COMPLETION OF ASSORE’S ACQUISITION OF A 50% INDIRECT INTEREST IN THE DWARSRIVIER CHROME MINE

Assore shareholders are referred to the announcement released on the Stock Exchange News Service of the JSE Limited on 25 June 2015, in which they were advised that Assore and African Rainbow Minerals Limited (“ARM”) had concluded definitive agreements for Assore’s acquisition of ARM’s 50% indirect interest in the Dwarsrivier Chrome Mine (“Dwarsrivier”), held through Assmang
Proprietary Limited (“Assmang”), for an amount of ZAR450 million (the “Purchase Consideration”) (the “Transaction”).

Assore is pleased to advise that the applicable conditions precedent have been fulfilled and therefore the Transaction has been completed. In accordance with the terms of the Transaction, Assore has, in addition to paying the Purchase Consideration, refunded Assmang an amount of approximately ZAR55 million for additional funding advanced to Dwarsrivier’s operations by Assmang between 1 July 2014, being the effective date of the transaction, and 30 June 2016.

Assore Buys African Rainbow Minerals’s stake in Dwarsrivier Chrome Mine

Assore and African Rainbow Minerals Limited conclude definitive agreements for Assore’s acquisition of a 50% indirect interest in the Dwarsrivier Chrome Mine.

1. Introduction
Shareholders of Assore (“Shareholders”) are referred to the announcement released on the Stock Exchange News Service of the JSE Limited (“JSE”) on 27 February 2015, in terms of which Shareholders were advised that Assore and African Rainbow Minerals Limited (“ARM”)(the “Parties”) had reached an in-principle agreement on Assore’s acquisition of ARM’s 50% indirect interest in the Dwarsrivier Chrome Mine (“Dwarsrivier”) (the “Transaction”) for a consideration of ZAR450,000,000 (the “Purchase Consideration”).

Assore is pleased to advise that it has now concluded definitive agreements in respect of the Transaction.

Dwarsrivier is presently owned and operated by Assmang Proprietary Limited (“Assmang”), the equal joint venture between the Parties, and mines chrome ore near Lydenburg in the Mpumalanga province. The ore produced is sold both on the export market and locally. Assmang will sell Dwarsrivier to K2011105280 Proprietary Limited, a special purpose company (“Dwarsrivier SPV”) in which Assore will, pursuant to the completion of the Transaction, own the entire issued share capital.

The completion of the Transaction is subject to a number of conditions precedent (as set out in paragraph 4 below), including the approval by the Minister of Mineral Resources.

The Transaction is deemed to be a Category 2 transaction in terms of the Listings Requirements of the JSE.

View full press release >>

Khumani Newsletter – March 2013

Easter is coming early this year, at the end of March. For some it is a chance to take a short break away from home. But the roads so busy at this time of the year, you might see the long weekend as an opportunity to spend the time just relaxing at home, without the hustle and bustle of the usual routine.

Students Lucky Day

Twenty-five students from disadvantaged communities, who are benefiting from the Tsantsabane local municipality and Assmang Beeshoek Mine bursary scheme were called in for a motivational session on Tuesday at Postmasburg hall.

The session was called with the aim of assisting the beneficiaries to work hard and do better in their respective fields of study.

When addressing the students, John Ncazelo from Beeshoek Mine said the purpose of the bursary scheme was to assist the youth of Tsantsabane to “pursue careers that would contribute towards the development and upliftment of their areas”.

“The criteria for awarding bursaries was based on academic merit and financial need. The bursary scheme is currently funding the studies of 25 students who have been at different tertiary institutions since 2010’’, said Ncazelo.

Mayor of Tsantsabane municipality, Elroy Phete, said the aim of the Tsantsabane-Assmang Beeshoek Bursary Scheme was to ensure that the local youth were educated.

“This would not only empower them, but also enable them to plough back to their communities by making sure that the areas were developed,” said Phete.

“These kids are the future of this nation, so it is one of our priorities to make sure that they get the education they deserve. All they should do is work hard and make sure that they don’t lose this great opportunity.”

Among the motivational speakers present was Andrew Ramonnye from the district department of education, who emphasised that the students needed to be determined in order for them to succeed.

This, he mentioned after one of the best students, Nombulelo Remembrance Phillips, motivated other beneficiaries.

Phillips is studying with the University of Free State in the Bcom Accounting field, as the best student among all beneficiaries.

She said: “A determined person is generally optimistic as well, which is a good trait to have. Being able to look past the shadow, to see the light so that you can get to where you want to be, is a very incredible skill. Someone who lacks determination would not have the mindset to look at the bright side of things and would settle for whatever he or she got.

“Optimism plays a big role in improving, allowing yourself to know you can do better and actually doing it. This is key in being determined”.

Assmang Limited aims 20 mill tons

Assmang Limited, a mining company of South Africa aims to expand its iron ore production to 16.5 Mill tons per annum by June, 2013. Subject to the maintenance of infrastructure, they will further target 20 Mill tons within a few years. Manganese production, which is 3rd globally, will be expanded by 14% to 4 Mill tons in the mid-short term, and in the long term they will aim 6 Mill tons which would make them the largest supplier of Manganese in the world. In addition to expanding production, they are in progress with optimizing production of ferroalloys given the limited electricity supply, and are considering setting up ferroalloy plants outside of South Africa.

Mr. Desmond Sacco, Chairman of Assmang Limited, Mr. Alastair Stalker, Managing Director of Ore & Metal Company Limited (Sales, Marketing and Shipping company of Assmang Limited), and Mr. Patrick Sacco, Deputy Managing Director of Ore & Metal Company Limited have answered to our interview on the 22nd. Mr. Desmond Sacco showed intention to further place emphasis on the relationship with Japanese buyers, whom have been their customers for more than 50 years.

Production at Assmang Limited’s Khumani Iron Ore Mine, which started operation in 2007, is estimated at 12-13Mill tons for the year ending June, 2012. They aim to produce 14 Mill tons in the following year, after they have secured railway allocation. Furthermore, they will expand production from Assmang Limited’s Beeshoek Iron Ore Mine to 2.5 Mill tons from the current 2 Mill tons. The majority of the production from the Beeshoek Iron Ore Mine is currently sold to the domestic steel market.

The railway to the Saldanha Bay Iron Ore Terminal is currently under expansion to carry 60 Mill tons, and studies are underway to achieve 80 Mill in future. After 80 Mill is realized, Assmang Limited will expand production at their Khumani Iron Ore Mine to 18 Mill tons. They also have a view of further production increase through developing new pits at the Beeshoek Iron Ore Mine and optimizing operations at the Khumani Iron Ore Mine.

Last year (2011), Assmang Limited commenced operation of a manganese beneficiation plant which is able to handle 6 Mill tons. Of the 3.5 Mill tons planned to be produced in the year ending June, 2012, 2.6 Mill tons will be exported.

Currently, the lack of sufficient railway capacity is covered by trucking approximately 0.6~0.7 Mill tons by road, butthis is not preferred, due to the high cost involved. Due to the lack of sufficient railway capacity, expansion to over 4 Mill tons is not facile. However, studies are being conducted towards production of 6 Mill tons.

Assmang Limited also produced Manganese Ferroalloys at its Cato Ridge and Machadodorp works situated in the Kwazulu Natal and Mpumalanga Provinces of South Africa respectively. With the increase in the cost of electricity, and lacking demand for Ferrochrome, they have converted the use of its furnaces at Machadodorp from making Ferrochrome to making High-Carbon Ferromanganese.

Assmang donates to Japanese disaster fund

Assmang Limited, a South African company, announced on 24 May, its support for the relief efforts in Japan, following the earthquake and tsunami there. This support is offered by way of a R5 million (approximately ¥60 million) donation to Japan Platform, which is guided by Sumitomo Corporation, as a partner in Japan.

Assmang has been supplying its products, as raw materials, to the Japanese steel mills for more than 40 years. Its relationships with Japanese customers are essential and remain central to the business of Assmang.

Assmang sincerely hopes that its donation will support and contribute positively to its important partners and to the relief efforts aimed toward the people of Japan affected by this disaster.

10 Million tons per annum

Assmang Limited recently announced that the 10 million tons per annum (“mtpa”) Khumani Iron Ore Mine (“Khumani”) has been completed on time and within budget.

The ARM and Assore Board of Directors have approved additional capital expenditure of R5.5 billion for the completion of the Khumani Expansion Project, to increase Khumani’s capacity from the current level of 10 mtpa to 16 mtpa. Of the 6 mtpa expansion, 4 mtpa is intended for the export market and 2 mtpa for the domestic market.

Assmang has received a commitment from Transnet to extend the current Iron Ore Export allocation on the Sishen/Saldanha export channel from 10 mtpa to 14 mtpa, increasing Assmang’s export capacity accordingly. This dovetails with the Iron Ore channel expansion from 47 mtpa to 60 mtpa.

Assmang’s position in relation to 10 alleged Manganism cases

Assmang Limited does not believe that any workers at its Cato Ridge plant have manganism, on the basis of expert medical diagnoses received. Assmang has fully supported all employees who were initially diagnosed with manganism. From the time they were put off work, in some cases more than a year ago, they have received full salaries and benefits, as well as medical assistance from Assmang.

Assmang has also told the Department of Labour that it disputes the initial diagnoses. Assmang arranged new medical examinations last week but the seven employees, plus an eighth who had been employed by a contractor to Assmang, refused to attend.

They are part of a group of 10 workers previously diagnosed with manganism. Two are no longer employed by Assmang. All 10 have been classified by the state Compensation Commissioner as disabled, and have qualified for benefits under workmen’s compensation legislation, the Compensation for Occupational Injuries and Diseases Act (COIDA).

Assmang had previously accepted the original manganism diagnoses at face value, but on later medical advice the company disputed the original diagnoses and the manner in which the incidents had been reported to the Compensation Commissioner.

The employees contend that they are 100% disabled and cannot work, and have refused to attend medical examinations that would enable the company to determine exactly what may be wrong with them.

When workers are classified as disabled under workmen’s compensation legislation, they leave the company’s employ and then receive compensation benefits in terms of COIDA.

“The company has been extremely supportive, but these employees are intent on relying on the Compensation Commissioner’s determination that they are 100% disabled, and they are to receive compensation based on that determination. We have various options open to us and we will consider these options on their merits,” said Assmang director Jan Steenkamp.

The background is that during February 2008 Assmang presented evidence to a Department of Labour inquiry into manganism at the Cato Ridge Works. The evidence was to the effect that, on the information available, it appeared that the ten persons who had initially been diagnosed with manganism did not actually have manganism. Assmang cannot go into further detail on these matters, in the absence of medical consents being forthcoming from the persons concerned. Assmang has on a number of occasions asked for these consents to be provided, but the persons concerned have refused to do so.

Despite the evidence presented in February 2008, and despite a formal request to the Compensation Commissioner from Assmang not to process any further manganism case applications of the ten in light of new evidence and pending medical examination of the relevant persons using more appropriate and relevant diagnostic protocols, shortly thereafter the Compensation Commissioner finally accepted all the ten as having manganism. Assmang has formally asked the Compensation Commissioner for his reasons for making these administrative decisions.

Assmang furnace up and running

Assmang Limited has resumed ferromanganese production on Furnace 2 at its Cato Ridge Works. This follows a small burn through on the shell of the furnace on Saturday, 19 April 2008. Repairs to the furnace were completed yesterday following which the Department of Labour lifted its prohibition order.

Burn throughs of this nature are not unusual occurrences in furnace operations in South Africa and around the world and at no time was there any risk to employees or the plant.

Four furnaces are now operational at the plant with the shutdown for planned maintenance on the fifth furnace progressing well. This furnace is expected to be recommissioned mid-May. The sixth furnace, damaged extensively in the explosion of 24 February, is expected to be recommissioned in the 4th quarter of 2008.

Assmang Cato Ridge furnace expected to reopen soon

Assmang Limited is in discussion with the Department of Labour regarding the lifting of the prohibition on the operation of Furnace 2 at its Cato Ridge Works. The prohibition was imposed as from 22 April 2008 following a small burn through on the shell of the furnace. . Assmang Cato Ridge Works had shut down the furnace on Saturday, 19 April 2008 immediately following the burn through.

Assmang Limited would like to emphasise that burn throughs of this nature are not unusual occurrences in furnace operations in South Africa and around the world. The Cato Ridge Works has standard practices for repairing burn throughs and repairs were completed this morning. In line with its re-sharpened focus on safety, Assmang Cato Ridge Works also employed the services of an external refractory expert to confirm its course of action. There was no danger to employees or risk to the plant.

Regarding the worker injured on 10 April 2008 on Furnace 3, once again there are standard operating procedures in an event like this and these were immediately followed. This injury is in no way related to the incident on Furnace 2. The employee received first aid at the on-site clinic and returned to work the next day. Says Princess Thwala, Senior General Manager at the Cato Ridge Works, “This was a minor injury but we will not tolerate deviations from our standard health and safety procedures and are therefore investigating whether procedures were followed. Full safety equipment and clothing is provided to all employees, according to the needs of their job.”