Tharisa Regulatory News (THS)

THARISA PLC

Incorporated in the Republic of Cyprus with limited liability

Registration number: HE223412

JSE share code: THA

LSE share code: THS

ISIN: CY0103562118

THARISA 2017

CONSOLIDATED ANNUAL RESULTS

HIGHLIGHTS

ROM MINED UP 3.9% 5.0 Mt

(2016: 4.8 Mt)

PGM PRODUCTION

UP 8.3% (5PGE + Au) 143.6 koz

(2016: 132.6 koz)

CHROME CONCENTRATE PRODUCTION

UP 7.0% 1.3 Mt

(2016: 1.2 Mt)

REVENUE

UP 59.1% US$349.4m

(2016: US$219.6m)

OPERATING PROFIT

UP 198.4% US$95.9m

(2016: US$32.1m)

EBITDA

UP 168.7% US$115.6m

(2016: US$43.0m)

PROFIT BEFORE TAX

UP 314.2% US$91.0m

(2016: US$22.0m)

HEADLINE EARNINGS PER SHARE

UP 266.7% US$ 22 cents

(2016: US$ 6 cents)

PROPOSED DIVIDEND OF

US$ 5 CENT PER SHARE

(2016: US$ 1 cents)

LEADERSHIP REVIEW

financial year ended 30 September 2017

Executive Chairman Loucas Pouroulis, Chief Executive Officer Phoevos Pouroulis and Chief Finance Officer

Michael Jones.

Dear Stakeholder

In compiling this report we have been guided by materiality so that we report concisely on those issues most

material to our stakeholders and our ongoing ability to create value. More detailed information is available on

our website, www.tharisa.com.

FY2017 was a year of record production and profitability notwithstanding the muted PGM basket price and

volatility of spot chrome concentrate prices. It was also a year of leveraging the business model with third party

agency and trading activities.

Tharisa Minerals Proprietary Limited ("Tharisa Minerals") mined 5.0 Mt of ore during the year, exceeding the

required mining call rate for the nameplate capacity of our processing plants. This resulted in PGM production

of 143.6 koz of contained PGMs and production of 1.3 Mt of chrome concentrates. Of the chrome concentrates,

323.1 kt comprised high value specialty grade products.

PGM prices remained muted during the year showing a marginal increase of US$50 per PGM basket ounce

despite the rally in the palladium price, which has recently surpassed and maintained levels above the prevailing

platinum price. Tharisa witnessed history in the first half of FY2017 with record prices for metallurgical chrome

concentrates being achieved at approximately US$390/t. There was however limited liquidity and an

underestimated global supply side response which displaced a large portion of South Africa's market share. Prices

subsequently declined to levels as low as US$130/t mainly on the back of accumulated inventory levels. Post the

half-year Tharisa saw a recovery in the spot metallurgical grade chrome prices delivered to China due to

increased demand for stainless steel and excess inventories being absorbed in the normal course. The average

metallurgical chrome contract price achieved was US$200/t CIF China for FY2017.

Operating profit for the year amounted to US$95.9 million (2016: US$32.1 million), with a net profit after tax of

US$67.7 million (US$15.8 million) generating HEPS of US$ 22 cents (US$ 6 cents).

In the year under review, Tharisa initiated the transition to owner mining. Towards the latter part of the year,

the business was further expanded to include third party plant operation and sales thereby improving profitably

through further economies of scale.

It is the Group's policy to pay a minimum of 10% of its consolidated net profit after tax as a dividend, and the

directors are pleased to announce that based on the improved earnings, subject to the necessary shareholder

approvals, the Board has proposed a dividend to shareholders of US$ 5 cents per share (2016: capital distribution

of US$ 1 cent) equating to 19.2% of its consolidated net profit after tax.

Furthermore, Tharisa is pleased to notify its shareholders that the dividend policy for FY2018 will be changed to

provide for a payout of at least 15% of consolidated net profit after tax, an increase from the previous stated

dividend policy of at least 10% of consolidated net profit after tax. The Company also intends to introduce the

payment of an interim dividend.

The Company's dividend policy takes into consideration various factors, including overall market and economic

conditions, the Group's financial position, capital investment plans as well as earnings growth.

SAFETY

Safety remains a priority at Tharisa which achieved a fatality free year and, at 30 September 2017, our LTIFR per

200 000 hours worked at the mine was 0.07.

Tharisa is pleased to advise that no safety related stoppages were incurred in the year highlighting our emphasis

on safety as well as our improved relationship with the DMR inspectorate.

The Group continues to strive for a zero harm work environment and in line with the DMR's drive to minimise all

injuries within the South African mining industry, the Group remains committed to ensuring a safer workplace.

To that end it is pleasing to report that Tharisa Minerals was awarded three safety awards in 2017. These include

the Best Safety Performance and Best Improved Performance awards at Mine Safe 2017, and an award from the

Mine Health and Safety Council's for 2 000 fatality free production shifts.

OPERATIONAL OVERVIEW

A number of milestones were achieved during the financial year including:

- 5.0 Mt reef mined, an increase of 3.9%

- 4.9 Mt milled, an increase of 5.6%

- 143.6 koz 5PGE+Au contained PGM production, up by 8.3%

- 79.7% overall PGM recovery, an increase of 14.0%

- 1.3 Mt production of chrome concentrates, up by 7.0%

- 64.1% chrome recovery, an increase of 2.2%

- 323.1 kt specialty grade chrome production, an increase of 19.9%

MINING

Reef mined exceeded the volumes required to meet production targets in FY2017. Mining focused on extracting

the optimal reef horizon mix for feed into the plants with particular attention on the feed grades. In addition,

overburden exposed by the planned pit extension following the road diversion was mined. It is planned that the

stripping ratio will normalise to above the LOM stripping ratio of 9.6 m 3:m3 in FY2018 from the 7.5 m3:m3

achieved in the current year.

A total of 5.0 Mt of reef was mined ensuring a constant feed of material into the plants while increasing the run

of mine (ROM) ore stockpile ahead of the plants to 307.7 kt thereby further derisking the operations. The

intention is to increase the ROM ore stockpile to at least one month of plant throughput (400 kt). During the

financial year Tharisa Minerals acquired a drilling sub-contractor's business to start in sourcing the drilling

operations and, as an owner operator, focus on improving ROM grades and fragmentation.

Subsequent to the financial year end, Tharisa Minerals acquired the mining fleet from its mining contractor and

successfully transitioned from a contractor mining model to an owner mining model.

PROCESSING

Plant throughput at 4.9 Mt, exceeded nameplate capacity for the first time and is attributable to consistent feed

and preventative maintenance resulting in improved plant availability and utilisation. A high energy PGM

flotation circuit was integrated into the Genesis Plant to further increase recoveries. The circuit was

commissioned in August 2017 and followed the successful integration of a high energy PGM flotation circuit at

the Voyager Plant.

With a PGM rougher feed grade of 1.56 g/t and recoveries improving to 79.7% (target of 80%), PGM production

(5E + Au) at 143.6 koz improved 8.3%. Chrome feed grade was 17.8% and with chrome recoveries improving to

64.1% (target 65%), chrome concentrate production increased by 7.0% to 1.3 Mt. The production of specialty

grade chrome concentrates of 323.1 kt increased 19.9% and constitutes approximately 24.3% of total chrome

concentrate production. Specialty grade chrome concentrates continue to command on average a US$50/t

premium on a CIF China equivalent basis over standard metallurgical grade chrome concentrates.

Arxo Metals Proprietary Limited ("Arxo Metals") entered into an operating, sales and marketing agreement with

Western Platinum Limited, a subsidiary of Lonmin plc ("Lonmin"), to operate their K3 UG2 chrome concentrator

plant. The handover date was 28 August 2017 and during the short time under the Group's control 20 kt of

chrome concentrate was produced.

Commodity markets and sales

Tharisa Minerals continues to supply the majority of its PGM concentrate to Impala Platinum in terms of its off-

take agreement with the balance of the PGM concentrates to be processed in the 1MW research and

development furnace that was recently commissioned by Arxo Metals and then sold to Lonmin.

A total of 143.5 koz of contained PGMs (on a 5PGE + Au basis) was sold during the year. This is an increase of

8.3% over the previous year's sales of 132.9 koz of contained PGMs (on a 5PGE + Au basis).

The PGM prill split by mass is as follows:

Tharisa Minerals is paid a variable percentage of the market value of the contained PGMs in terms of an agreed

formula. The PGM basket price improved with the average PGM basket price per ounce increasing by 6.8% to

US$786/oz (2016: US$736/oz) for the financial year.

Chrome concentrate sales totalled 1.3 Mt, 321.5 kt of which was higher value-add specialty chemical and foundry

grade chrome concentrates with the bulk of the sales being metallurgical grade chrome concentrate. The average

price for metallurgical grade chrome concentrate on a CIF main ports China basis increased to US$200/t.

Chemical and foundry grade chrome concentrates produced by Tharisa Minerals and Arxo Metals are sold to

Rand York Minerals in terms of an off-take agreement which provides for a joint marketing arrangement of

the product.

LOGISTICS

The chrome concentrates destined for main ports China were shipped either in bulk from the Richards Bay Dry

Bulk Terminal or via containers and transported from Johannesburg by road to Durban from where it was

shipped. The economies of scale and in-house expertise have ensured that our transport costs, a major cost of

the group, remain competitive.

Arxo Logistics has sufficient storage capacity at both the Richards Bay Dry Bulk Terminal and the Durban container

port to manage Tharisa Minerals' full production capacity.

A total of 995.8 kt (2016: 923.1 kt) of chrome concentrates was shipped by Arxo Logistics in FY2017 mostly to

main ports in China. Of this, 98% was shipped in bulk, with bulk shipments being preferred by customers due to

ease of handling and reduced port charges, as well as reduced levels of administration.

Arxo Logistics provided third-party logistics services during the period under review and is planning to expand

this service offering in the year ahead.

Negotiations regarding a planned public-private partnership for an on-site railway siding at the Tharisa Mine are

continuing and final commercial terms are still to be agreed. This will not only improve efficiencies and costs, but

will also improve safety and alleviate environmental impacts by reducing road freight haulage.

LABOUR RELATIONS

Labour relations at the Tharisa Mine remained stable during the year. Tharisa's employees have traditionally

been represented by the NUM with 56% of the employees in the bargaining unit represented by them. Post the

year end, approximately 900 employees were transferred from the mine's former contractor, bringing Tharisa

Minerals' total staff complement to approximately 1 700.

SUSTAINABILITY

Sustainability is at the heart of the business model. The Company is proud of its track record in minimising the

environmental impact and, while striving to improve further, takes pride in the mature and mutually beneficial

relationships with the communities that border the Tharisa Mine.

The Tharisa Mine not only understands its obligations to create social capital as enshrined in the MPRDA, but

strives to achieve these obligations in ways that create ongoing sustainable social capital. Its commitment to the

neighbouring communities is evidenced in all aspects of the business, not only from the corporate social

initiatives and local economic development plans but also underpinned by equity ownership by the community

in Tharisa Minerals.

Tharisa has policies in place to ensure that neither it nor its suppliers participate in any form of human rights

violation, including human trafficking and modern slavery.

Tharisa acts ethically and with integrity in all business dealings and is committed to ensuring systems and controls

are in place to safeguard against corruption.

FINANCIAL OVERVIEW

The financial results of the Group were characterised by two key financial trends, the first being the volatility in

the metallurgical grade chrome concentrate market with an average price per tonne of US$200 being achieved

(on a CIF main ports China basis) being a 66.7% increase compared to the prior period and secondly the

strengthening of the ZAR by 9.5% impacting on the cost base of the Group which, other than for freight costs, is

largely ZAR denominated.

Group revenue totalled US$349.4 million (2016: US$219.6 million), an increase of 59.1% relative to the prior

year. The increase in revenue is mainly attributable to the chrome segment with the metallurgical grade chrome

concentrate price increasing by 66.7% from an average of US$120/t to US$200/t, with the speciality grade

chrome concentrates continuing to trade at a premium of at least US$50/t on a CIF China equivalent basis.

On a segmental basis the increase in revenue is as a result of:

- An increase in the unit sales of PGMs by 7.4% from 132.9 koz to 143.5 koz with an increase in the PGM

basket price by 6.8% from US$736/oz to US$786/oz

- an increase in the unit sales of metallurgical grade chrome concentrates by 7.9% from 923.1 kt to 995.8 kt

with an increase in the metallurgical grade chrome concentrate price of 66.7%

- an increase in the unit sales of speciality grade chrome concentrates (24.3% of production) by 17.9% from

272.7 kt to 321.5 kt

- the introduction of third party trading and logistics businesses building on the existing platforms which

contributed US$5.7 million to revenue

Gross profit amounted to US$122.7 million (2016: US$54.5 million) with a gross profit margin of 35.1% (2016: 24.8%).

The segmental contribution to revenue and gross profit from the respective segments is summarised below:

Shared costs of production are based on revenue contribution on an FCA basis, allocated 35% to the PGM

segment and 65% to the chrome segment. The comparable period allocation was on an equal basis.

The PGM segment gross margin of 39.8% (2016: 29.7%) was higher than the previous year, mainly due to the

revised basis of allocating shared costs. The gross margin also improved with a reduction in the overall unit cost

of sales with increased units sold following improved recoveries being achieved.

The chrome segment gross margin of 34.1% (2016: 21.9%) was higher than the year before largely due to the

increased chrome concentrate price notwithstanding the increased cost of sales based on the increased

allocation of the shared production costs. Freight costs for bulk shipments of chrome concentrates, a significant

component of the cost of chrome sales, increased by 40.0% from US$10/t to US$14/t, coupled with a 9.5%

strengthening of the ZAR against the US$, resulted in the average transport cost per chrome tonne increasing

from US$42 to US$52.

On a unit cost basis, the mining cost per reef tonne mined increased by 11.9% from US$16.8/t to US$18.8/t. This

cost per reef tonne was incurred on a stripping ratio of 7.5 (m³ waste : m³ reef). On a per cube mined basis i.e.

including both waste and reef, the cost increased by 16.5% from US$6.72/m³ to US$7.83/m³ (the prior year

stripping ratio was 7.3).

An above inflation increase was agreed with MCC Contracts Proprietary Limited ("MCC") for the mining

contractor work due to historical under recoveries based on the mine plan. In addition, there was an appreciation

in the ZAR of approximately 9.5%. During the transition to the owner mining model, additional costs were also

incurred in anticipation of the transition such as employment of additional technical management and sourcing

of supplementary mining equipment.

The consolidated cash cost per tonne milled (i.e. including mining but excluding transport and freight) increased

by 9.4% from US$31.9/t to US$34.9/t.

After accounting for administrative expenses of US$26.9 million (an increase of 18.1% over the comparable

period), the Group achieved an operating profit of US$95.9 million.

EBITDA amounted to US$115.6 million (2016: US$43.0 million).

Finance costs (totalling US$7.7 million) principally relate to the balance owing on the senior debt facility due by

Tharisa Minerals for the construction of the Voyager Plant and the trade finance facilities of Arxo Resources on

the discounting of the letters of credit on chrome concentrate contracted sales as well as the limited recourse

discounting of the PGM receivables.

With the strong performance in the commodity markets during the financial year, the Group recorded a

substantial improvement in profitability, generating a profit before tax of US$91.0 million compared to the

comparable period of US$22.0 million.

The tax charge amounted to US$23.3 million, an effective charge of 25.6%.

Foreign currency translation differences for foreign operations, arising where the Company has funded the

underlying subsidiaries with US$ denominated funding and the reporting currency of the underlying subsidiary

is not in US$ was nominal, against the prior year's gain of US$4.2 million.

Basic and diluted profit per share for the year amounted to US$ 22 cents (2016: US$ 5 cents) with headline

earnings per share of US$ 22 cents (2016: US$ 6 cents).

As approved by shareholders at the annual general meeting and following the obtaining of the requisite court

approvals, the Company reduced its share premium account in the amount of US$179.2 million and applied the

reduction in the first instance to the revenue reserves of the Company and in the second instance by returning

to shareholders, in cash, an amount of US$2.6 million (US$ 1 cent per share).

The total debt amounted to US$54.2 million, resulting in a debt to total equity ratio of 19.9%. Offsetting the debt

service reserve account amount of US$4.5 million, resulted in a debt to equity ratio of 18.2%. The long-term

targeted debt to equity ratio is 15%. Tharisa had cash and cash equivalent of US$49.7 million at year end resulting

in a nominal net debt to total equity ratio.

With effect from 1 October 2017, Tharisa Minerals purchased certain mining equipment from MCC Contracts

and purchased additional mining equipment to supplement the fleet. The cash consideration paid for this fleet

amounted to ZAR279 million (US$20.6 million) and was debt funded through a bridge loan facility, original

equipment manufacturer finance and asset backed finance. If the purchases had taken place on 30 September

2017, the pro forma total debt, offsetting the debt service reserve account, would have amounted to

US$70.2 million with a pro forma debt to total equity ratio of 25.8%.

The current capex spend focused on stay in business capex, mining fleet additions during the transition phase

and ongoing projects aimed at improving recoveries of both PGMs and chrome concentrates. Additions to

property, plant and equipment for the year amounted to US$26.4 million of which US$7.1 million related to

additions to the mining fleet. The depreciation charge amounted to US$16.9 million (2016: US$10.3 million).

The Group generated net cash from operations of US$73.2 million (2016: US$22.2 million). Cash on hand

amounted to US$49.7 million. In addition, the Group held US$4.5 million in a debt service reserve account.

OUTLOOK

The PGM basket price in US$ has improved on the back of the rally in spot palladium and rhodium prices and

with the recovery in chrome concentrate prices, underpinned by demand, the Group's margins remain robust.

The free cash flow for FY2018 and EBITDA margins should grow considerably supported by solid operational

performance and a more favourable commodity outlook.

The transition to owner mining has progressed well and the benefits of closer management of the in-pit grades

and improved blending ahead of the plants are being realised.

The maturation of the business beyond the development stage has positioned the group for its next phase of

growth. Not only is the focus on continuous improvements in feed grade and recoveries, but on expanding the

business through the operation of third party plants and the marketing of these commodities.

The production outlook for FY2018 is 150 koz of PGMs and 1.4 Mt of chrome concentrates, of which 350 kt will

be specialty grade chrome concentrates. Our vision for 2020 is to produce 200 koz of PGMs and 2 Mt of chrome.

The management team is positive about the prospects for the year ahead and believes that with the direct

control of our mining operations and a strong focus on ROM quality further economies of scale will be

demonstrated through reduced unit costs and increasing operating margins and profitability.

The achievement of our stated objectives has had a material boost in the morale within the Group and it is this

commitment and dedication to achieving these goals that has made the difference in FY2017. We will continue

to leverage off of this momentum and look to continue implementing our strategy as we move towards achieving

our vision for 2020.

We thank our Board, management, employees, customers, suppliers and partners who have assisted the

Company during this profitable year.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

30 September 2016

Preparation and approval of condensed consolidated financial statements

The condensed consolidated financial statements for the year ended 30 September 2017 have been

extracted from the audited financial statements of the Group, but have not been audited. The

auditor's report on the audited financial statements does not report on all of the information

contained herein. Shareholders are therefore advised that in order to obtain a full understanding of

the financial position and results of the Group, these condensed consolidated financial statements

should be read together with the full audited financial statements and full audit report.

These condensed consolidated financial statements and the audited financial statements, together

with the audit report, are available on the Company's website, www.tharisa.com and are available

for inspection at the registered address of the Company.

The directors take full responsibility for the preparation of this report and the correct extraction of

the financial information from the underlying financial statements.

The directors of the Company are responsible for the maintenance of adequate accounting records

and the preparation of the financial statements and related information in a manner that fairly

presents the state of the affairs of the Company. These financial statements are prepared in

accordance with International Financial Reporting Standards and incorporate full and responsible

disclosure in line with the accounting policies of the Group which are supported by prudent

judgements and estimates.

The directors are also responsible for the maintenance of effective systems of internal control which

are based on established organisational structure and procedures. These systems are designed to

provide reasonable assurance as to the reliability of the financial statements, and to prevent and

detect material misstatement and loss.

The consolidated financial statements have been reported on without qualification by KPMG Limited.

The preparation of these condensed results was supervised by the Chief Finance Officer,

Michael Jones, a Chartered Accountant (SA).

The condensed consolidated financial statements have been prepared on a going concern basis as

the directors believe that the Company and Group will continue to be in operation in the foreseeable future.

The consolidated Annual Financial Statements have been approved by the Board on 28 November 2017.

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER

COMPREHENSIVE INCOME

for the year ended 30 September 2017

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER

COMPREHENSIVE INCOME

for the year ended 30 September 2017

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 30 September 2017

The consolidated financial statements were authorised for issue by the Board of Directors on 28 November 2017.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 30 September 2017

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 30 September 2017

Companies which do not distribute 70% of their profits after tax, as defined by the Special Contribution for the Defence of the Republic Law,

during the two years after the end of the year of assessment to which the profits refer, will be deemed to have distributed this amount

as dividend. Special contribution for defence at 17% will be payable on such deemed dividend to the extent that the ultimate shareholders

at the end date of the period of two years from the end of the year of assessment to which the profits refer are both Cypriot tax residents

and Cypriot domiciled entities. The amount of this deemed dividend distribution is reduced by any actual dividend paid out of the profits

of the relevant year at any time. This special contribution for defence is paid by the company for the account of the shareholders.

These provisions do not apply for ultimate beneficial owners that are non-Cypriot tax resident individuals. Retained earnings is the

only reserve that is available for distribution.

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 30 September 2017

1. REPORTING ENTITY

Tharisa plc (the Company) is a company domiciled in Cyprus. These condensed consolidated financial statements

of the Company for the year ended 30 September 2017 comprise the Company and its subsidiaries (together

referred to as the Group). The Group is primarily involved in platinum group metals (PGM) and chrome mining,

processing, trading and the associated logistics. The Company is listed on the main board of the Johannesburg

Stock Exchange and has a secondary standard listing on the main board of the London Stock Exchange.

2. BASIS OF PREPARATION

Statement of compliance

These condensed consolidated financial statements have been prepared in accordance with International

Financial Reporting Standards (IFRS), International Accounting Standards, IAS34 Interim Financial Reporting, the

Listings Requirements of the Johannesburg Stock Exchange and the Cyprus Companies Law, Cap. 113. Selected

explanatory notes are included to explain events and transactions that are significant to an understanding of the

changes in financial position and performance of the Group since the last consolidated financial statements at

and for the year ended 30 September 2016. These condensed consolidated financial statements do not include

all the information required for full consolidated financial statements prepared in accordance with IFRS.

These condensed consolidated financial statements were approved by the Board of Directors on 28 November 2017.

Use of estimates and judgements

Preparing the condensed consolidated financial statements requires management to make judgements,

estimates and assumptions that affect the application of accounting policies and the reported amounts of assets

and liabilities, income and expenses. Actual results may differ from these estimates.

In preparing these condensed consolidated financial statements, significant judgements made by management

in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those

applied to the consolidated financial statements at and for the year ended 30 September 2016.

Functional and presentation currency

The condensed consolidated financial statements are presented in United States Dollars (US$) which is the

Company's functional currency and amounts are rounded to the nearest thousand.

Going concern

After making enquiries which include reviews of current cash resources, forecasts and budgets, timing of cash

flows, borrowing facilities and sensitivity analyses and considering the associated uncertainties to the Group's

operations, the Directors have a reasonable expectation that the Group has adequate financial resources to

continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going

concern basis in preparing the consolidated financial statements and the condensed consolidated financial

statements, which assumes that the Group will be able to meet its liabilities as they fall due for the

foreseeable future.

New and revised International Financial Reporting Standards and Interpretations

The Group has not early adopted any standards and interpretations, which are not yet effective for the financial

year ended 30 September 2017.

The following Standards and Interpretations have been issued but are not yet effective for annual periods

beginning on or after 1 October 2016. Those that are relevant to the Group are presented below.

IFRIC 23 - Uncertainty over Income Tax Treatment

IFRS 15 Revenue from Contracts with Customers (effective for annual periods beginning on or after 1 January 2018)

IFRS 16 Leases (effective for annual periods beginning on or after 1 January 2019)

IFRS 9 Financial Instruments (effective for annual periods beginning on or after 1 January 2018)

The Group will adopt these Standards and Interpretations for the financial year ending 30 September 2018.

3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied by the Group in these condensed consolidated financial statement are the

same as those applied by the Group in its audited consolidated financial statements at and for the year

ended 30 September 2017.

4. OPERATING SEGMENTS

Segmental performance is measured based on segment revenue, cost of sales and gross profit or loss, as

included in the internal management reports that are reviewed by the Group's management.

The shared costs relating to the manufacturing of the PGM and the chrome concentrates are allocated to

the relevant operating segments based on the relative sales value per product on an ex-works basis. During

the year ended 30 September 2017, the relative sales value of chrome concentrates increased compared to

the relative sales value of PGM concentrate and consequently the allocation basis of shared costs was

amended to 65.0% (chrome concentrates) and 35.0% (PGM concentrate) respectively. The shared costs were

allocated equally between the PGM and chrome segments in the comparative period.

During the year the Group entered into an agreement to operate a chrome plant owned by a third party and

also to market and sell the chrome concentrate produced from this plant. The Group also intends to further

expand its third-party logistics offering and third-party trading operations in the year ahead. These

transactions are reported separately and are included in the Agency and trading segment.

Geographical information

The following table sets out information about the geographical location of the Group's revenue from

external customers.

The geographical location analysis of revenue from external customers is based on the country of

establishment of each customer.

5. COST OF SALES

6. ADMINISTRATIVE EXPENSES

7. TAX

The Group's consolidated effective tax rate for the year ended 30 September 2017 was 25.6% (2016: 28.1%).

The corporation tax rate is 12.5% in Cyprus, 0% in Guernsey and 28.0% in South Africa.

Special contribution for defence is provided in Cyprus on certain interest income at the rate of 30%. 100% of

such interest income is treated as non taxable in the computation of chargeable income for corporation tax purposes.

No provision for tax in other jurisdictions was made as these entities either sustained losses for taxation

purposes or did not earn any assessable profits.

8. EARNINGS PER SHARE

Basic and diluted earnings per share

The calculation of basic and diluted earnings per share has been based on the following profit attributable to

the ordinary shareholders of the Company and the weighted average number of ordinary shares outstanding.

LTIP and SARS awards were excluded from the diluted weighted average number of ordinary shares

calculation because their effect would have been anti-dilutive. The average market value of the Company's

shares for the purposes of calculating the potential dilutive effect of SARS was based on quoted market prices

for the year during which the options were outstanding.

Headline and diluted headline earnings per share

The calculation of headline and diluted headline earnings per share has been based on the following headline

earnings attributable to the ordinary shareholders and the weighted average number of ordinary

shares outstanding.

Reconciliation of profit to headline earnings

9. PROPERTY, PLANT AND EQUIPMENT

There were no additions to the deferred stripping asset (2016: US$2.4 million) during the year ended

30 September 2017. The deferred stripping asset is included in mining assets and infrastructure.

During the year the Group acquired mining fleet of US$1.2 million (2016: equipment of US$0.6 million) under

a finance lease. The leased equipment secures lease obligations. At 30 September 2017 the carrying amount

of the leased equipment amounted to US$1.1 million.

Tharisa Minerals Proprietary Limited acquired the assets of a sub-contractor, BMI Drilling Proprietary Limited,

during the year. The total consideration for the assets was ZAR24.1 million and these are included in additions.

Included in mining assets and infrastructure are projects under construction of US$9.0 million (2016: US$13.4 million).

The estimated economically recoverable proved and probable mineral reserve was reassessed during the year

which gave rise to a change in accounting estimate. The remaining reserve that management had previously

assessed was 106.4 Mt at 31 December 2015 and at 1 October 2016 was assessed to be 100.3 Mt. As a result,

the expected useful life of the plant decreased. The effect of the change on the actual depreciation expense,

included in cost of sales, is an additional US$0.4 million. The change was recognised prospectively.

Freehold land and buildings comprises various portions of the farms Elandsdrift 467 JQ and 342 JQ, North West

Province, South Africa. All land is freehold.

Property, plant and equipment, with the exception of motor vehicles, is insured at approximate cost of

replacement. Motor vehicles are insured at market value. Land is not insured.

At 30 September 2017, an amount of US$213.5 million (2016: US$200.8 million) of the carrying amount of the

Group's tangible property, plant and equipment is pledged as security against bank and third party borrowings

(note 16).

At 30 September 2017, the Group's capital commitments for contracts to purchase property, plant and

equipment amounted to US$6.5 million (2016: US$1.8 million).

10. LONG-TERM DEPOSITS

The long-term deposits represent restricted cash which is designated as a "debt service reserve account" as

required by the terms of the Common Terms Agreement for the senior debt facility of Tharisa Minerals

Proprietary Limited as disclosed in note 16.

Effective 31 March 2017, the Common Terms Agreement was amended by reducing the amount of restricted

cash required as a debt service reserve account. The released funds were utilised as a mandatory prepayment

on the outstanding capital, reducing the repayment term of the senior debt facility (refer to note 16).

The long-term deposits are deposited with major financial institutions of high-quality credit standing

predominantly within South Africa and Hong Kong of which US$2.2 million (2016: US$6.6 million) bears interest

at 5.5% pa (2016: 5.6% pa) and US$2.3 million (2016: US$3.3 million) bears interest at 0.01% pa (2016: 0.01% pa).

11. DEFERRED TAX

Deferred tax assets and deferred tax liabilities are not offset unless the Group has a legally enforceable right

to offset such assets and liabilities.

All of the above amounts have used the currently enacted income taxation rates of the respective tax

jurisdictions the Group operates in. South African taxation losses normally expire within 12 months of the

respective entities not trading. The deductible temporary timing differences do not expire under current

taxation legislation. Deferred tax assets have only been recognised in terms of these items when it is probable

that taxable profit will be available in the immediate future against which the respective entities can utilise the

benefits therefrom.

The estimates used to assess the recoverability of recognised deferred tax assets include a forecast of the

future taxable income and future cash flow projections based on a three year period. The Group did not have

tax losses and temporary differences for which deferred tax was not recognised.

12. INVENTORIES

Inventories are stated at the lower of cost or net realisable value. The Group impaired certain consumables

and spares as the operational use became doubtful with no anticipated recoverable amount or value in use.

The impaired consumables are allocated 35.0% and 65.0% respectively to the PGM and chrome operating

segments (2016: equally allocated). There were no write-downs to net realisable value during the year

(2016: no write downs).

Inventories are subject to a general notarial bond in favour of the lenders of the senior debt facility as referred

to in note 16.

13. TRADE AND OTHER RECEIVABLES

Trade and other receivables of the Group are expected to be recoverable within one year from each reporting date.

Trade and other receivables, which are less than 90 days past due are not considered to be impaired. Trade

and other receivables which are more than 90 days past due are assessed for recoverability with reference to

past default experience of the counterparty's current financial position.

Included in VAT is an amount of ZAR79.5 million which relates to diesel rebates receivable from the South

African Revenue Service (SARS) in respect of the mining operations. The Group received a letter of intent from

SARS disputing the refundability of this amount. The Group is strongly of the view that it fully complies with all

the regulations to be entitled to this refund and is opposing SARS's intent not to pay out this claim. The Group

will take the necessary legal action to recover the amount due.

Based on past experience, management believes that no impairment allowance (2016: no impairment allowance)

is required in respect of the trade and other receivables as there has not been a significant change

in credit quality and the balances are still considered fully recoverable. The Group does not hold any collateral

over these balances.

14. CASH AND CASH EQUIVALENTS

The amounts reflected above approximate fair value.

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are

generally call deposit accounts and earn interest at the respective short-term deposit rates.

At 30 September 2017, an amount of US$1.7 million (2016: US$1.6 million) was provided as security for a bank

guarantee issued in favour of a trade creditor of a subsidiary of the Group and US$0.3 million (2016: US$0.3 million)

was provided as security against certain credit facilities of the Group.

15. SHARE CAPITAL AND RESERVES

Share capital

Allotments during the year were in respect of the award of 2 984 853 ordinary shares granted in terms of the

Share Award Scheme (Conditional Awards) and 1 033 576 ordinary shares issued as treasury shares to satisfy the

potential future settlement of Appreciation Rights of the participants' of the Tharisa Share Award Plan.

During the year ended 30 September 2017, 46 302 ordinary shares were transferred from treasury shares to

satisfy the exercise of Appreciation Rights by the participants of the Tharisa Share Award Scheme.

At 30 September 2017, 987 274 ordinary shares were held in treasury.

Allotments during the previous year were in respect of the award of 1 089 685 ordinary shares granted in terms

of the Share Award Scheme (Conditional Awards).

All shares rank equally with regard to the Company's residual assets. The holders of ordinary shares, other than

treasury shares, are entitled to receive dividends as declared from time to time and are entitled to one vote per

share at meetings of the Company.

Share premium

The share premium represents the excess of the issue price of ordinary shares over their nominal value, to the

extent that it is registered at the Registrar of Companies in Cyprus, less share issue costs. The share premium is

not distributable for dividend purposes.

During the year ended 30 September 2017, the share premium account was reduced by US$179.2 million with

a corresponding increase in the retained earnings to reduce the accumulated losses to US$nil. The required Court

Order was obtained on 8 March 2017 and filed at the Registrar of Companies on 9 March 2017.

The distribution of US$2.6 million (US$1 cent per share) (2016: no distribution) was approved by way of a Special

Resolution on 1 February 2017. The Special Resolution was ratified by the Court Order on 8 March 2017.

During the years ended 30 September 2017 and 30 September 2016, the increases in the share premium account

related to the issue and allotment of ordinary shares granted in terms of the Share Award Schemes.

Secured bank borrowings

The secured bank borrowings relate to financing of ZAR1 billion obtained from a consortium of banks in South

Africa during the year ended 30 September 2012. The financing was obtained by Tharisa Minerals Proprietary

Limited, a subsidiary of the Group, and was for a period of seven years repayable in twenty two equal quarterly

instalments with the first repayment date at 31 December 2013.

Repayments are subject to a cash sweep which will reduce the repayment period to a minimum of five years.

Tharisa Minerals Proprietary Limited is required to maintain funds in a debt service reserve account (refer to

note 10). Effective 31 March 2017, the financing terms were amended to reduce the required amount of the

debt service reserve balance. The released funds from the debt service reserve balance were utilised as a

mandatory prepayment on the outstanding capital, reducing the repayment term of the senior debt facility. At

30 September 2017, the estimated remaining term is equal to five quarterly instalments.

The financing bears interest at 3 month JIBAR plus 4.9% pa until achievement of project completion on

14 November 2016 whereafter the interest rate reduced to JIBAR plus 3.4% pa.

The loan contains the following financial covenants:

- Debt service cover ratio ("DSCR") at a level greater than 1.4 times

- Loan life cover ratio at a level greater than 1.6 times

- Debt/equity ratio at a level greater than 1.5 times

- Reserve tail ratio at a level of 30.0% or greater.

At 30 September 2017 and 30 September 2016, Tharisa Minerals Proprietary Limited complied with all covenant

ratios. Project completion was achieved on 14 November 2016. In the prior year, Tharisa Minerals Proprietary

Limited hedged a portion of the facility for interest rate risk via an interest rate cap.

Finance leases

The Group entered into finance lease arrangement for the purchase of mining fleet. The average lease term

was 41 months and at 30 September 2017 the finance lease obligation was ZAR28.4 million. The average

effective borrowing rate is the South African prime rate. The interest rate was fixed at the contract date. No

arrangements have been entered into for contingent rent.

During the previous year the Group purchased equipment of ZAR22.9 million under a finance lease. The leased

equipment secures lease obligations. The lease term was 24 months and the average effective borrowing rate

was South African prime rate plus 3.0% pa. The lease obligation at 30 September 2017 was ZAR3.4 million

(2016: ZAR12.7 million). The interest rate was fixed at the contract date. No arrangements have been entered

into for contingent rent.

Deferred supplier

The balance relates to a trade payable of which payment had been deferred. The amount payable was

unsecured and interest was calculated at the South African prime rate. During the year ended 30 September 2017,

an agreement was reached with the deferred supplier and the outstanding balance was settled in full.

Guardrisk loan

The loan from Guardrisk Insurance Company Limited bears interest at 9.06% (2016: 8.72%) pa, compounded

monthly and is repayable in twelve monthly instalments commencing 1 December 2016. The loan is guaranteed

by the Company for an amount of ZAR14.0 million. The final instalment is due on 1 November 2017.

Bank credit facilities

The bank credit facilities relate to the discounting of the letters of credit by the Group's banks following

performance of the letter of credit conditions by the Group, which results in funds being received in advance

of the normal payment date. Interest on these facilities at the reporting date was US Libor plus 1.6% pa

(2016: US Libor plus 1.6% pa).

17. FINANCIAL INSTRUMENTS

* Level 1 of the fair value hierarchy - quoted prices in active markets for the same instrument

** Level 2 of the fair value hierarchy - significant inputs are based on observable market data for similar

financial instruments

The Board of Directors considers that the fair values of financial assets and liabilities approximate their

carrying values at each reporting date.

18. RELATED PARTY TRANSACTIONS

Related party transactions exist between shareholders, subsidiaries within the Group and its company

directors and key management personnel.

These transactions are concluded at arm's length in the normal course of the business. All intergroup

transactions have been eliminated on consolidation.