CMO-Provisional Unreviewed Condensed Consolidated Results

Chrometco Limited

(Incorporated in the Republic of South Africa)

(Registration number 2002/026265/06)

Share code: CMO

ISIN: ZAE007020249

("Chrometco" or "the Group")

PROVISIONAL UNREVIEWED CONDENSED CONSOLIDATED RESULTS FOR YEAR ENDED 28 FEBRUARY 2019

Commentary

Dear shareholder

Although marred by the low chrome price, the Group’s results indicate significant improvement in the year’s results compared to the prior year.

The Group’s revenue increased by 288% to R1.31 billion and generated cash from operating activities of R252m (2018: R89.1m). This was primarily attributable to recognition of the Black Chrome Operations for a full current financial year compared to seven months during the year ended 28 February 2018, as a consequence of the Black Chrome Operation acquisition recognition in July 2017.

Additionally, the Black Chrome Operations’ production was significantly ramped up to steady state average 90,000 tonnes per month by February 2019. The Group is planning on maintaining the current levels of production for the forthcoming financial year.

The consequential revenue growth was marred by a decrease in the chrome price toward the later part of the year ended 28 February 2019.

Condensed consolidated statement of financial position

Condensed consolidated statement of comprehensive income

Condensed consolidated statement of cash flows

1. Nature of business

The Group is a mining and exploration group, which focuses on Chrome mining in South Africa.

2. The provisional condensed consolidated financial statements for the year ended 28 February 2019 have been prepared by the Group’s financial reporting team, supervised by Chrometco’s Chief Financial Officer, Mr. Marcel Naude CA(SA) and approved by the Chrometco’s board of directors.

3. Basis of preparation

The provisional condensed consolidated annual financial statements for the year ended 28 February 2019 have been prepared in accordance with the framework concepts and the recognition and measurement criteria of International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, contains as a minimum information required by IAS 34 – Interim Financial Reporting, the Financial Reporting Pronouncements as issued by the Financial Reporting Accountants Council, the JSE Limited Listings Requirements and the South African Companies Act, 71 of 2008, as amended.

The accounting policies and methods of computation applied in the preparation of the condensed consolidated financial statements are in terms of IFRS and are consistent with those applied in the previous consolidated annual financial statements, except for the following new and revised accounting standards and amendments to standards became effective and had no significant impact on the Group’s financial statements:

IFRS 9 Financial Instruments (New standard):

On 1 March 2018, the Group adopted IFRS 9, which replaces the provisions of IAS 39 Financial Instruments: Recognition and Measurement that relate to the recognition, classification and measurement of financial assets and financial liabilities, derecognition of financial instruments, impairment of financial assets and hedge accounting. The adoption of the new "expected credit loss" impairment model under IFRS 9, as opposed to an incurred credit loss model under IAS 39, had a negligible impact on the carrying amounts of the Group’s financial assets given the short maturity of accounts receivables and the negligible historical level of customer default. The Group does not apply hedge accounting and the new rules for hedge accounting also have no impact.

IFRS 15 Revenue from Contracts with Customers (New standard):

On 1 March 2018, the Group adopted IFRS 15, which requires that revenue from contracts with customers be recognised upon the transfer of control over goods or services to the customer. The recognition of revenue upon transfer of control to the customer is consistent with the revenue recognition policy as set out in the Annual Financial Report dated 28 February 2018, as the condition is generally satisfied when title transfers to the customer. As such, on adoption, this requirement under IFRS 15 resulted in no impact to the Group’s financial statements as the timing of revenue recognition on Chrome sales is unchanged.

4. Provisional

The condensed consolidated financial statements for the period ended 28 February 2019 have not been reviewed or audited. The condensed consolidated financial statements presented in this SENS announcement do not include the information required pursuant to paragraph 16A(j) of IAS 34.

5. Going concern

The provisional condensed consolidated financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

6. Tangible assets

The group continues to actively explore options to dispose of the Rooderand operation. An offer of purchase was submitted to the owners and it is probable that a sale will be finalised within 12 months. Impairment of R5.1 million (R120.5 million in 2018) was recognised to write down the Rooderand operation to the lower of its carrying amount and its fair value less costs to sell.

Plans to dispose of non-mining assets were finalised during the 2019 financial year.  The sale of these assets is expected to occur within 12 months and hence these assets have been classified as held-for-sale in the financial statements. These assets are carried at the lower of carrying amount and fair value less costs to sell.