IFL.L Regulatory News (IFL)

20 February 2012

International Ferro Metals Limited

("IFL" or the "Company")

Interim Financial Results for the half year to 31 December 2011

Highlights

Financial highlights

·; Ferrochrome sales of 100,318 tonnes ("t"), down 3% on comparative period but up 21% on the previous half

·; Ore sales volume of 156,983t, up 35% on comparative period but down 9% on the previous half

·; Lower production volumes resulted in a loss before tax of ZAR139 million, compared with a loss of ZAR160 million for the comparative period and a loss of ZAR54 million in the previous half

·; Net borrowings of ZAR458 million at 31 December 2011, compared to ZAR248 million at 30 June 2011

·; No interim dividend declared

·; Operations expected to be cash generative in Q1 2012

Operational highlights

·; Furnace roof refit successfully completed, on time and within budget

·; Sky Chrome mine successfully commissioned and ramping up to plan

·; Production volumes down 15% to 85,779t on comparative period due to furnace shut downs for roof rebuilds

·; Production cost down ZAR0.10/lb, mainly due to furnace roof repair and increased use of cheaper reductant

·; FeCr inventory reduced to 10,737t, down from 25,275t at 30 June 2011

·; Good performance from underground and open pit mining

·; Electricity co-generation plant Engine 1 successfully converted to operate at higher hydrogen levels.

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

Post period highlights

·; Ferrochrome market showing recovery amidst low inventory levels

·; Rand has strengthened in January and February 2012

·; Net borrowings at 31 January 2012 improved to ZAR440 million

·; Construction by Anglo Platinum of UG2 chrome tailings re-treatment plant now complete, first concentrate already produced, first feed expected this month

·; Four out of ten co-generation plant engines currently operating at design capacity

Chris Jordaan, Chief Executive Officer of IFL commented:

"IFL has seen genuine operational achievements during the half year, including the successful completion of the furnace roof rebuild on time and on budget and commencement of mining and successful ramp-up at our new Sky Chrome mine. In addition we progressed a number of efficiency and cost-saving projects including the modification of the cogen plant, the commissioning of the UG2 plant and the commissioning of the waste recovery plant.

Stronger sales reflect our success in embedding a diversified customer base across a range of regions, including in South East Asia and North America. Ore sales are expected to increase and to contribute to profitability.

Cost savings continue to be a focus for the Company, with initiatives completed or underway across smelting, mining and inputs including power and chrome concentrate. The Company has already achieved 27% of targeted production cost savings and are on track to hit the target of ZAR0.76/lb on FY2011 production costs within the current financial year.

The combination of solid operations, active marketing to a broader range of customers and cost savings should place IFL in a healthy position to take full advantage of the robust long-term outlook for stainless steel."

There will be a presentation to analysts of the interim results today, Monday 20 February 2012 at 09.00am (UK time) at 16 Lincoln's Inn Fields, London WC2A 3ED. The presentation slides and a recording of the presentation will be available on the Company's website.

Dial in details:

UK / International +44 (0) 1452 541 076

Conference ID 50946528

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

International Ferro Metals Limited Tel: +27 14 574 6302

Chris Jordaan, Chief Executive Officer

Brunswick Group Tel: +44 (0) 20 7404 5959

Carole Cable / Fiona Micallef-Eynaud

Numis Securities Limited Tel: +44 (0) 20 7260 1000

James Black / Stuart Skinner / Alastair Stratton

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 their 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.

Operational Review

Ferrochrome Market Review

Global stainless steel production grew to an estimated level of 32.7 million tonnes in calendar year 2011, an increase of approximately 3% from 2010, according to CRU. Stainless steel production varies by geographic area, with Asia continuing to show growing strength. China accounted for approximately 39% of global production and although the United States experienced high utilisation levels it still represents only 8% of world production. Europe, which represents approximately 23% of global production, showed sluggish growth.

Stainless steel is anticipated to maintain a growth trend of approximately 4-5% in 2012, according to CRU. Although the ferrochrome benchmark price decreased by 5¢/lb to $1.15/lb for the first calendar quarter of 2012, spot prices are showing positive signs in response to low inventories and firmer demand.

Sales and inventory

The Company achieved ferrochrome sales of 100,318 tonnes in the six months to 31 December 2011, compared to 83,156 tonnes in the previous half, but marginally down (3%) on the same period last year due to lower production rates. IFL's higher sales than the previous half were achieved as the Company reached a good balance between sales and production in this period, reducing inventory, resulting in optimum stock levels being achieved.

Ferrochrome inventory was reduced to 10,737 tonnes at 31 December 2011, less than a month's supply, and is expected to remain at these levels in the medium term.

Ore sales for the six months to 31 December 2011 reached 156,983 tonnes compared to 172,247 tonnes sold during the preceding six months, but well above the 115,971 tonnes sold during the comparative period, when a similar quantity of ferrochrome was produced. Going forward, with UG2 supplementing the availability of beneficiated ore, ore sales is expected to increase and contribute to profitability; the additional ore will be sold to China

The Company has been successful in embedding a diversified customer base across all regions with new sales initiatives in both South East Asia and North America. IFL continues to build on and strengthen its active marketing approach and during the half it has won additional business in the USA and achieved higher volumes in the Company's existing Asian markets.

Smelting

The furnace roof rebuild project was successfully completed on time and on budget in this period, with the two furnaces being switched in during August and September respectively, and ramping up to full load in September and October 2011, respectively. Both the steel furnace roofs were replaced with copper roofs and the number of feed chutes were increased from seven to nine per furnace. No leaks have subsequently been experienced and furnace availabilities have increased from an average 90% prior to the roof rebuilds to circa 98%.

Management were pleased with the final outcome and have since seen significant operational improvements, in particular around costs and efficiencies. Improved uptime and stable operations resulted in improved efficiencies, and increased usage of anthracite in reductant mixes positively impacted production costs. Both furnaces operated at full load after start-up, at throughput levels which compare favourably to previous records. The Company expects its first full production quarter in Q1 of calendar 2012.

Mining

During the half year under review the Company went from a single-site operator, to mining a second site at Sky Chrome, which is currently ramping up in line with plans. Production is planned to be ramped up to in excess of 50,000 tonnes per month. The ore will be transported to the IFL beneficiation plant at Lesedi.

Open pit mining operations at Sky Chrome are progressing to plan with run-of-mine production of 44,000 tonnes for the month. Mining is expected to ramp up to in excess of 50,000 tonnes per month run-of-mine by April 2012.

Lower beneficiation recoveries are being experienced as a result of the levels of oxidisation on the shallower ore. The recoveries should improve as operations reach unweathered ore beyond 10 meters below surface. This trend is already evident at a 10 meter depth; we are already seeing better quality ores as mining moves into fresher, deeper material.

Due to the proximity of open pit operations to local communities, blasting techniques are designed to ensure that no evacuation of any residential property would be required during blasting operations. Blasting to date has not drawn any adverse reaction from the surrounding communities.

The six month period to December 2011 experienced stable production from the Lesedi underground operations. Run-of-mine production averaged 27,000 tonnes per month, and it is expected to remain at these levels. The focus for the next twelve months will be on ore reserve development in order to create flexibility and to enable operations to increase to 60,000 tonnes per month over the next 36 months. The Lesedi open pit mining operations will terminate by the end of the financial year, development of the underground mine at Lesedi will continue for the foreseeable future.

The waste recovery plant was commissioned in November 2011, and it is expected to produce chrome concentrate at a rate of 4,000 tonnes per month. The plant will treat the historical coarse waste dumps and current arisings for the next 2 to 3 years and then treat only the current arisings, decreasing the output to circa 2,000 tonnes per month. Including the UG2 supply from Anglo Platinum, IFL is now firmly self-sufficient on ore supply.

Co-generation plant

The co-generation ("cogen") plant was commissioned in Q1 of 2011 but operated at minimal levels prior to and during the furnace roof rebuild. The hydrogen content in the off-gas increased after the furnace roof rebuilds, which necessitated engine modifications. Engine 1 was successfully modified during the period to operate at these elevated hydrogen levels. Subsequent to 31 December 2011, an additional three engines were modified and all four modified engines have been running at design capacity. These modifications are now being implemented on the remaining six engines and are expected to be completed during Q2 of this calendar year, at a cost of ZAR1.2 million per engine.

During the six months to 31 December 2011 the cogen plant generated 16.8GWh of electricity which represents 4.8% of the Company's total electricity requirement for the period. At full production the cogen plant should provide approximately 11% of the Company's total energy requirements.

UG2 Plant

In February 2010, IFL entered into an agreement with Rustenburg Platinum Mines Limited ("RPM") a subsidiary of Anglo Platinum Limited, for the construction of a Chrome Re-Treatment Plant ("CRP") to treat the tailings arising from RPM's UG2 concentrator, situated at their Waterval section. The cost to IFL of the plant construction is ZAR161 million of which ZAR152 has already been paid. The CRP's primary objective is to extract chrome concentrate from the tailings, allowing IFL to reduce its input cost to below its in-house cost of concentrate production as there are no additional costs other than transport and potential royalties.

Construction by Anglo Platinum of the CRP at Anglo Platinum's operations is now complete and the plant has been commissioned. The first UG2 chrome concentrate has been produced in the first week of February. The Company expects that the first feed of UG2 will be received in February 2012.

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

Once again, IFL has had no fatalities in this period and therefore upholds its fatality free record since inception, representing 20.1 million fatality free man hours. This equates to 2.52 million fatality free shifts as at 31 December 2011. No health impact incidents were reported.

The Company remains committed to its focus on HSE and strives to keep its clean record and the highest standards. The 12 month moving average lost time injury frequency improved further from 4.88 at 31 December 2010 to 2.71 at 31 December 2011 as the Company continues to focus on HSE and to continually improve training.

No environmental incidents were reported in the period under review.

Financial Review

The Company reported a loss before tax of ZAR139 million for the six months ended 31 December 2011 ("the period") against a loss of ZAR54 million in the previous six months and a loss of ZAR160 million for the comparative period. This was principally driven by lower production due to the furnace roof rebuilds, and low ferrochrome prices.

During June and July 2011 both furnaces were switched out respectively for roof rebuilds. This resulted in significantly lower ferrochrome production of 85,779 tonnes for the period against 94,030 in the previous six months. Sales volumes were however higher at 100,318 tonnes compared with 83,155 tonnes for the previous six months, reflecting IFL's active marketing programme and increasingly diversified customer base.

The average European benchmark ferrochrome price for the period was 10¢ lower than the previous six months at US$1.20/lb. Towards the latter part of 2011, as the Eurozone crises intensified, achieved ferrochrome prices and especially chrome ore prices came under pressure. This was offset by a weakening of the Rand against the U.S. Dollar.

The operating margin improved from negative 6% in FY2011 to negative 1% for the period. Excluding ore sales, operating margin was positive 3%. Monetisation of lower grade ore sales continued and a total of 157,000 tonnes were sold during the period, contributing ZAR76 million to revenue.

The Company's net borrowings increased to ZAR458 million at 31 December 2011, from ZAR248 million at 30 June 2011. This increase was mainly due to operations that utilised ZAR85 million and capital expenditure of ZAR120 million.

Capex mainly comprised ZAR56 million for the furnace roofs, ZAR36 million for the UG2 plant, ZAR14 million for the electrical sub-station and ZAR10 million for mining development. Net cash outflows from operations before changes in working capital was ZAR70 million, of which ZAR79 million was utilised in the first quarter when the furnace roofs were being rebuilt and ZAR9 million was generated in the second quarter when furnace production was ramping up.

Forecast capital expenditure for the second half of the year is ZAR88m which includes ZAR50 million for mining development (Lesedi & Sky Chrome), ZAR11 million for the cogen modifications and the final ZAR10 million for the UG2 plant.

The Company maintains a conservative interest bearing debt to equity ratio of 25% and continues to operate within its banking facilities. At current Rand/U.S. Dollar exchange rates and FeCr prices operations are expected to be cash generative in the coming quarter. Cash generation is also expected to improve as further targeted production cost savings are achieved.

The Company's major shareholder, JISCO, has agreed to provide a guarantee for a short-term banking facility and documentation is being prepared.

EBITDA loss for the period was ZAR73 million against a loss of ZAR99 million for the comparative period and a profit of ZAR27 million for the previous six months. The positive tax charge of ZAR47 million to the income statement is a deferred tax credit resulting from the Company's unclaimed calculated tax losses available for offset against future profits. Headline earnings per share reduced from a loss of ZAR0.18 in the comparative period to ZAR0.16.

Costs

The Company was again successful in reducing controllable production costs, notwithstanding the ramp up of the furnaces after the roof rebuilds, and is on track to achieve its cost reduction target.

Ferrochrome production cost per pound for the period was ZAR6.15/lb (US79.1¢/lb at ZAR7.81/USD), compared to ZAR6.25/lb (US89.4¢/lb at ZAR7.00/USD) for FY2011. This represents a ZAR0.10/lb or 1.7% decrease in Rand production cost.

The Company is targeting cost reductions of ZAR0.76/lb (US10.9¢/lb at ZAR7.00/USD) on FY2011 production cost, excluding unit electricity and unit reductant costs, which are outside the Company's control and affect all other South African producers. Adjusting for higher electricity prices and lower reductant prices, production cost for the period was ZAR6.04/lb, ZAR0.21/lb lower than FY2011 cost. This represents 27% of the targeted ZAR0.76/b saving.

The table below provides the breakdown of production cost in ZAR/lb:

* Adjusted for changes in unit reductant and electricity costs from FY2011

The main drivers behind costs compared to FY2011, adjusted for changes in unit electricity and unit reductant prices, and their outlook are given below:

·; Ore costs increased by 0.7% as a result of lower beneficiation plant recoveries during the initial shallow mining phase of the Sky Chrome open-pit as weathered ore is extracted. This will improve as the open-pit reaches unweathered deeper levels. The first UG2 chrome concentrate supply is scheduled for February 2012 and is expected to reduce ore costs by an estimated ZAR0.21/lb.

·; Reductant costs decreased by 12.6% mainly due to increased use of anthracite which have reached the targeted level.

·; Electricity costs increased by 0.6% because of higher electricity consumption during the furnace ramp up period. The full commissioning of the co-generation plant is expected to reduce electricity costs by an additional ZAR0.14/lb.

·; Operating costs increased by 8.8% mainly due to lower production volumes.

·; Fixed costs decreased by 15.1% mainly as a result of good cost control and standing charges written directly to the income statement. At nameplate production volume unit fixed costs are expected to decrease by an additional ZAR0.09/lb.

Administration and other expenses increased from ZAR82 million in the comparative period to ZAR109 million. This was primarily due to unabsorbed fixed costs charged directly to the income statement.

Dividends

The Board of Directors resolved not to declare an interim dividend for the six months ended 31 December 2011.

Outlook

With the furnaces now operating at full load and Sky Chrome ramping up to full production; throughput, costs and efficiencies are further improving. The commissioning of the UG2 Chrome Recovery Plant completed in February will enable a positive step to further cost reduction as 30% of the beneficiated ore requirement is landed at significantly lower cost than internal ore costs. The proven modifications to the cogen plant's remaining engines are progressing well and management is confident that the targeted cost reduction will be achieved.

Eskom recently approached the Company and other South African energy intensive users to acquire electricity allocation in return for attractive compensation. The Company is currently engaging with Eskom and is considering the financial implications of the offer which may be of significant value to shareholders. Recently, it has been reported that other ferrochrome producers Xstrata, Samancor and Ruukki, have accepted similar offers from Eskom.

The interim financial statements are prepared in accordance with International Financial Reporting Standards (IFRS). An abridged version of the financial statements follows; the full set for the period is available on the Company web site www.ifml.com.

1. CORPORATE INFORMATION

The financial statements of International Ferro Metals Limited (the Company) for the half year ended 31 December 2011 were authorised for issue in accordance with a resolution of the Directors on 20 February 2012.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The financial report is a general-purpose financial report, which has been prepared in accordance with AASB 134 "Interim Financial Reporting" and the Corporations Act 2001.  The financial report has also been prepared on an historical cost basis, except for certain financial instruments which have been measured at fair value. The principal accounting policies used by the Company comply with International Financial Reporting Standards (IFRS).

These half-year financial statements do not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report. These half-year financial statements should be read in conjunction with the Annual Report of International Ferro Metals Limited as at 30 June 2011.

It is also recommended that the half-year financial statements be considered together with any public announcements made by International Ferro Metals Limited and its controlled entities during the half-year ended 31 December 2011 and up to the issue date of this report, in accordance with the continuous disclosure obligations arising under the Corporations Act 2001.

The accounting policies and methods of computation are the same as those adopted in the most recent annual financial report except for the adoption of new and revised Accounting Standards listed under (c).

(b) Basis of accounting

For the purpose of preparing the half-year financial statements, the half-year has been treated as a discrete reporting period.

These financial statements are presented in South African Rand and all values are rounded to the nearest thousand Rand (ZAR'000) unless otherwise stated under the option available to the Company under ASIC Class Order 98/100. The Company is an entity to which the class order applies.

In the application of IFRS, management is required to make judgements, estimates, and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements. Actual results may differ from estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Judgements made by management in the application of IFRS that have significant effects on the financial statements and estimates with a significant risk of material adjustments in the next year are disclosed, where applicable in the relevant notes to the financial statements.

(c) Significant accounting policies

Except as described below, the accounting policies applied by the Group in this consolidated condensed interim financial report are the same as those applied by the Group in its consolidated financial report as at and for the year ended 30 June 2011.

Changes in accounting policy and disclosures 

The Group has adopted the following new and amended Australian Accounting Standards and AASB Interpretations as of 1 July 2011:

·; AASB 124 Related Party Disclosures (Revised)

·; AASB 2009-12 Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 110, 112, 119, 133, 137, 139, 1023 & 1031 and Interpretations 2, 4, 16, 1039 & 1052]

·; AASB 2009-14 Amendments to Australian Accounting Standards - Prepayments of a Minimum Funding Requirement [AASB Interpretation 14]

·; AASB 1054 Australian Additional Disclosures

·; AASB 2010-4 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 1, AASB 7, AASB 101, AASB 134 and Interpretation 13]

·; AASB 2010-5 Amendments to Australian Accounting Standards [AASB 1, 3, 4, 5, 101, 107, 112, 118, 119, 121, 132, 133, 134, 137, 139, 140, 1023 & 1038 and Interpretations 112, 115, 127, 132 & 1042]

·; AASB 2010-6 Amendments to Australian Accounting Standards - Disclosures on Transfers of Financial Assets [AASB 1 & AASB 7]

·; AASB 2011-1 Amendments to Australian Accounting Standards arising from the Trans-Tasman Convergence project [AASB 1, AASB 5, AASB 101, AASB 107, AASB 108, AASB 121, AASB 128, AASB 132, AASB 134, Interpretation 2, Interpretation 112, Interpretation 113]

The adoption of these amendments did not have any impact on the financial position or the performance of the Group.

(d) Basis of consolidation

The consolidated financial statements incorporate the assets and liabilities of all entities controlled by International Ferro Metals Limited (IFM) at the end of the reporting period. The Company and its controlled entities together are referred to as the Group. The effects of all transactions between entities in the Group are eliminated in full. Outside equity interest in the results and equity of controlled entities are shown separately in the consolidated Income Statement and Statement of Financial Position respectively.

Where control of an entity is obtained during a financial period, its results are included in the consolidated Income Statement from the date on which control commences. Where control of an entity ceases during a financial period, its results are included for that part of the period during which control existed.

The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.

(e) Going Concern

As at 31 December 2011, the Group had net current liabilities of ZAR195 million including the Bank of China working capital facility. Currently the Group has ZAR60 million cash on hand. Net cash outflows from operations before changes in working capital for the six months to 31 December 2011 was ZAR70 million, of which ZAR79 million was utilised in the first quarter when the furnace roofs were being rebuilt and ZAR9 million was generated in the second quarter when furnace production was ramping up. Working capital utilised ZAR12 million during the six month period. The ZAR500 million Bank of China working capital facility expires on 25 June 2012. Accordingly, for the Group to pay its debts as and when they fall due and continue as a going concern it must:

·; Secure an extension to the Bank of China working capital facility; and / or

·; Secure alternative sources of finance.

The Group must generate sufficient cash flows in order to remain solvent until one or more of the above alternatives has been secured. In the quarter ended 31 December 2011, the Company was cash flow generative before working capital movements.

The Company has applied to the Bank of China for a three year extension to the working capital facility. Whilst no guarantee can be made that the Bank of China will approve the extension application, the Directors remain confident that the application will be granted.

Management is also progressing a number of additional avenues of funding. Whilst there is no guarantee that these avenues can be completed prior to the due date of the working capital facility, the Directors are confident that they can be.

For these reasons the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future, and hence, continues to adopt the going concern basis in preparing the accounts.

3 SEGMENT INFORMATION

Identification of reportable segments.

The Group has determined operating segments based on the information provided to the Board of Directors (Chief Operating Decision Maker).

The Group operates predominately in one business segment, being the mining and processing of chromite in South Africa and sale of ferrochrome. There is no material difference between the financial information presented to the Chief Operating Decision Maker and the financial information presented in this report.

Sales revenue by geographic location

Revenue obtained from external customers is attributed to individual countries based on the location of the customer.

Major customers

The Group received 71% of its external revenue from China and Europe (2010: 75%). During the half year ended 2011 the Group received 48% (2010:42%) of its external revenue from CMC Cometals and 39% (2010:51%) from Jiuquan Iron & Steel Group Company Ltd (JISCO).

There are no additional customers which account for more than 10% of the Group's external revenues.

4 OTHER INCOME

Other income represents the following:

(a) Other income represents rental income received.

(b) Other income during the half year ended 31 December 2010 relates to the sale of IFM's 25% net profit interest in the retreatment of the tailings dams and current arisings from IFM's existing chrome operations to Phoenix Platinum Mining (Pty) Ltd.

 5 ADMINISTRATIVE AND OTHER EXPENSES

(a) Unabsorbed fixed costs have increased due to the furnace roof rebuild project during July 2011 - September 2011.

6 SHARE-BASED PAYMENT EXPENSE

(a) On 23 November 2011, at the Company's Annual General Meeting, Mr Chris Jordaan was granted a total of 4 million options to subscribe for fully paid ordinary shares in the capital of the Company. The options will vest in three tranches on 31 July 2012, 31 July 2013 and 31 July 2014 subject to Mr Jordaan being employed on each of these dates. These Rights have been issued under the Company's Performance Rights Plan and on the terms and conditions of the Performance Rights Plan Rules as described below:

·; Tranche 1: 1,333,334 Performance Rights vesting on 31 July 2012, subject to employment with the Company until vesting date, with an exercise price of £0.17 and having an expiry date of 31 July 2015.

·; Tranche 2: 1,333,333 Performance Rights vesting on 31 July 2013, subject to employment with the Company until vesting date, with an exercise price being the volume weighted average price of the Company's shares traded on the main market of London Stock Exchange plc ("LSE") over the last 30 days prior to 30 June 2012 and having an expiry date of 31 July 2016.

·; Tranche 3: 1,333,333 Performance Rights vesting on 31 July 2014, subject to employment with the Company until vesting date, with an exercise price being the volume weighted average price of the Company's shares traded on the main market of London Stock Exchange plc ("LSE") over the last 30 days prior to 30 June 2013 and having an expiry date of 31 July 2017.

(b) The Company also issued Mr Jordaan Rights to receive the equivalent of up to ZAR6 million worth of fully paid ordinary shares (to a maximum of 1.1 million shares per tranche) , calculated on the basis of the volume weighted average sale price of the shares of the Company on the LSE on the five trading days immediately prior to the relevant performance condition being satisfied:

·; Transaction 1: ZAR2 million equivalent of shares, up to a maximum of 1,100,000 shares, dependent upon continuing employment and the Company achieving nameplate ferrochrome production of 66,250 tonnes for one calendar quarter.

·; Transaction 2: ZAR2 million equivalent of shares, up to a maximum of 1,100,000 shares, dependent upon continuing employment and the Total Shareholder Return (TSR) exceeding 20% for the 2012 financial year. TSR will be calculated as change in share price and the applicable dividend payments over the year.

·; Transaction 3: ZAR2 million equivalent of shares, up to a maximum of 1,100,000 shares, dependent upon continuing employment and TSR exceeding 20% for the 2013 financial year.

These Rights have been issued under the Company's Performance Rights Plan and on the terms and conditions of the Performance Rights Plan Rules.

7 EARNINGS PER SHARE

(a) Due to the reported loss per share, the additional rights issued are anti-dilutive and hence have not been incorporated in the calculation of diluted earnings per share and the calculation of average weighted number of ordinary shares.

8 TRADE AND OTHER RECEIVABLES

(a) Trade debtors increased at 31 December 2011, due to certain sales made during the period which have 60 day payment terms.

9 INVENTORIES

10 DEFERRED TAX ASSET

The Group has recognised a deferred tax asset as it is considered probable that it will be recovered through future taxable profits.

11 OTHER NON-CURRENT ASSETS

(a) Restricted cash represents cash set aside for bank guarantees to the Department of Mineral Resources for environmental rehabilitation.

12 INTANGIBLE ASSETS

13 INTEREST-BEARING LOANS AND BORROWINGS

(a) Working capital facility

On 29 June 2009, the Company entered into a working capital facility agreement with the Bank of China for an amount of ZAR500 million. The initial drawdown currency split was 60% in USD and 40% in ZAR. The facility interest is charged at the USD:LIBOR plus 1.5% on the USD portion of the loan while the ZAR portion of the loan is charged at the JIBAR rate plus 1.9%. The term of the facility is 36 months and will expire on 25 June 2012 and the amount due has been classified as a current liability. The parent company, IFML, guarantees the facility on behalf of IFMSA. The entire balance sheet of IFMSA is pledged as collateral for the loan facility. Bank of China has the option to cancel the loan facility and call upon any balance outstanding in the event of a material deterioration in the financial position of IFMSA. The Company maintains regular dialogue with Bank of China and the Board is confident that this facility will be renewed in the current financial year.

(b) Other loans constitute the 20% tribal participation of funding provided to Sky Chrome by IFM. The loan is interest free and payable before earning distributions are made.

(c) The weighted average effective interest rate on finance leases is 9.63%.

14 CONTRIBUTED EQUITY

15 ACCUMULATED LOSSES

16 DIVIDENDS

The Board of Directors resolved not to declare an interim dividend for the period ended 31 December 2011.

17 CAPITAL COMMITMENTS

The only changes to the commitments disclosed in the most recent annual financial statements are the following:

(a) An amount of ZAR35.5 million has been spent during the six months on the UG2 project. This amount has been recorded in the financial statements as an intangible asset. The remaining outstanding cost of the contract is ZAR10 million.

18 CONTINGENT ASSETS AND LIABILITIES

There are no contingent liabilities outstanding or recorded at 31 December 2011.

19 EVENTS AFTER THE END OF REPORTING PERIOD

No other material matters or circumstances, other than those announced have arisen since 31 December 2011 that have significantly affected or may significantly affect:

- the Company's operations in future financial years; or

- the result of those operations in future financial years; or

- the Company's state of affairs in future financial years.