degree of confidence that the furnace roof upgrades, co-generation and UG2 projects will be successfully implemented by the end of 2011 and the company will then be in a position to take full advantage of underlying stainless steel demand that should reflect record volumes in 2012.

There are additional opportunities to further reduce IFL's costs, such as increased anthracite usage which is expected to reduce costs by 2.0¢/lb and through fine tuning operations from September 2011 after roof upgrades, reducing overheads and reducing maintenance costs.

Other than as detailed above in this Interim Management Statement and Operational Update released today, there have been no material events or transactions in the period from 1 July 2011 to 19 July 2011.

- 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.