chrometco limited - sail to become the … circular_web_30... · 3 table of contents the...

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

The definitions and interpretations commencing on page 8 of this Circular apply mutatis mutandis to this

cover.

ACTION REQUIRED BY CHROMETCO SHAREHOLDERS

If you are in any doubt as to what action you should take, you should consult your CSDP, Broker, Banker,

Legal Adviser, Accountant or other professional adviser immediately.

If you have disposed of all of your Chrometco shares, please forward this Circular together with the

attached form of proxy (yellow), to the purchaser to whom, or the CSDP or Broker or Agent through whom

the disposal was effected.

Shareholders of Chrometco are referred to page 6 of this Circular, which sets out the action required by

them in respect of this Circular.

CHROMETCO LIMITEDIncorporated in the Republic of South Africa

(Registration number: 2002/026265/06)

Share code: CMO ISIN: ZAE000070249

(“Chrometco” or “the Company”)

CIRCULAR TO CHROMETCO SHAREHOLDERS

Regarding

– the acquisition by the Company of the Black Chrome Shares, the Palm Chrome Shares and the

Sail Mineral Shares, which acquisitions constitute a Category 1 transaction in terms of the JSE

Listing Requirements;

– a specific issue of shares for cash;

– the granting of authority to issue shares in terms of section 41(3) of the Companies Act; and

– a Waiver of a Mandatory Offer.

And incorporating

– Revised Listing Particulars in respect of the Company;

– a notice convening a general meeting of Chrometco shareholders; and

– a form of proxy (yellow), only for use by Certificated Shareholders and Dematerialised

Shareholders with “own-name” registration.

Transaction Adviser and

Designated Advisor

Independent Reporting

Accountants to Chrometco

Independent Reporting

Accountants to Black Chrome,

Palm Chrome and Sail Minerals

Independent Expert

to Chrometco

Independent Valuer

to Chrometco, Black Chrome

and Palm Chrome

Competent Person

to Chrometco, Black Chrome

and Palm Chrome

Date of issue: 30 May 2017

Copies of this Circular incorporating the Revised Listing Particulars are available in English only and may,

from Tuesday, 30 May 2017 until Tuesday, 18 July 2017 (both days inclusive), be obtained from the registered

office of Chrometco and PSG Capital, at the addresses set out in the “Corporate Information” section of this

Circular. A copy of this Circular will also be available on Chrometco’s website (www.chrometco.co.za).

1

CORPORATE INFORMATION

The definitions commencing on page 8 of this Circular apply mutatis mutandis to this Corporate Information

section.

Directors of Chrometco

Executive

P Cilliers (Managing Director)

N Waisberg (Financial Director)

Non-executive

J Scott (Chairman)*

E Bramley

R Rossiter*

I Collair*

* Independent

Registered office of Chrometco

71 Van Beek Avenue

Glenanda

Johannesburg, 2091

Sandton, 2196

(PO Box 758, Mondeor, 2110)

Incorporated in South Africa on 23 October 2002

Transaction Adviser and Transactional Designated

Advisor

PSG Capital Proprietary Limited

(Registration number 2006/015817/07)

1st Floor

Ou Kollege Building

35 Kerk Street

Stellenbosch, 7599

(PO Box 7403, Stellenbosch, 7599)

and at

2nd Floor

11 Alice Lane

Sandhurst

Sandton, 2196

(PO Box 987, Parklands, 2121)

Company secretary

The Green Board CC

(Registration number 2009/117784/23

71 Van Beek Avenue

Johannesburg, 2091

Sandton, 2196

(PO Box 758, Mondeor, 2110)

Independent Reporting Accountants and Registered

Auditors to Chrometco

Mazars

Mazars House

54 Glenhove Road

Melrose Estate

Johannesburg, 2196

(PO Box 6697, Johannesburg, 2000)

Independent Expert

BDO Corporate Finance

22 Wellington Road

Parktown

Johannesburg, 2193

(Private Bag X60500, Houghton, 2041)

Independent Reporting Accountants and Registered

Auditors to Black Chrome, Palm Chrome, Sail Minerals

and UWR

Moore Stephens Cape Town Inc.

2nd Floor Block 2 Northgate Park

Corner Section Street & Koeberg Rd

Paarden Eiland, 7405

(PO Box 1955, Cape Town, 8000)

Independent Valuer to Chrometco, Palm Chrome

and Black Chrome

Mineral Valuation Group Proprietary Limited

479 Cliff Avenue

Waterkloof Ridge Ext 2

Pretoria, 0181

2

Transfer Secretaries

Computershare Investor Services

Proprietary Limited

(Registration number 2004/003647/07)

Rosebank Towers, 15 Biermann Avenue

Rosebank, 2196

(PO Box 61051, Marshalltown, 2107)

Registered office of GSE

Unit 25

Sunninghill Office Park

No. 4 Peltier Drive

Sunninghill

2146

(PO Box 1553, Kelvin, 2054)

Registered office of Sail Minerals

Unit 25


No. 4 Peltier Drive

Sunninghill

2146


Incorporated on 18 June 2013 in Cape Town

Competent Person to Chrometco, Black Chrome

and Palm Chrome

Independent Resource Estimations cc

(2005/185799/23)

430 Ashmead Drive

Ramsgate

KZN

(PO Box 552 Ramsgate, KZN, South Africa, 4285)

Registered office of Black Chrome

Unit 25


No. 4 Peltier Drive

Sunninghill

2146


Incorporated on 9 February 2015 in Cape Town

Registered office of Palm Chrome

Unit 25


No. 4 Peltier Drive

Sunninghill

2146


Incorporated on 20 November 2015 in Cape Town

3

TABLE OF CONTENTS

The definitions and interpretations commencing on page 8 of this Circular apply mutatis mutandis to this table

of contents.

Page

CORPORATE INFORMATION 1

FORWARD-LOOKING STATEMENT DISCLAIMER 5

ACTION REQUIRED BY SHAREHOLDERS 6

SALIENT DATES AND TIMES 7

DEFINITIONS AND INTERPRETATIONS 8


1. Introduction and Purpose of this Circular 13

2. Rationale for the Transaction 14

3. Overview of the assets 15

4. The Transaction 20

5. Prospects 24

6. Authority to issue Chrometco Shares 24

7. Waiver of Mandatory Offer 24

8. Financial Information 25

9. General Meeting 27

10. Directors 27

11. Other Related Matters 28

12. Working Capital Statement 29

13. Expenses 30

14. Directors’ Recommendation 30

15. Litigation Statement 30

16. Advisors’ Consents 30

17. Directors’ Responsibility Statement 31

18. Documents Available for Inspection 31

ANNEXURES

Annexure 1 Historical financial information of Black Chrome for the year ended 29 February 2016 33

Annexure 2 Independent reporting accountant’s reports on the Historical Financial Information

of Black Chrome for the year ended 29 February 2016 42

Annexure 3 Interim financial information of Black Chrome for the six-month period ended

31 August 2016 44

Annexure 4 Independent reporting accountant’s report on the interim financial information of

Black Chrome for the six-month period ended 31 August 2016 49

Annexure 5 Historical financial information of Palm Chrome for the year ended 29 February 2016 51

4

Page

Annexure 6 Independent reporting accountant’s reports on the Historical Financial Information

of Palm Chrome for the year ended 29 February 2016 61

Annexure 7 Interim consolidated financial information of Palm Chrome for the six-month

period ended 31 August 2016 63

Annexure 8 Independent reporting accountant’s report on the interim consolidated financial

information of Palm Chrome for the six-month period ended 31 August 2016 70

Annexure 9 Historical financial information of Sail Minerals for the years ended 28 February 2015

and 29 February 2016 72

Annexure 10 Independent reporting accountant’s report on the Historical Financial Information of

Sail Minerals for the years ended 28 February 2015 and 29 February 2016 93

Annexure 11 Interim financial information of Sail Minerals for the six-month period ended

31 August 2016 95

Annexure 12 Independent reporting accountant’s report on the interim financial information of

Sail Minerals for the six-month period ended 31 August 2016 102

Annexure 13 Historical financial information of UWR for the years ended 30 June 2015 and

30 June 2016 104

Annexure 14 Independent reporting accountant’s report on the Historical Financial Information

of UWR for the years ended 30 June 2015 and 30 June 2016 131

Annexure 15 Interim financial information of UWR for the six-month period ended

31 December 2016 133

Annexure 16 Independent reporting accountant’s report on the interim financial information

of UWR for the six-month period ended 31 December 2016 140

Annexure 17 Pro forma financial information of Chrometco 142

Annexure 18 Independent reporting accountant’s report on the pro forma financial information

of Chrometco 147

Annexure 19 Independent Expert opinion on the Waiver of the Mandatory Offer 149

Annexure 20 Report of the Black Chrome Independent Professional Expert 154

Annexure 21 Report of the Palm Chrome Independent Professional Expert 287

Annexure 22 Revised Listing Particulars of Chrometco 373

APPENDIXES TO ANNEXURE 22

Appendix 1 Extracts from the Memorandum of Incorporation of Chrometco 391

Appendix 2 Other directorships held by Directors 395

Appendix 3 Corporate governance statement 397

Appendix 4 Share trading history of Chrometco 400

Appendix 5 Report of the Chrometco Independent Professional Expert 401

Appendix 6 Material Borrowings 560

NOTICE OF GENERAL MEETING OF CHROMETCO SHAREHOLDERS 563

ATTACHED

Form of proxy (yellow) in respect of the General Meeting (only for use by Certificated

Shareholders and Dematerialised Shareholders who have selected “own-name” registration)

5

FORWARD-LOOKING STATEMENT DISCLAIMER

The definitions and interpretations set out on page 8 of this Circular apply to this forward-looking statement

disclaimer.

This Circular contains statements about Chrometco and/or the Chrometco Group that are or may be forward-

looking statements. All statements other than statements of historical fact are, or may be deemed to be,

forward-looking statements. These forward-looking statements are not based on historical facts, but rather

reflect current expectations concerning future results and events and generally may be identified by the use

of forward-looking words or phrases such as “believe”, “aim”, “expect”, “anticipate”, “intend”, “foresee”,

“forecast”, “likely”, “should”, “planned”, “may”, “estimated”, “potential” or similar words and phrases.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and

depend on circumstances that may or may not occur in the future. Chrometco cautions that forward-looking

statements are not guarantees of future performance. Actual results, financial and operating conditions,

liquidity and the developments within the industry in which Chrometco operates may differ materially from

those made in, or suggested by, the forward-looking statements contained in this Circular.

All these forward-looking statements are based on estimates and assumptions made by Chrometco, as

communicated in publicly available documents by Chrometco, all of which estimates and assumptions,

although Chrometco believes them to be reasonable, are inherently uncertain. Such estimates, assumptions

or statements may not eventuate. Factors which may cause the actual results, performance or achievements

to be materially different from any future results, performance or achievements expressed or implied in those

statements or assumptions include other matters not yet known to Chrometco or not currently considered

material by Chrometco.

Shareholders should keep in mind that any forward-looking statement made in this Circular or elsewhere is

applicable only at the date on which such forward-looking statement is made. New factors that could cause

the business of Chrometco not to develop as expected may emerge from time to time and it is not possible to

predict all of them. Further, the extent to which any factor or combination of factors may cause actual results

to differ materially from those contained in any forward-looking statement are not known. Chrometco has no

duty to, and does not intend to, update or revise the forward-looking statements contained in this Circular

after the date of this Circular, except as may be required by law.

6

ACTION REQUIRED BY SHAREHOLDERS

The definitions and interpretations commencing on page 8 of this Circular apply mutatis mutandis to the

following action required by Chrometco Shareholders.

Please take careful note of the following provisions regarding the action required by Chrometco

Shareholders

1. If you are in any doubt as to what action to take, please consult your CDSP, broker, banker, attorney,

accountant or other professional adviser immediately.

2. If you have disposed of all your Chrometco Shares, please forward this Circular to the purchaser of

such Chrometco Shares or to the CSDP, broker, banker or other agent through whom the disposal was

effected.

3. The General Meeting, convened in terms of the notice incorporated in this Circular, will be held at

Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196, on Tuesday, 18 July 2017, commencing at

10:00.

4. GENERAL MEETING

4.1 If you hold Dematerialised Shares:

4.1.1 Own-name registration

You are entitled to attend, or be represented by proxy, and may vote at the General

Meeting of Chrometco. If you are unable to attend the General Meeting, but wish to be

represented thereat, you must complete and return the attached form of proxy (yellow),

in accordance with the instructions contained therein, to be received by the Transfer

Secretaries, Computershare Investor Services Proprietary Limited, Rosebank Towers,

15 Biermann Avenue, Rosebank, 2196 (PO Box 61051, Marshalltown, 2107) by no later

than 10:00 on Friday, 14 July 2017, provided that any form of proxy not delivered to the

Transfer Secretary by this time may be handed to the Chairman of the General Meeting

prior to the commencement of the General Meeting, at any time before the appointed proxy

exercises any shareholder rights at the General Meeting.

4.1.2 Other than own-name registration

If your CSDP or broker does not contact you, you are advised to contact your CSDP or

broker and provide them with your voting instructions. If your CSDP or broker does not

obtain instructions from you, they will be obliged to vote in accordance with the instructions

contained in the custody agreement concluded between you and your CSDP or broker. You

must not complete the attached form of proxy (yellow). In accordance with the custody

agreement between you and your CSDP or broker you must advise your CSDP or broker

timeously if you wish to attend, or be represented at the General Meeting. Your CSDP or

broker will be required to issue the necessary letter of representation to you to enable you

to attend, or to be represented at the General Meeting.

4.2 If you hold Certificated Shares

You are entitled to attend, or be represented by proxy, and may vote at the General Meeting. If you

are unable to attend the General Meeting, but wish to be represented thereat, you must complete

and return the attached form of proxy (yellow), in accordance with the instructions contained

therein, to be received by the Transfer Secretaries, Computershare Investor Services Proprietary

Limited, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196 (PO Box 61051, Marshalltown,

2107) by no later than 10:00 on Friday, 14 July 2017, provided that any form of proxy not delivered

to the Transfer Secretary by this time may be handed to the Chairman of the General Meeting prior

to the commencement of the General Meeting, at any time before the appointed proxy exercises

any shareholder rights at the General Meeting.

7

SALIENT DATES AND TIMES

The definitions and interpretations commencing on page 8 of this Circular apply mutatis mutandis to this

salient dates and times section.

2017

Record date to determine which Shareholders are eligible to receive the Circular Friday, 19 May

Circular containing Revised Listing Particulars, notice of General Meeting and form of

proxy (yellow) posted to Shareholders and announced on SENS on Tuesday, 30 May

Last day to trade in order to be eligible to vote at the General Meeting Tuesday, 4 July

Record date to be eligible to vote at the General Meeting Friday, 7 July

Last day to lodge forms of proxies in respect of the General Meeting by 10:00 on Friday, 14 July

General meeting of Chrometco Shareholders to be held at 10:00 on Tuesday, 18 July

Results of the General Meeting released on SENS on Tuesday, 18 July

Note

1. The above dates and times are subject to amendment. Any such amendment will be released on SENS.

8

DEFINITIONS AND INTERPRETATIONS

In this Circular, unless the context indicates otherwise, reference to the singular shall include the plural and

vice versa, words denoting one gender include the others, words and expressions denoting natural persons

include juristic persons and associations of persons and the words and expressions in the first column have

the meanings stated opposite them in the second column.

“Acquisitions” the acquisition by Chrometco of the Black Chrome Shares, the Palm

Chrome Shares and the Sail Mineral Shares, in terms of the Black Chrome

Agreement and the Palm Chrome Agreement;

“Acquisition Shares” 2 405 000 000 (two billion four hundred and five million) Chrometco

shares, being the Black Chrome Purchase Consideration and the Palm

Chrome Purchase Consideration;

“Act” or “Companies Act” the Companies Act, 2008 (Act 71 of 2008), as amended;

“Agreements” collectively, the Black Chrome Agreement, the Palm Chrome Agreement,

the Subscription Agreement and the Subcontracting Agreement;

“ Amended and Restated Senior

Debt Loan Agreement”

the agreement entered into between the IDC, UWR and Black Chrome

on 17 August 2016 and in respect of the loan from the IDC to UWR;

“Batlhalerwa” Batlhalerwa Resources Company Proprietary Limited, registration

number 2011/11003307, a private company incorporated and registered

in accordance with the laws of South Africa;

“BEE” broad-based black economic empowerment as envisaged in the

BEE Act;

“BEE Act” the Broad-Based Black Economic Empowerment Act, No. 53 of 2003

as amended or substituted from time to time;

“Black Chrome” Black Chrome Holdings Proprietary Limited, registration number

2015/017156/07, a private company incorporated and registered in

accordance with the laws of South Africa on 9 February 2015;

“Black Chrome Acquisition” the acquisition by Chrometco of the shares in Black Chrome and Sail

Minerals set out in the Black Chrome Agreement;

“Black Chrome Agreement” the Share Swap Agreement entered into on 24 August 2016, between

Chrometco, Sail Minerals and GSE, in terms of which Chrometco will

acquire the Black Chrome Shares and the Sail Minerals Shares from GSE

in exchange for the Black Chrome Purchase Consideration, subject to

the fulfilment of the conditions precedent, a copy of which is available for

inspection by Shareholders as per paragraph 18 below, the salient terms

of which are set out in paragraph 4 of this Circular;

“ Black Chrome Purchase

Consideration”

2 205 000 000 (two billion two hundred and five million) Chrometco

Shares;

“Black Chrome Shares” 51 ordinary shares, being 51% of the of the issued share capital of Black

Chrome;

“Business Day” any day, other than a Saturday, Sunday or official public holiday in

South Africa;

“Business Rescue Practitioner” the UWR business rescue practitioner, Piers Marsden of Matuson

Associates, appointed in February 2013;

“Cents” South African cents;

“Certificated Shareholders” Chrometco Shareholders who hold Certificated Shares;

9

“Certificated Shares” Chrometco Shares which have not been dematerialised, title to which is

represented by a share certificate or other document of title;

“Chrometco Mining Services” or

“Manco”

Chrometco Mining Services Proprietary Limited, registration number


accordance with the laws of South Africa, a wholly-owned subsidiary of

Chrometco;

“Chrometco Shares” or “Shares” ordinary shares in Chrometco;

“Chrometco Shareholders” or

“Shareholders”

holders of Chrometco Shares, which includes Certificated Shareholders,

Dematerialised Shareholders and Dematerialised own-name

Shareholders;

“CIPC” the Companies and Intellectual Property Commission established in

terms of the Companies Act;

“Circular” this document distributed to Shareholders and dated Tuesday, 30 May

2017, containing the Circular to Chrometco Shareholders, annexures,

the notice of General Meeting, a form of proxy (yellow) and Revised

Listing Particulars;

“Common Monetary Area” South Africa, the Republic of Namibia and the Kingdoms of Lesotho

and Swaziland;

“ Computershare” or

“the Transfer Secretaries”

Computershare Investor Services Proprietary Limited, registration

number 2004/003647/07, a private company incorporated and registered

in accordance with the laws of South Africa;

“ the Company” or “Chrometco”

or “Chrometco Group”

Chrometco Holdings Limited, registration number 2002/026265/06,

a public company incorporated and registered in accordance with the

laws of South Africa and its subsidiaries;

“CSDP” a central securities depository participant registered in terms of the

Financial Markets Act, with whom a beneficial holder of Chrometco

Shares holds a dematerialised share account;

“DCM” DCM Chrome Propriety Limited, registration number 2007/012660/07,

a private company incorporated and registered in accordance with the

laws of South Africa;

“Dematerialised Shares” Chrometco Shares which have been incorporated into the Strate system

and which are no longer evidenced by certificates or other physical

documents of title;

“Dematerialised Shareholders” Chrometco Shareholders who hold Dematerialised Shares;

“ Dematerialised own-name

Shareholders”

Chrometco Shareholders who hold Dematerialised Shares and who have

instructed their CSDP to hold their Chrometco Shares in their own name

on the sub-register;

“Directors” or “Board” the Directors of Chrometco, details of whom are set out in paragraph 11

of the Circular;

“DMR” Department of Mineral Resources;

“Documents of Title” share certificates, certified transfer deeds, balance receipts or any other

physical documents of title pertaining to the Chrometco Shares in

question acceptable to the board of Chrometco;

“Emigrant” any emigrant from South Africa whose address is outside South Africa,

the Republic of Namibia and the Kingdoms of Lesotho and Swaziland;

“Exchange Control Regulations” the Exchange Control Regulations, 1961, as amended, promulgated in

terms of section 9 of the Currency and Exchanges Act 1933, as amended;

“Financial Markets Act” the Financial Markets Act, Act 19 of 2012;

10

“General Meeting” the General Meeting of Chrometco Shareholders to be held at 10:00 on

Tuesday, 18 July 2017 at Rosebank Towers, 15 Biermann Avenue,

Rosebank, 2196 convened in terms of the notice of General Meeting

enclosed and forming part of this Circular;

“GSE” Grand Slam Enterprises Proprietary Limited, previously K2016291369

(South Africa) Proprietary Limited, registration number 2016/291369/07,


laws of South Africa, 100% owned by a family trust which is controlled

by William Fan Yang;

“IDC” Industrial Development Corporation of South Africa Limited, a corporation

established under Section 2 of the Industrial Development Corporation

Act, 1940 (Act No. 22 of 1940);

“IFRS” International Financial Reporting Standards;

“Income Tax Act” Income Tax Act, 1962 (Act 58 of 1962), as amended;

“JSE” the exchange operated by the JSE Limited, registration number

2005/022939/06, a public company incorporated and registered in

accordance with the laws of South Africa and licensed as an exchange

under the Financial Markets Act;

“JSE Listings Requirements” the Listings Requirements of the JSE;

“Last Practicable Date” the last practicable date before finalisation of this Circular, which date

was Friday, 19 May 2017;

“Loan Facility Agreement” or

“Loan Facility”

the loan agreement concluded between Sail Minerals and Chrometco on

24 August 2016 in terms of which Sail Minerals will extend a loan facility

of R10 million to Chrometco;

“Management Agreement” the agreement concluded between Sail Minerals and UWR on 21 June

2016, in terms of which Sail Minerals is appointed as the contractor to

UWR, and in respect of the mining operations of UWR;

“Mandatory Offer” the mandatory offer in terms of section 123 of the Act that will be triggered

by the issue of the Acquisition Shares to GSE, which will result in GSE

owning in excess of 35% of the issued share capital of Chrometco;

“ MOI” or “Memorandum of

Incorporation” the Chrometco Memorandum of Incorporation;

“Mine Act” Mine Health and Safety Act 29 of 1996;

“Minister” the Minister of Mineral Resources and shall include any person to whom

the Minister has delegated the requisite powers and functions to in terms

of section 103 of the MPRDA;

“Mooihoek” the mine owned by UWR, the details of which are set out in paragraph 3.1

of this Circular;

“MPRDA” Mineral and Petroleum Resources Development Act, 28 of 2002;

“Own-name Registration” the registration of Chrometco Shareholders who hold Chrometco Shares

that have been dematerialised and are recorded by the CSDP on the

sub-register kept by that CSDP in the name of such Chrometco

Shareholder;

“Palm” Palm Chrome Proprietary Limited, registration number 2015/016957/07,


laws of South Africa and a 74% held subsidiary of Palm Chrome;

11

“Palm Chrome” Palm Chrome Holdings Proprietary Limited, registration number


accordance with the laws of South Africa on 20 November 2015;

“Palm Chrome Acquisition” the acquisition by Chrometco of the shares in Palm Chrome set out in the

Palm Chrome Agreement;

“Palm Chrome Agreement” the Share Swap Agreement entered into on 24 August 2016, between

Chrometco, Sail Minerals and GSE, in terms of which Chrometco will

acquire the Palm Chrome Shares from GSE in exchange for the Palm

Chrome Purchase Consideration, subject to the fulfilment of the conditions

precedent, a copy of which is available for inspection by Shareholders

as per paragraph 19 below, the salient terms of which are set out in

paragraph 4 of this Circular and available on the Company’s website,

www.chrometco.co.za;

“ Palm Chrome Purchase

Consideration” 200 000 000 (two hundred million) Chrometco Shares;

“Palm Chrome Shares” 51 ordinary shares, being 51% of the of the issued share capital of Palm

Chrome;

“PGM” platinum group metals;

“Prime” means the publicly quoted rate (per cent, per annum) from time to time

charged by ABSA Bank for similar amounts on unsecured overdraft to its

prime customers in good standing in the private sector, as certified by

any manager of that bank whose appointment it will not be necessary to

prove, calculated on a daily basis and compounded monthly in arrears;

“Prospecting Right” the Palmietfontein prospecting right held by Palm Chrome;

“PSG Capital” PSG Capital Proprietary Limited, registration number 2006/015817/07,


laws of South Africa, being the transaction adviser and designated

advisor to the Chrometco Group;

“Rand” or “R” South African Rand;

“Register” the register of certificated Shareholders maintained by the Transfer

Secretaries and the sub-register of dematerialised Shareholders

maintained by the relevant CSDP’s;

“Revised Listing Particulars” the revised listing particulars of Chrometco, as required by the JSE

Listings Requirements and as set out in Annexure 22, which will only be

effective if the Transaction is approved by Chrometco Shareholders;

“Rooderand” Rooderand Chrome Proprietary Limited, registration number


accordance with the laws of South Africa;

“Sail Minerals” Sail Minerals Proprietary Limited, registration number 2013/101076/07,


laws of South Africa;

“Sail Minerals Shares” 34 ordinary shares, representing 25% of the issued share capital of

Sail Minerals;

“SENS” the Stock Exchange News Service of the JSE;

“Share Certificates” Share Certificates evidencing the Shares held by Certificated

Shareholders or any other Document of Title acceptable to the Board

in its sole discretion;

“South Africa” the Republic of South Africa;

12

“Specific Issue” the issue of the Specific Issue Shares at an issue price of R0.08

(eight cents) per Chrometco Share, for a total value of R5 000 000

(five million Rand);

“Specific Issue Shares” 62 500 000 (sixty-two million five hundred thousand) Shares in the

authorised share capital of the Company to be issued by the Company

to GSE;

“Subcontracting Agreement” the Subcontracting Agreement entered into on 17 January 2017 between

Chrometco Mining Services, Sail Minerals and GSE, in terms of which

Sail Minerals will appoint Chrometco Mining Services as its exclusive

subcontractor in respect of the mining operations of UWR;

“Subscription Agreement” the Share Subscription Agreement entered into on 24 August 2016,

between Chrometco and Sail Minerals, or its nominee GSE, in terms of

which Chrometco will issue the Specific Issue Shares in exchange for

R5 million, subject to the fulfilment of the conditions precedent, a copy of

which is available for inspection by Shareholders as per paragraph 18

below, the salient terms of which are set out in paragraph 4 of this

Circular;

“Strate” Strate Proprietary Limited, registration number 1998/022242/07, a private

company incorporated in accordance with the laws of South Africa and

which is a registered central securities depository responsible for the

electronic custody and settlement system used by the JSE;

“Transaction” the Specific Issue and the Acquisitions;

“Takeover Regulation Panel” or

“TRP”

the Takeover Regulation Panel, established in terms of section 196 of the

Companies Act;

“Umnotho weSizwe” or “UWR” Umnotho weSizwe Resources Proprietary Limited, registration number


accordance with the laws of South Africa, the shareholders being Black

Chrome (64%), Mason Resources (7%), Khumo Africa Capital (Pty)

Limited (16%), a community trust (3%) and the IDC (10%);

“VWAP” volume weighted average price; and

“Waiver of the Mandatory Offer” the waiver of the Mandatory Offer by way of an ordinary resolution

adopted by the independent holders of more than 50% of the general

voting rights of all the issued shares of Chrometco in terms of

regulation 86(4) of the Regulations and approved by the TRP.

13





Directors

Jonathan Scott (Independent non-executive Chairman)

Petrus Cilliers (Managing Director)

Namir Waisberg (Financial Director)

Edward Bramley (Non-executive Director)

Richard Rossiter (Independent non-executive Director)

Ivan Collair (Independent non-executive Director)


1. INTRODUCTION AND PURPOSE OF THE CIRCULAR

1.1 Shareholders are referred to the announcement released on SENS on 25 August 2016 detailing the

proposed Acquisitions and Specific Issue, collectively referred to as the Transaction.

1.2 The Acquisitions constitute a reverse takeover in terms of the JSE Listings Requirements and

require Chrometco Shareholder approval by way of an ordinary resolution. The salient terms of the

Acquisitions are set out in paragraph 4 of this Circular.

1.3 The Specific Issue constitutes a specific issue of shares for cash in terms of the JSE Listings

Requirements and requires Chrometco Shareholder approval by way of an ordinary resolution

requiring a 75% majority approval. The salient terms of the Specific Issue are set out in paragraph 4

of this Circular.

1.4 The voting power of the Acquisition Shares to be issued in terms of the Acquisitions will be in excess

of 30% of the voting power of all Chrometco Shares held by Chrometco Shareholders prior to the

issue of the Acquisition Shares. Accordingly, it is necessary to obtain the authority of Chrometco

Shareholders by way of a special resolution, as required in terms of section 41(3) of the Companies

Act, in order to proceed with the issue of Acquisition Shares in terms of the Acquisitions. The details

of the approval to issue the Acquisition Shares, in terms of Section 41(3) of the Companies Act, are

set out in paragraph 6 of this Circular.

1.5 As a consequence of the Acquisitions, GSE will control in excess of 35% (thirty-five percent) of the

issued share capital of the Company and will thus be obliged to make the Mandatory Offer unless

same is waived in accordance with the provisions of regulation 86(4) of the Companies Regulations.

A condition precedent to the Acquisitions is the granting of the Waiver of the Mandatory Offer by

way of an ordinary resolution. The salient terms of the Mandatory Offer are set out in paragraph 7

of this Circular.

1.6 The purpose of this Circular is to provide Chrometco Shareholders with the requisite information in

accordance with the JSE Listings Requirements, to enable Chrometco Shareholders to make an

informed decision in respect of the proposed resolutions, as set out in the notice of the General

Meeting enclosed with this Circular.

14

1.7 As a term of the Loan Facility Agreement, N Waisberg has been appointed as a Director to

the Board, which appointment requires ratification by Shareholders in terms of the Act and the

Company’s MOI.

1.8 In addition, the purpose of this Circular is to issue Revised Listing Particulars pursuant to and

conditional upon the implementation of the Transaction, as the Acquisitions are classified as a

reverse takeover in terms of the JSE Listings Requirements for which Chrometco will issue more

than 100% of the Chrometco Shares currently in issue and accordingly Revised Listing Particulars

are included in Annexure 22 to the Circular.

2. RATIONALE FOR THE TRANSACTION

2.1 The recapitalisation of the Company includes the Specific Issue and the Loan Facility between

Chrometco and Sail whereby Sail, or its nominee GSE will provide a facility of up to R10 million

to Chrometco. In terms of the loan, Sail will have the right to appoint a Director onto the board of

Chrometco, as set out in paragraph 1.7 above.

2.2 The Specific Issue and the Loan Facility will ensure that the Company has more than sufficient

funding to sustain itself for the year ahead and beyond, as well as to cover the costs relating to the

implementation of the Transaction.

2.3 The asset controlled by Black Chrome has the potential to contribute significantly to the income of

Chrometco. It is planned to become cash-generative in the near future and earnings enhancing for

all shareholders in the near future. Black Chrome is a fully developed underground chrome mine

having an approximated economically minable resource in excess of 20 000 000 (20 million) tonnes

of Chrome ore with an expected life of at least 15 years.

2.4 The Palm Chrome asset also has the potential to enhance earnings for all shareholders once the

Prospecting Right is converted into a mining right and mining operations begin. Palm Chrome has

at least 1 400 000 (one million four hundred thousand) tonnes of economically feasible chrome ore

with an expected life of five to seven years, depending on the rate of mining.

2.5 The Black Chrome and Palm Chrome assets are being acquired by Chrometco as assets that are

fully funded by Sail and therefore will not require shareholder funding. Sail Minerals is a privately

owned, well-established South African-based global company and is considered one of the

leading Chrome trading companies worldwide. Sail invests in mine resource assets (greenfield and

brownfield projects) within the borders of South Africa. Sail specialises in the marketing, distribution

and logistics of chrome and other ferro-related products.

2.6 The surrounding communities are included in the BEE consortiums of the respective projects

and will benefit directly, economically and socially through job creation and agreed upon social

upliftment programmes respectively. Local businesses will also benefit, being preferred suppliers

as agreed with the respective communities. The communities and their leaders are in favour of and

have approved the Transaction.

2.7 Chrometco has two mining rights on the farm Rooderand, with mining rights for Chrome and

PGMs respectively. After the failed disposal of Rooderand in 2010 to DCM Chrome Proprietary

Limited (who went insolvent subsequently) Chrometco made several attempts to extract value from

Rooderand, but market conditions, the specific location of the mine and geological faulting made

it very difficult. As a result Chrometco was poorly placed to develop a steady income-generating

business.

The proposed Transaction addresses the major items that the board concerned itself with over the

last few years.

2.7.1 The Specific Issue, in combination with the loan facility strengthens the Company’s cash

position, enabling the mobilisation of advisors for the preparation of the information required

to be included in this Circular.

2.7.2 The acquisition of Black Chrome, with a mine that is planned to go into production relatively

soon, will provide a secure cash flow income to Chrometco.

15

2.7.3 The acquisition of Palm Chrome, as a good quality prospecting right, provide blue sky

upside to the Group.

2.7.4 Both Black Chrome and Palm Chrome are being acquired by Chrometco as fully funded

projects. All funding came and will continue to come from Sail Minerals.

In summary, the proposed Transaction will transform Chrometco from a company with a single asset,

to a company with a basket of assets varying from close to operational to blue sky exploration.

The strategic ties with Sail Minerals will enable a secure offtake and fair prices for the chrome ore

being mined.

3. OVERVIEW OF THE ASSETS

3.1 Black Chrome

Black Chrome has entered into agreements to acquire a controlling interest of 64% in UWR,

which is the owner of the mine pursuant to the mining right (MPT No. 36/2009 MR) in respect of a

portion of Portion 1 and Portion 2 of the farm Mooihoek 255, Registration Division KT, Magisterial/

Administrative District of Sekhukhune, Limpopo Province, measuring 3564.1386 hectares. The

acquisition by Black Chrome of UWR is subject to the receipt of written consent required in terms

of section 11 of the MPRDA from the Minister in order to effect the change in control of Umnotho

weSizwe to Black Chrome. Currently, UWR is in business rescue.

3.1.1 Overview

The Mooihoek Chromite Deposit is situated in the Central portion of the Eastern limb of

the Bushveld Complex. It is situated on the Mooihoek and Maandagshoek farms in the

Lydenburg district of the Northern Province. The deposit contains two predominate

chromite reefs known as the LG6 and LG6A; the former reef is currently being extensively

mined in the area. Mining of the reefs formerly took place on the project during 1988 to

1989 by Samancor. During this time approximately 100 000 tons were mined. It is our

belief that mining was abandoned because of low market ferrochrome prices at that time

and the long distance between Mooihoek and its owner’s furnaces and other factors that

are no longer present. Black Chrome Mine has reached steady state production and is

currently producing 30 000 tons per month of chrome ore. The mine currently employs over

300 permanent staff.

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3.1.2 Geological resource

At the Mooihoek property, the LG6 seam varies in thickness from 1m to 1.4m at the bottom

and has disseminated chromite hangingwall and footwall contact zones and is parted from

the LG6A seam by chromitiferous pyroxenites of between 0.9m to 1.2m thick. The LG6A

seam has a sharp footwall contact, a gradational hanging wall contact and an average

17

width of 0.38m. Analytical results from 39 surface drillholes on the property intersecting

both the LG6 and LG6A chromitite layers substantiate the geochemical continuity known

throughout the explored area and indicate that the chromite grade is similar to that being

profitably mined elsewhere in the Bushveld Complex.

A mineral resource estimate yields a Measured Mineral Resource of 9.3Mt at an in situ

grade of 44% Cr2O

3, an Indicated Mineral Resource of 8.2Mt at an in situ grade of 43%

Cr2O

3, and an Inferred Mineral Resource of 2.7Mt at 43% Cr

2O

3; all at a cut-off grade of

40% Cr2O

3.

These Mineral Resource figures are reported in accordance to the 2016 SAMREC code,

and only represent the two dominate seams; LG6 and LG6A.

The competent persons report set out in Annexure 20 on Mooihoek is currently held

by UWR which will become a subsidiary of Black Chrome post the approval of the

section 11 consent.

Mooihoek is an existing and fully developed underground mine whose new order mining

right is held by UWR. The mine has approximately R1 billion of existing infrastructure and

equipment (funded by the previous shareholders). The Mooihoek CPR, estimates the mine

having at least 20 000 000 tons of saleable chrome ore in reserves with a remaining life of

mine of at least 15 years.

Due to mismanagement UWR and then poor chrome prices, UWR was put into business

rescue in February 2013. Prior to UWR entering business rescue, the mine was operational

and was selling chrome ore to the domestic market and supplying the Chinese export

market. Since being placed in business rescue, the mine was placed under care and

maintenance, as per the DMR requirements.

Currently, the mine is fully compliant with DMR specifications. Production at the mine

commenced on 1 October 2016 and approximately 6 800 tons of chrome ore was sold

during the month of October 2016. UWR currently employees 10 full-time staff, including

a general manager and financial manager who oversee the performance of the mining

contractor. 169 employees have been hired, of which 101 employees come from the local

community.

3.1.3 Manco

As the consent in terms of section 11 of the MPRDA from the Minister is still in process,

the business rescue practitioner maintains effective control over UWR. As a result and in

order for Sail Minerals to have effective control over the Mooihoek Mine, the Management

Agreement was entered into on 21 June 2016 between the business rescue practitioner,

acting on behalf of UWR, and Sail Minerals.

The Management Agreement places Sail Minerals in a similar position as if it had legal title

to the mine until such time that the section 11 consent is received.

Sail Minerals has commenced with mining and chrome ore production at the mine, in

line with the authority granted to it by the Business Rescue Practitioner. Sail Minerals,

therefore, implemented the interim solution, being the Management Agreement, which has

enabled it to start production immediately without having to wait for the ministerial consent.

Sail Minerals already receives economic benefit of the mine.

In terms of the Management Agreement, all operating costs and capital expenditure of the

Mooihoek mine are for the account of Sail Minerals. Furthermore, all revenue received from

the sale of chrome ore accrues to Sail Minerals, excluding the R50/ton royalty paid to UWR.

In terms of the Black Chrome Acquisition, Sail Minerals will appoint Chrometco Mining

Services as its exclusive subcontractor for the mining of the Black Chrome mining project

and in terms of the Management Agreement. Once the section 11 approval has been

granted and the shareholding has changed, the Management Agreement will terminate

as it will no longer be required.

For the Black Chrome Acquisition to be fully effective, two section 11 approvals are required.

The first is for the approval of the change in majority shareholding of UWR to Black Chrome

and the second being the change in majority shareholding of Black Chrome to Chrometco.

18

The first section 11 application has been filed with the DMR in Limpopo on 13 October

2016. The DMR has indicated that they are processing the application and at the Last

Practicable Date did not require any further action and no further information is required.

Sail Minerals has committed to everything required to ensure that the section 11 approval

is granted as quickly as possible.

To ensure that the Mooihoek asset, being the major asset of the Company post the

Acquisitions, is managed effectively by Chrometco. Chrometco, Chrometco Mining

Services, GSE and Sail Minerals entered into the Subcontracting Agreement in terms of

which Chrometco will issue 49% of the issued share capital in Manco to GSE in exchange for

the sub-contracting of the Management Agreement in its entirety to Manco. In addition, the

parties have agreed that Chrometco will have the right at all times to appoint the majority of

the board members of Manco. This is to ensure that Chrometco controls the Black Chrome

mine during the period until the receipt of the written consent required in terms of section

11 of the MPRDA from the Minister in order to affect the transfer of the shares in UWR

to Black Chrome.

In terms of the business rescue proceedings, once the section 11 approval for the change

in control of UWR to Black Chrome has been granted, Sail Minerals will be required to pay

R100 million to the IDC as the preferred creditor of UWR. At this point the Business Rescue

Practitioner will take UWR out of business rescue and the section 11 approval can be

executed.

Once this has been executed, the Management Agreement will terminate as Black Chrome

will be the majority shareholder of UWR and the Subcontracting Agreement will come into

effect.

The Management Agreement of UWR is an arrangement between Sail Minerals and the

business rescue practitioner, which allows Sail Minerals to operate the Mooihoek mine.

On the same terms, Chrometco Mining Services will be appointed as the sub-contractor

of Mooihoek by Sail Minerals. In term of this agreement Chrometco Mining Services must,

provide, or in some cases continue to provide, the following services, inter alia:

Maintain all statutory records;

Conduct mining at the Mooihoek mine, in terms of the MPRDA;

Maintain all accounting records;

Report on mining operations on a monthly basis to UWR stakeholders;

Acquire all equipment required for the mining operations, as and when required;

Fund operating costs;

Use UWR, or sub-contract employees;

Comply with all regulatory requirements;

Assume all liabilities; and

Maintain security and control access to the site.

Sail Minerals has appointed several contractors to execute this mandate. Chrometco will

retain the same service provider on the same terms, being:

Sail Contracting Proprietary Limited was appointed as the mining contractor to mine the

Mooihoek mine.

A security company to regulate access.

Other technical and specialised services.

Sail Minerals, however, has maintained control over the mine and manages all contractors

involved on the mine and in the mining operations. Once the Transaction is unconditional,

the control of Mooihoek will vest with Manco.

Sail Minerals also retained the core staff, including the mine manager, responsible for the

historic care and maintenance stage of the mine, which staff will fall under the control of

Manco once the Transaction becomes unconditional.

The terms set out above also apply to the subcontracting agreement.

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3.2 Palm Chrome

3.2.1 Overview

The Palmietfontein prospecting right owned by Palm Chrome was granted on

15th February 2016 and expires on 14 February 2019. This right is located proximally to,

and partly overlaps, the southwestern perimeter of the Pilanesberg National Park,

approximately 200 km northwest of Johannesburg. The prospecting right application

(NW 30/5/1/1/2/1062 PR) is for PGM, Chrome, Ore, Diamonds and Nickel Ore in respect of

farm Palmietfontein 208, portions 2, 3, 4, 5 and 6, Registration Division JP, situated in the

Magisterial District of Mankwe, North West Province.

The terms of the prospecting right is as follows:

Item Detail

Type of Mineral(s) Chrome Ore (Cr)

Type of Mineral(s) Continued Nickel Ore (Ni)

Type of Mineral(s) Continued Platinum Group Metals (PGM)

Duration 3 (three) Years

Locality

(direction and distance from nearest town)

Approximately 80 km NNW from

Rustenburg, North West Province

Extent of the area required for prospecting Approximately 3260.84 Hectares

Geological formation Western Limb of the Bushveld Complex

20

From the amended Environmental Management Plan (EMP) (Appendix B), it can be seen

that chromitite layers have been encountered predominantly in the southwestern portion

of the prospecting area.

3.3 Chrome Ore Market and overview

The largest Chrome reserves in the world occur in Southern Africa and are mostly associated with

PGMs as part of the Bushveld Igneous Complex. Chrome ore from South Africa makes up over 50%

of the world-wide Chrome Ore market.

The rapid increase in electricity and labour costs makes South Africa unattractive as a smelter

destination. The smelter capacity lost in South Africa over the last 18 months has moved to China

and India, territories with much less resources. This is not a trend that will reverse in the foreseeable

future, and as a result, the demand for Chrome ore exports to China and India increased and is

expected to remain at the increased level.

In light of these macro factors, the timing of the acquisitions of the two Chrome projects and the

strategic alliance with Sail has the potential to transform Chrometco into a world-leading Chrome

ore producer and exporter.

3.4 Sail Minerals

Sail is an international commodity trading company with a special focus on Chrome. It invented

the Chrome market’s benchmark product, Run Of Mine “ROM”. Sail has exported a significant

volume of Chrome ore over the last few years. Its significant trading volume is enhanced by its

innovative market developments, which unlock unique value for both its suppliers and customers.

Sail Minerals does not own any mineral or mining assets.

4. THE TRANSACTION

The Transaction will result in a total of 2 467 500 000 Chrometco Shares to be issued, constituting an

additional 897% of the Chrometco Shares currently in issue, and the granting by Sail of the Loan Facility

of up to R10 000 000, implying a deal value of approximately R198 million, based on a Chrometco share

price of R0.08 per share.

4.1 Black Chrome Acquisition

4.1.1 Salient terms of the Black Chrome Agreement

In terms of the Black Chrome Agreement, Chrometco will acquire 51% of the shares in Black

Chrome and 25% of the shares in Sail Minerals from GSE in exchange for 2 205 million

Chrometco ordinary shares at an issue price of 8 cents per Share. Sail Minerals will appoint

Chrometco Mining Services as its exclusive subcontractor for the mining of the Black

21

Chrome mining project and in terms of the Subcontracting Agreement. The effect thereof will

be that Chrometco will control the operations of Black Chrome and UWR, notwithstanding

the pending ministerial consent in terms of section 11 of the MPRDA.

4.1.2 The description assets and project of the Black Chrome Acquisition

The Black Chrome project is a fully developed underground chrome mine in the eastern

limb of the Bushveld complex having an approximated economically minable resource in

excess of 20 million tonnes of chrome ore. The life span is expected to be about 15 years.

Sail Minerals is a well-established and leading Chrome trading company, which

predominantly exports Chrome to China. Sail has provided and will provide all funding

required for the development of the Palm Chrome and Black Chrome assets.

As set out in Annexures 1 and 7, Black Chrome has a net asset value of (R368 784) as

at 29 February 2016. The difference between the last reported net asset value of Black

Chrome and the Black Chrome Purchase Consideration is ascribed to the subscription

acquisition by Black Chrome of 64% shareholding interest in UWR, whose primary asset

Mooihoek has recently been valued at R1.5 billion.

Post the completion of the Transaction, this will be the major asset of the Company.

4.1.3 Conditions precedent and settlement of purchase consideration

The purchase consideration for the Black Chrome Acquisition will be settled in two traches,

as follows:

4.1.3.1 Black Chrome Tranche 1

The issue by Chrometco to GSE of 835 million Chrometco ordinary shares subject

to the fulfilment of the following outstanding conditions precedent:

the approval by the Company’s shareholders of the issue of shares to GSE in

terms of section 41(3) of the Companies Act;

the approval by the Company’s shareholders of the waiver of the requirement

for GSE to make a mandatory offer to shareholders in terms of section 123 of

the Companies Act and regulation 86(4) of the Companies Regulations 2011;

the approval of the Black Chrome Acquisition by Chrometco shareholders

in terms of the Listings Requirements of the JSE;

Manco, a 51% subsidiary of Chrometco, will be appointed as the exclusive

contractor in terms of its Subcontracting Agreement, the effect of which will

give Manco effective benefit and control of the Black Chrome mining project

which will be in place until the fulfilment of the conditions precedent set out

in paragraph 4.1.3.2 below; and

any other regulatory approvals as may be required.

The effective date of the Black Chrome Tranche 1 is the third business day after

the fulfilment of the abovementioned outstanding conditions precedent.

Once the Black Chrome Tranche 1 conditions precedent have been fulfilled an

application to the JSE for the listing of 835 million Chrometco shares will be made

by Chrometco.

4.1.3.2 Black Chrome Tranche 2

The issue by Chrometco of 1 370 million Chrometco ordinary shares subject to the

fulfilment of the following conditions precedent:

– the receipt of the written consent required in terms of section 11 of the MPRDA

from the Minister in order to effect the transfer of the shares in Black Chrome

to Chrometco;

The effective date of the Black Chrome Tranche 2 Acquisition is the third business

day after the fulfilment of the condition precedent set out above.

Once the Black Chrome Acquisition has become unconditional an application

to the JSE for the listing of 1 370 million Chrometco shares will be made by

Chrometco.

22

4.1.4 Warrantees

In terms of the Black Chrome Agreement Sail Minerals and GSE has warranted that:

Black Chrome Holdings is the beneficial owner and will become the registered owner

of 44 800 ordinary shares, constituting 64% of the total issued share capital of Umnotho

weSizwe, upon Umnotho weSizwe receiving written consent required in terms of section

11 of the MPRDA from the Minister in order to effect the change in control of Umnotho

weSizwe to Black Chrome;

and no person has any right to obtain an order for the rectification of the register of

members of Umnotho weSizwe; and

no person other than Black Chrome Holdings has any right, whether pursuant to any

option, right of first refusal or otherwise, to subscribe for any unissued shares in Umnotho

weSizwe or to acquire any issued shares in Umnotho weSizwe.

4.2 Palm Chrome Acquisition

4.2.1 Salient terms of the Palm Chrome Agreement

In terms of the Palm Chrome Agreement, Chrometco will acquire 51% of the shares in Palm

Chrome from GSE in exchange for 200 million Shares at an issue price of 8 cents per Share.

4.2.2 The description assets and project of the Palm Chrome Acquisition

Palm Chrome through its subsidiary, Palm, will hold a prospecting right for Chrome and

other minerals in the Western Limb of the Bushveld Igneous Complex and is viewed to have

the potential for an estimated 1.4 million ton of economically mineable Chrome ore on the

prospecting area.

As set out in Annexure 5, Palm Chrome has a net asset value of (R407 025) as at 31 August

2016. The difference between the book net asset value of Palm Chrome and the Palm

Chrome Purchase Consideration is ascribed to fair value of the prospecting right.

4.2.3 Conditions Precedent

The outstanding conditions precedent to the Palm Chrome Acquisition are:

receipt of the written consent required in terms of section 11 of the MPRDA from the

Minister in order to effect the change of control to Palm Chrome;

receipt of the written consent required in terms of section 11 of the MPRDA from the

Minister of Resources in order to effect the transfer of the shares to Chrometco;

the approval by the Company’s shareholders of the issue of shares to GSE in terms of

section 41(3) of the Companies Act;

the approval by the Company’s shareholders of the waiver of the requirement for

GSE to make a mandatory offer in terms of section 123 of the Companies Act and

regulation 86(4) of the Companies Regulations 2011;

the approval of the Palm Chrome Acquisition by Chrometco shareholders in terms of the

Listings Requirements of the JSE; and

all other regulatory approvals as may be required.

The effective date of the Palm Chrome Acquisition is the third business day after the

fulfilment of the conditions precedent set out above.

Once the Palm Chrome Acquisition has become unconditional an application to the JSE for

the listing of 200 million Chrometco shares will be made by Chrometco.

4.2.4 Warrantees

The warrantees provided by GSE and Chrometco in terms of the Palm Chrome Agreement

are standard for an agreement of this nature.

23

4.3 Specific Issue

In terms of the Share Subscription Agreement, GSE will subscribe for a total of 62.5 million

Chrometco ordinary shares for a cash consideration of R5 million at a subscription price of R0.08

per share which represents a discount to the 30 day VWAP of the Company on the date that the

cautionary announcement was released of 7.70% and a discount of 45.8% on 24 August 2016, the

date of signature of the Share Subscription Agreement. The Specific Issue Shares are of a class

already in use.

4.3.1 Conditions Precedent

The outstanding conditions precedent to the Specific Issue are:

the approval of the Specific Issue by Chrometco shareholders in General Meeting, which

approval in terms of the JSE Listings Requirements;

the approval by the Company’s shareholders of the issue of shares to GSE in terms of

section 41(3) of the Companies Act;

to the extent required, the approval by the Company’s shareholders of a waiver of the

requirement for GSE to make a mandatory offer in terms of section 123 of the Companies

Act and regulation 86(4) of the Companies Regulations 2011;

the approval of the Palm Chrome Acquisition by Chrometco shareholders;

the approval of the Black Chrome Acquisition by Chrometco shareholders; and

all other regulatory approvals as may be required.

The effective date of the Specific Issue is the third business day after all the conditions

precedent as set out above have been fulfilled or waived.

4.4 Other details

4.4.1 In November 2012, Chrometco shareholders approved the acquisition of Nkwe Platinum

SA (PTY) Limited and Realm Resources Limited of the PGMs and base metals over the

“remainder portion” of Rooderand for a total consideration of 90 million Chrometco Shares.

Phase 1 of the acquisition, which saw Chrometco acquire all of the geological data, was

completed in 2013 by way of an issue of 20 million Shares. Phase 2 was completed in

November 2015 by way of an issue of 70 million Shares at R0.11 per Share.

No other material assets have been purchased by Chrometco in the last three years,

save for the Acquisitions set out above.

4.4.2 Save for the acquisition of UWR by Black Chrome and the Prospecting Right by Palm

Chrome, no material assets have been purchased by either of Black Chrome, Palm Chrome

or Sail Minerals in the last three years.

4.4.3 The Black Chrome Shares, Palm Chrome Shares and Sail Minerals Shares will be transferred

into the name of Chrometco on the respective effective dates pertaining to each of the

Acquisitions.

4.4.4 Chrometco will amend the MOIs of Black Chrome, Palm Chrome, Sail Minerals and UWR

to the extent required to ensure that there are no provisions therein which would frustrate

Chrometco’s ability to comply with the Listings Requirements of the JSE.

4.4.5 The shares in Chrometco Mining Services will be transferred into the name of GSE on the

respective effective dates pertaining to each of the Black Chrome Acquisition.

4.4.6 Other than the Acquisitions, Chrometco has not acquired any other assets in the preceding

three years.

4.4.7 GSE acquired the shares in Black Chrome for no value on 20 July 2016, Palm Chrome for no

value on 22 August 2016 and Sail Minerals for a purchase consideration of R1 251 715 on

24 August 2016. The shares in Palm Chrome and Black Chrome were acquired for no value

as Palm Chrome and Black Chrome were shelf companies at the time of the respective

acquisitions.

4.4.8 GSE has not guaranteed the book debts of Black Chrome, Palm Chrome or Sail Minerals.

24

4.4.9 Nothing in the Agreements prevents GSE from carrying on business in competition with

Chrometco or imposes any other restrictions on GSE.

4.4.10 Neither Black Chrome nor Palm Chrome have any accrued tax liabilities. Sail Minerals

has an income tax liability as set out in Annexure 11 in the amount of R1 788 070, as at

31 August 2016.

4.4.11 Chrometco is in possession of the required rights to explore and mine its existing asset

being those rights held in Rooderand. Black Chrome and Palm Chrome will be in possession

of their respective mining and prospecting rights on receipt of written consent required

in terms of section 11 of the MPRDA from the Minister.

4.5 Voting at the General Meeting

In terms of the JSE Listings Requirements, a 50% plus one, majority of votes of all Chrometco

Shareholders present or represented by proxy at the General Meeting must be obtained in respect

of the ordinary resolution to approve the Acquisitions.

In terms of the JSE Listings Requirements, a 75% plus one, majority of votes of all Chrometco

Shareholders present or represented by proxy at the General Meeting must be obtained in respect

of the ordinary resolution to approve the Specific Issue.

5. PROSPECTS

With International Ferro Metals Limited entering business rescue and Chrometco having to write of a

large portion of the money due to it, the Company had to consider another strategy to a) get cash into the

Company and b) acquire a cash-generating asset(s), or face eventually going out of business.

The Transaction addresses and exceeds both the Companies’ objectives. Post the Transaction Chrometco

will become a beneficial owner of a world-class mine, with exceptional quality chrome ore, without having

to raise any funds for the acquisition or the start-up. In parallel Chrometco will continue to explore ways

to make Rooderand operational using the chrome or PGM mining rights. Chrometco will also assist with

the exploration on Palm Chrome to further boost the production capacity of the Group.

Chrometco will, in addition, be able to use its existing experience to manage the mining of UWR in terms

of the management agreement.

6. AUTHORITY TO ISSUE CHROMETCO SHARES

6.1 Rationale

6.1.1 The voting power of the shares to be issued in terms of the Transaction will be in excess

of 30% of the voting power of all Chrometco Shares held by Chrometco Shareholders

prior to the Transaction. Accordingly, it is necessary to obtain the authority of Chrometco

Shareholders by way of a special resolution, as required in terms of section 41(3) of the

Companies Act, in order to proceed with the issue of the Acquisition Shares and the Specific

Issue Shares in terms of the Transaction.

6.2 Voting at the General Meeting

In terms of the Companies Act, a 75% majority of votes of all Chrometco Shareholders present or

represented by proxy at the General Meeting must be obtained in respect of the special resolution

to authorise the issue of the Acquisition Shares for the Acquisition in terms of the Section 41(3) of

the Companies Act.

7. WAIVER OF MANDATORY OFFER

7.1 Rationale

7.1.1 Pursuant to the Transaction, GSE will hold in excess of 89% of the total issued share capital

of Chrometco and will, accordingly, trigger GSE to make a mandatory offer in terms of

section 123 of the Companies Act unless same is waived by way of an ordinary resolution

adopted by more than 50% of the independent Chrometco shareholders in terms of

regulation 86(4) of the Companies Regulations 2011.

25

7.1.2 The TRP has advised that it is willing to consider the application to grant an exemption from

the obligation to make the Mandatory Offer, if the majority of independent Shareholders

waive their entitlement to receive the Mandatory Offer in accordance with the provisions of

regulation 86(4) of the Companies Regulations.

7.1.3 At the date of the signing of the Agreements, there were no concert parties.

7.1.4 Any Shareholder who wishes to make representations relating to the exemption shall have

10 (ten) Business Days from the date of posting of this Circular to make such representations

to the TRP before the ruling is considered. Representation should be made in writing and

delivered by hand, posted or faxed to:

If delivered by hand, courier or post: If faxed:

The Executive Director The Executive Director

Takeover Regulation Panel Takeover Regulation Panel

1st Floor, Block 2 Freestone Park +27 86 274 9056

135 Patricia Road

Atholl

Johannesburg

2196

and should reach the TRP by no later than the close of business on 14 June 2017.

7.1.5 If any representations are made to the TRP within the permitted timeframe, the TRP will

consider the merits thereof prior to making a ruling.

7.1.6 Included in this Circular is a notice of General Meeting and the resolution for the Waiver of

the Mandatory Offer for the relevant independent Shareholders to consider and, if deemed

fit, approve at the General Meeting.

7.1.7 As required in terms of regulation 86(7) of the Companies Regulation, the Independent

Expert has been appointed to provide the Fair and Reasonable Opinion on the Waiver of

the Mandatory Offer, which opinion is set out in Annexure 19 to the Circular.

7.2 Voting at the General meeting

In terms of the Act, a 50% majority of votes of all independent holders of Chrometco Shares

present or represented by proxy at the General Meeting must be obtained in respect of the ordinary

resolutions to approve the Waiver of the Mandatory Offer.

8. FINANCIAL INFORMATION

8.1 Historical financial information of Palm Chrome

The consolidated Historical Financial Information of Palm Chrome for the financial period ended

29 February 2016 and the six-month period ended 31 August 2016 is presented in Annexure 5 and

Annexure 7 respectively, and is the responsibility of the Directors.

The independent reporting accountants’ report on historical consolidated financial information of

Palm Chrome for the year ended 29 February 2016 and the six-month period ended 31 August

2016 appears at Annexure 6 and Annexure 8 respectively.

The net asset value of the Palm Chrome Shares is (R207 583) as at 31 August 2016.

The above net assets resulted in an attributable loss of R28 222 for the six-month period ended

31 August 2016. These losses relate to costs in the acquisition of Palmietfontein.

8.2 Historical financial information of Black Chrome

The Historical Financial Information of Black Chrome for the financial period ended 29 February

2016 and the six-month period ended 31 August 2016 is presented in Annexure 1 and Annexure 3

respectively, and is the responsibility of the Directors.

The independent reporting accountants’ report on Historical Financial Information of Black Chrome

for the year ended 29 February 2016 and the six-month period ended 31 August 2016 appears at

Annexure 2 and Annexure 4 respectively.

26

The Historical Financial Information of UWR for the financial years ended 30 June 2016, 30 June

2015 and the six-month period ended 31 December 2016 is presented in Annexure 13 and


The independent reporting accountants’ report on Historical Financial Information of UWR for the

years ended 30 June 2016, 30 June 2015 and the six-month period ended 31 December 2016

appears at Annexure 14 and Annexure 16 respectively.

The net asset value of the Black Chrome Shares is (R188 080) as at 31 August 2016.

The above net assets resulted in an attributable loss of R0 for the six-month period ended

31 August 2016.

8.3 Historical financial information of Sail Minerals

The Historical Financial Information of Sail minerals for the financial years ended 28 February 2015,

29 February 2016 and the six-month period ended 31 August 2016 is presented in Annexure 9 and


The independent reporting accountants’ report on Historical Financial Information of Sail Minerals

for the years ended 28 February 2015, 29 February 2016 and the six-month period ended 31 August

2016 appears at Annexure 10 and Annexure 12 respectively.

The net asset value of the Sail Minerals Shares is R1 275 070 as at 31 August 2016.

The above net assets resulted in an attributable profit of R328 535 for the six-month period ended

31 August 2016.

8.4 Historical financial information of Chrometco

The Historical Financial Information of Chrometco for the financial years ended 28 February 2014,

28 February 2015 and 29 February 2016, as well as for the interim period 31 August 2016 is available

on the Company’s website, www.chrometco.co.za and is the responsibility of the Directors.

8.5 Pro forma financial effects on Chrometco

The pro forma financial effects of the Transaction, as set out below, is the responsibility of the

Directors of Chrometco. The pro forma financial effects are presented in a manner consistent with

the basis on which the Historical Financial Information of Chrometco has been prepared and in

terms of Chrometco’s accounting policies. The pro forma financial effects have been presented for

illustrative purposes only and, because of their nature, may not give a fair reflection of Chrometco’s

financial position, changes in equity and results of operations post the implementation of the

Transaction.

These pro forma financial effects as set out below should be read in conjunction with the pro forma

statement of financial position as set out in Annexure 17, together with the assumptions upon which

the financial effects are based, as indicated in the notes thereto in Annexure 17.

The independent reporting accountants’ report on the pro forma financial information appears at

Annexure 18 to this Circular.

27

The table below sets out the pro forma financial effects of the Transaction on Chrometco, based on

the audited financial results for the six-month period ended 31 August 2016.

Pro forma

before the

Transaction

(after

Chrometco

listing)

Pro forma

after the

Transaction

Change

(%)

Basic loss per share (cents) (4.03) (0.61) 84.8%

Diluted loss per share (cents) (4.03) (0.61) 84.8%

Headline loss per share (cents) (4.03) (0.61) 84.8%

Diluted headline loss per share (cents) (4.03) (0.61) 84.8%

Net asset value per share (cents) 71.63 13.2 (81.82%)

Net tangible asset value per share (cents) (27.78) 1.5 105.4%

Weighted average number of shares in issue 274 928 683 2 695 762 016 984%

Number of shares in issue 228 262 016 2 742 428 683 1 203%

Notes and assumptions:

For full notes on the pro forma financial effects, refer to Annexure 17.

9. GENERAL MEETING

A General Meeting of the Chrometco Shareholders has been convened and will be held at 10:00 on

Tuesday, 18 July 2017 at Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196, for the purpose

of considering, and if deemed fit, passing, with or without modification, the necessary resolutions to

give effect to the Transaction, the Waiver of the Mandatory Offer and the matters incidental thereto. The

resolutions to be put to Shareholders for their approval are set out in the notice of General Meeting of

Chrometco Shareholders annexed to this Circular.

10. DIRECTORS

10.1 Directors’ service contracts

10.1.1 Chrometco has concluded formal service contracts with the Chief Executive Officer,

P Cilliers and the Financial Director, N Waisberg, which are available for inspection in

terms of paragraph 19 below. The appointment of N Waisberg is on a full-time basis, while

P Cilliers is on a part-time basis. The contracts do not include any restraint clauses or

payments. Details of remuneration are set out in paragraph 6.4.1 of Annexure 22.

10.2 Directors’ interests

10.2.1 The Directors (and their associates), in aggregate, directly and indirectly hold approximately

18.62% of Chrometco Shares at the Last Practicable Date, as follows:

Beneficial before and after Total Total % Total %

Director Direct Indirect Shares before after

E Bramley 37 602 732 – 37 602 732 13.68% 1.37%

P Cilliers 550 000 – 550 000 0.20% 0.02%

Total 38 152 732 – 38 152 732 13.88% 1.39%

10.2.2 Save for being a Shareholder of Chrometco, no Director of Chrometco or any Director who

has resigned in the last 18 months, has or had any material beneficial interest, directly

or indirectly, in any transaction which is, or was, material to the business of Chrometco

and which was effected by Chrometco during the current financial year, or in any previous

financial year, which remains in any respect outstanding or unperformed.

10.2.3 The Director’s interests post the Transaction will not change.

28

10.2.4 Save for being a Shareholder of Chrometco, no Director of Chrometco had any material

beneficial interest, either direct or indirect, in the promotion of the Company as at the date

of signing of the Agreements.

10.2.5 Save for being a Shareholder of Chrometco, no Director of Chrometco had any material

beneficial interest, either direct or indirect, in any material assets acquired or property

acquired, or to be acquired, by Chrometco as at the date of signing of the Agreements.

10.3 Directors’ emoluments and incentives

10.3.1 Please refer to paragraph 6.4.1 of Annexure 22 for the details of directors’ emoluments and

incentives.

11. OTHER RELATED MATTERS

11.1 Material loans

11.1.1 Chrometco has entered into the Loan Facility Agreement with Sail Minerals concurrently with

the Agreements, whereby Sail Minerals will provide a standby loan facility to Chrometco on

the following terms, further details thereof are set out in Annexure 13:

11.1.1.1 facility is for a maximum amount of R10 million for the purposes of funding the

operational expenses of the Company;

11.1.1.2 bears interest at the Prime interest rate, calculated on a nominal annual

compounded monthly in arrears basis;

11.1.1.3 secured by all shares owned by Chrometco in the share capital of Rooderand;

and

11.1.1.4 no conversion rights apply.

11.1.2 No repayments are expected to be made within the 12-month period from the date of this

Circular.

11.1.3 Details of other material loans are set out in Appendix 5.

11.2 Material changes

11.2.1 There have been no material changes in the financial or trading position of Chrometco

since its results for the year ended 29 February 2016 other than the entering into of the

Agreements.

11.2.2 There have been no material changes in the financial or trading position of Black Chrome,

Palm Chrome or Sail Minerals since its results for the periods ended 29 February 2016,

save for Black Chrome entering into the agreements to acquire UWR and the acquisition

by Palm Chrome of the Prospecting Right, and Sail Minerals concluding the Management

Agreement.

11.3 Material contracts and restrictive funding arrangements

11.3.1 Other than the agreements set out in paragraph 4 above, no material contracts or restrictive

funding arrangements have been entered into by Chrometco, being a contract entered

into otherwise than in the ordinary course of business, within the two years preceding the

date of this Circular or entered into at any time and containing an obligation or settlement

that is material to Chrometco at the date of the Circular, that contains an obligation or

settlement that is material to Chrometco as at the date of this Circular. No conversion rights

or redemption rights have been granted by Chrometco to any party.

11.3.2 Other than the agreements set out in paragraph 4 above no material contracts or restrictive

funding arrangements have been entered into by Palm Chrome, Black Chrome or Sail

Minerals, being a contract entered into otherwise than in the ordinary course of business,

within the two years preceding the date of this Circular or entered into at any time and

containing an obligation or settlement that is material to Chrometco at the date of the

Circular that contains an obligation or settlement that is material to Palm Chrome, Black

Chrome or Sail Minerals as at the date of this Circular. No conversion rights or redemption

rights have been granted by Palm Chrome, Black Chrome or Sail Minerals to any party.

11.3.3 Chrometco is not subject to any royalty agreements.

29

11.4 Major shareholders

11.4.1 The table below reflects the Chrometco Shareholders who, as at the Last Practicable Date,

beneficially held, directly or indirectly, an interest of 5% or more of the Chrometco Shares

currently in issue, as well as the impact of the Transaction on these Shareholders and the

Shareholders who will, after the Transaction, hold 5% or more of the Chrometco Shares

in issue:

Shareholders Before After

Number of

Chrometco

Shares held

directly

(’000)

Percentage

holding of

Chrometco

Shares

Number of

Chrometco

Shares held

directly

(’000)

Percentage

holding of

Chrometco

Shares

Credit Suisse AG 52 000 18.91% 52 000 1.94%

Realm Resources Limited 45 000 16.37% 45 000 1.68%

NKWE Platinum SA (PTY)

Limited 45 000 11.96% 45 000 1.68%

Audax Resources (PTY)

Limited 32 878 11.96% 32 878 1.23%

ARH(ARD)-SUKUK

Investments 26 814 9.75% 26 814 1.00%

GSE – – 2 467 500 89.74%

Total 201 692 73.36% 2 669 192 97.33%

11.4.2 There has been no change in the controlling shareholder and trading objects of Chrometco

during the five years preceding the Circular, other than GSE who will be the controlling

shareholder post the conclusion of the Transaction.

11.5 Secretarial and technical fees

11.5.1 During the financial year ended 29 February 2016, Chrometco paid R284 980 to third

parties in respect of secretarial fees. Over the same period, R1 309 661 was paid in respect

of consulting fees.

11.5.2 During the financial year ended 29 February 2016, Palm Chrome paid no third parties in

respect of secretarial fees. Over the same period, nothing was paid in respect of consulting

fees.

11.5.3 During the financial year ended 29 February 2016, Black Chrome paid no third parties in

respect of secretarial fees. Over the same period, nothing was paid in respect of consulting

fees.

11.5.4 During the financial year ended 29 February 2016, Sail Minerals paid no third parties

in respect of secretarial fees. Over the same period, R2 185 629 was paid in respect of

consulting fees.

12. WORKING CAPITAL STATEMENT

The board of Chrometco is of the opinion that the working capital resources of Chrometco is sufficient for

Chrometco’s current working capital requirements and will, post-implementation of the Transaction, be

adequate for the enlarged group for a minimum period of 12 months from the date of issue of this Circular.

30

13. EXPENSES

The estimated costs of preparing and distributing this Circular, including the Revised Listing Particulars

and all other annexures, holding the General Meeting and implementing the Transaction, including the

fees payable to professional advisors, are approximately R3 581 000, excluding Value Added Taxation,

and include the following:

Expenses R’000

Transaction Advisor – PSG Capital 850

Takeover Regulation Panel 100

JSE documentation fee 100

JSE listing fee 146

Printing and postage costs – Ince 500

Reporting Accountants reports – Mazars 180

Reporting Accountants reports – Moore Stephens 250

Competent Person – IRES 140

Independent mineral valuer – Mineral Valuation Group 185

Transfer Secretaries and Strate 30

Independent Expert – BDO 200

Legal advisor – Hogan Lovells 600

Other – contingency 300

Estimated total 3 581

Notes:

1. Chrometco and GSE have incurred no preliminary expenses in relation to the Circular during the three years preceding this

Circular, save for the fees presented in the table above.

2. Other contingency costs refers to other expenses that may be necessary to be incurred for the implementation of the Transaction.

14. DIRECTORS’ RECOMMENDATION

14.1 The Directors have considered the terms and conditions of the Transaction and are of the opinion

that the terms of the Transaction are fair [and reasonable] and in the interests of Chrometco

Shareholders. In addition, the Directors have considered the Waiver of the Mandatory Offer and are

of the opinion that they are fair [and reasonable] and in the interests of Chrometco Shareholders.

14.2 The Directors entitled to vote at the General meeting recommend that Chrometco Shareholders

vote in favour of the resolutions to be proposed at the General Meeting.

15. LITIGATION STATEMENT

There are no legal or arbitration proceedings (including any such proceedings that are pending or

threatened) of which Chrometco is aware, which may have or may have had a material effect on the

financial position of Chrometco, Black Chrome, Palm Chrome or Sail Minerals during the last 12 months

preceding the date of the Circular.

There are no legal proceedings (including any such proceedings that are pending or threatened) of

which Chrometco is aware, which may have an influence on the rights to undertake any of the Group’s

rights, including those of Black Chrome and Palm Chrome.

16. ADVISORS’ CONSENTS

The parties referred to in the Corporate Information section on the inside front cover of this Circular

have consented in writing to act in the capacities stated and to their names being stated in the Circular

and, in the case of the auditors, independent reporting accountants and the independent experts, have

consented to the reference to their reports in the form and context in which they appear, and have not

withdrawn their consents prior to the publication of the Circular.

The competent person, IRES, has not directly or indirectly, or through any Director or associate thereof

within the two years preceding the Last Practicable Date has any interest in Black Chrome, Palm Chrome,

Sail Minerals or Chrometco, or any asset owned or previously owned or disposed of, or in the share

capital of Black Chrome, Palm Chrome, Sail Minerals or Chrometco.

31

17. DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors, whose names are given on the Corporate Information page of this Circular collectively and

individually accept full responsibility for the accuracy of the information furnished relating to Chrometco,

Black Chrome, Palm Chrome and Sail Minerals, and certify that to the best of their knowledge and belief,

that there are no facts which have been omitted which would make any statement false or misleading,

and that all reasonable enquiries to ascertain such facts have been made, and that this Circular contains

all information required by law and the JSE Listings Requirements.

18. DOCUMENTS AVAILABLE FOR INSPECTION

18.1 The following documents, or copies thereof, will be available for inspection by Chrometco

Shareholders during normal business hours at the registered office of Chrometco and at the offices

of PSG Capital from Tuesday, 30 May 2017 until Tuesday, 18 July 2017 (both days inclusive):

18.2 the Memorandum of Incorporation of Chrometco;

18.3 the Memorandum of Incorporation of Chrometco’s major subsidiaries, being Rooderand Chrome

Proprietary Limited and Chrometco Mining Services Proprietary Limited;

18.4 the Memorandum of Incorporation of Black Chrome;

18.5 the Memorandum of Incorporation of Palm Chrome;

18.6 the Memorandum of Incorporation of Sail Minerals Chrome;

18.7 the Agreements;

18.8 the Loan Facility Agreement;

18.9 the reporting accountants’ report on the pro forma financial information of Chrometco;

18.10 the consolidated annual financial statements of Palm Chrome for the financial year ended

29 February 2016 and the Historical Financial Information for the interim period ended

31 August 2016;

18.11 the consolidated annual financial statements of Black Chrome for the financial year ended

29 February 2016 and the Historical Financial Information for the interim period ended

31 August 2016;

18.12 the consolidated annual financial statements of Sail Minerals for the financial years ended

28 February 2015 and 29 February 2016 and the Historical Financial Information for the interim

period ended 31 August 2016;

18.13 the consolidated annual financial statements of UWR for the financial years ended 30 June

2015 and 30 June 2016 and the Historical Financial Information for the interim period ended

31 December 2016;

18.14 the reporting accountants’ report on the Historical Financial Information of Palm Chrome;

18.15 the reporting accountants’ report on the Historical Financial Information of Black Chrome;

18.16 the reporting accountants’ report on the Historical Financial Information of Sail Minerals;

18.17 the reporting accountants’ report on the Historical Financial Information of UWR;

18.18 the audited financial statements of Chrometco for the year ended 29 February 2016 and the

Historical Financial Information for the interim period ended 31 August 2016;

18.19 service contracts of P Cilliers and N Waisberg;

32

18.20 Chrometco CPR

18.21 Black Chrome CPR;

18.22 Palm Chrome technical report;

18.23 TRP approval letter;

18.24 Independent Expert opinion; and

18.25 a copy of this Circular.

SIGNED AT SANDTON ON 30 MAY 2017 BY PETRUS CILLIERS ON BEHALF OF ALL THE DIRECTORS

OF CHROMETCO LIMITED IN TERMS OF POWERS OF ATTORNEYS SIGNED BY SUCH DIRECTORS

PETRUS CILLIERS

33

ANNEXURE 1

HISTORICAL FINANCIAL INFORMATION OF BLACK CHROME FOR THE YEAR ENDED

29 FEBRUARY 2016

Historical Financial Information of Black Chrome for the years ended 29 February 2016

1. Incorporation and nature of business

2. Review of financial results and activities

3. Stated capital

4. Directorate

Directors Date of appointment Designation

5. Events after the reporting period

6. Auditors

7. Secretary

8. Going concern

9. Commentary

Statement of Financial Position as at 29 February 2016

Equity and Liabilities

(368,784) Liabilities

Total Equity and Liabilities -

Net asset value per share (3,687)

Tangible net asset value per share (3,687)

Statement of Profit or Loss and Other Comprehensive Income

Operating loss (368,784) Loss for the 13 months (368,784)

Total comprehensive loss for the 13 months (368,784)

Statement of Changes in Equity

Accumulated

loss Total equity

Total comprehensive Loss for the 13 months (368,784) (368,784) Balance at 29 February 2016 (368,784) (368,784)

Statement of Cash Flows

Cash flows from operating activities

Cash flows from financing activities

(368,784) Net cash from financing activities (368,784)

Total cash movement for the 13 months -

Total cash at end of the 13 months -

Accounting Policies

1. Presentation of financial statements

1.1 Financial instruments

Classification

Interest bearing loans and borrowings

1.2 Tax

Current tax assets and liabilities

Accounting Policies

1.2 Tax (continued)

Deferred tax assets and liabilities

Tax expenses

1.3 Share capital and equity

Notes to the Financial Statements

2. New Standards and Interpretations

2.1 Standards and interpretations not yet effective

Standard/ Interpretation: Effective date: Years beginning on or after

3. Stated capital Authorised

Issued

4. Loans from associated entities


5. Taxation

Reconciliation of the tax expense

Tax effect of adjustments on taxable income

- 6. Related parties Relationships

Related party balances Loan accounts - Owing to related parties

7. Directors' emoluments

8. Comparative figures

9. Risk management

Capital risk management


9. Risk management (continued)

Liquidity risk

At 29 February 2016 Over 1 year

Interest rate risk

Credit risk

10. Going concern


42

ANNEXURE 2

INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE HISTORICAL

FINANCIAL INFORMATION OF BLACK CHROME FOR THE YEAR ENDED

29 FEBRUARY 2016

The Directors

Chrometco Limited

71 Van Beek Avenue, Glenanda

Johannesburg

2091

22 May 2017

Dear Sirs

INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE HISTORICAL FINANCIAL INFORMATION

OF BLACK CHROME HOLDINGS PROPRIETARY LIMITED

Introduction

This Reporting Accountant’s Report on the Historical Financial Information of Black Chrome Holdings

Proprietary Limited is prepared for the purposes of complying with the Listings Requirements of the JSE

Limited and for inclusion in the Circular to be issued to shareholders of Chrometco Limited on or about

30 May 2017.

We have audited the Historical Financial Information of Black Chrome Holdings Proprietary Limited, which

comprise the statement of financial position at 29 February 2016, the statement of comprehensive income,

changes in equity and cash flows for the period then ended, and the notes thereto, which include a summary

of significant accounting policies and other explanatory notes, as set out in Annexure 1.

Directors’ Responsibility for the Historical Financial Information

The Directors of Chrometco Limited are responsible for the compilation, contents and preparation of the

Circular, in accordance with the JSE Listing Requirements.

The Directors of Black Chrome Holdings Proprietary Limited are responsible for the preparation and fair

presentation of this Historical Financial Information in accordance with International Financial Reporting

Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee

and Financial Reporting Pronouncements as issued by Financial Reporting Standards Council, the

requirements of the Companies Act 71 of 2008, the JSE Listing Requirements and for such internal control as

the Directors determine is necessary to enable financial information that is free from material misstatement,

whether due to fraud or error.

Reporting Accountant’s Responsibility

Our responsibility is to express an opinion on the Historical Financial Information based on our audit.

We conducted our audit in accordance with International Standards on Auditing. Those standards require

that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance

about whether the Historical Financial Information is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the

Historical Financial Information. The procedures selected depend on the auditor’s judgement, including the

assessment of the risks of material misstatement of the Historical Financial Information, whether due to fraud

or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s

preparation and fair presentation of the Historical Financial Information in order to design audit procedures

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness

of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies

used and the reasonableness of accounting estimates made by management, as well as evaluating the

overall presentation of the Historical Financial Information.

43

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

audit opinion.

Opinion

In our opinion, the Historical Financial Information, presents fairly, in all material respects, for the purposes of

the Circular, the financial position of Black Chrome Holdings Proprietary Limited at 29 February 2016 and its

financial performance and cash flows for the period then ended in accordance with the JSE Listings

Requirements and IFRS.

Other Information in the Circular

As required by paragraph 8.53 of the JSE Listings Requirements, we have read the Circular in which the

Historical Financial Information is contained, for the purpose of identifying whether there are material

inconsistencies between the Circular and the Historical Financial Information which has been subject to audit.

The Circular is the responsibility of the Directors. Based on reading the Circular, we have not identified

material inconsistencies between this report and the Historical Financial Information which has been subject

to audit. However, we have not audited the Circular and accordingly do not express an opinion on it.

Our Independence and Quality Control

We have complied with the independence and other ethical requirements of the Code of Professional Conduct

for Registered Auditors issued by the Independent Regulatory Board for Auditors (IRBA Code), which is

founded on fundamental principles of integrity, objectivity, professional competence and due care,

confidentiality and professional behaviour. The IRBA Code is consistent with the International Ethics Standards

Board for Accountants Code of Ethics for Professional Accountants (Part A and B).

The firm applies International Standard on Quality Control and accordingly, maintains a comprehensive

system of quality control including documented policies and procedures regarding compliance with ethical

requirements, professional standards and applicable legal and regulatory requirements.

Consent

We consent to the inclusion of this report, which will form part of the Circular, in the form and context in which

it appears.

MOORE STEPHENS CAPE TOWN Inc.

Chartered Accountants (S.A.)

Registered Auditor and Reporting Accountant Specialist

Per: Andrew Pitt

Director

2nd Floor, Block 2 Northgate Park

Corner Section Street & Koeberg Road

Paarden Eiland

7405

44

ANNEXURE 3

INTERIM FINANCIAL INFORMATION OF BLACK CHROME FOR THE SIX MONTHS

ENDED 31 AUGUST 2016

INTERIM FINANCIAL INFORMATION OF BLACK CHROME PROPRIETARY LIMITED FOR THE 6 MONTHS ENDED 31 AUGUST 2016

FINANCIAL OVERVIEW

FINANCIAL PERFORMANCE

CHANGES FOR THE BOARD

SUBSEQUENT EVENTS

GOING CONCERN

DIVIDENDS

INTERIM FINANCIAL INFORMATION OF BLACK CHROME FOR THE 6 MONTHS ENDED 31 AUGUST 2016

Statement of Financial Position as at 31 August 2016


(368,784)

Liabilities

Total Equity and Liabilities -

INTERIM FINANCIAL INFORMATION OF BLACK CHROME FOR THE 6 MONTHS ENDED 31 AUGUST 2016Statement of Changes in Equity

Balance at 01 March 2016 (368,784) (368,784)

Balance at 31 August 2016 (368,784) (368,784)

INTERIM FINANCIAL INFORMATION OF BLACK CHROME FOR THE 6 MONTHS ENDED 31 AUGUST 2016

Notes to the condensed financial statements

1. BASIS OF PREPARATION AND ACCOUNTING POLICIES

2. RELATED PARTY TRANSACTIONS

49

ANNEXURE 4

INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE INTERIM FINANCIAL

INFORMATION OF BLACK CHROME FOR THE SIX MONTHS ENDED 31 AUGUST 2016

The Directors

Chrometco Limited


Johannesburg

2091

22 May 2017

Dear Sirs

INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE INTERIM FINANCIAL INFORMATION

OF BLACK CHROME HOLDINGS PROPRIETARY LIMITED

We have reviewed the Interim Financial Information of Black Chrome Holdings Proprietary Limited, as set out

in Annexure 3 of the Circular, which comprise the statement of financial position as at 31 August 2016, and

the statement of changes in equity for the six-month period ended 31 August 2016, and selected explanatory

notes (the “Interim Financial Information”).

Directors’ Responsibility for the Interim Financial Information



The Directors of Black Chrome Holdings Proprietary Limited are responsible for the preparation and fair

presentation of this Interim Financial Information in accordance with International Financial Reporting






Reporting Accountants’ Responsibility

Our responsibility is to express a conclusion on the Interim Financial Information based on our review.

Scope of Review

We conducted our review in accordance with International Standards on Review Engagements ISRE 2400,

“Review of Financial Statements”. This Standard requires that we plan and perform the review to obtain

moderate assurance as to whether the financial information is free of material misstatement. A review of

financial information consists of making inquiries, primarily of persons responsible for financial and accounting

matters, and applying analytical and other review procedures. A review is substantially less in scope than an

audit conducted in accordance with International Standards on Auditing and consequently does not enable

us to obtain assurance that we would become aware of all significant matters that might be identified in an

audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the Interim Financial

Information is not fairly presented in all material respects in accordance with International Financial Reporting

Standards, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and

Financial Reporting Pronouncements as issued by Financial Reporting Standards Council, the requirements

of the Companies Act 71 of 2008 and the JSE Listings Requirements.

50










Consent


it appears.




Per: Andrew Pitt

Director



Paarden Eiland

7405

51

ANNEXURE 5

HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF PALM CHROME FOR

THE YEAR ENDED 29 FEBRUARY 2016

Historical Consolidated Financial Information of Palm Chrome for the period

ended 29 February 2016



3. Share capital

4. Directorate



6. Auditors

7. Secretary

8. Going concern

9. Commentary


Assets

3 Total assets 2,200,000 Equity and Liabilities

(351,688) Liabilities

Total Equity and Liabilities 2,200,000


Operating loss (351,688) Loss for the 13 months (351,688)

Total comprehensive loss for the 13 months (351,688)


Total comprehensive Loss for the 13 months (351,688) (351,688) Balance at 29 February 2016 (351,688) (351,688)



Cash flows from investing activities

(2,200,000) 2,551,688

Net cash from investing activities 351,688

Total cash movement for the 13 months -

Total cash at end of the 13 months -

Accounting Policies 1. Presentation of financial statements

1.1 Intangible assets

Item Useful life


Classification

Palm Chrome Holdings Proprietary Limited and its subsidiary

Accounting Policies

1.2 Financial instruments (continued)


1.3 Tax



Tax expenses




3. Intangible assets

Cost / Accumulated Carrying value Valuation amortisation

Reconciliation of intangible assets - 2016 Opening Additions Total balance

Details of prospecting right application

4. Stated capital Authorised

Issued

5. Loans from group companies

Associated Entities

6. Taxation



-



7. Related parties Relationships

Related party balances Loan accounts - Owing to related parties


9. Comparative figures

10. Risk management


Liquidity risk

At 29 February 2016 Over 1 year

Interest rate risk




Credit risk

11. Going concern

61

ANNEXURE 6

INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE HISTORICAL

CONSOLIDATED FINANCIAL INFORMATION OF PALM CHROME FOR THE YEAR

ENDED 29 FEBRUARY 2016

The Directors

Chrometco Limited


Johannesburg

2091

22 May 2017

Dear Sirs

INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE HISTORICAL CONSOLIDATED

FINANCIAL INFORMATION OF PALM CHROME HOLDINGS PROPRIETARY LIMITED

Introduction

This Reporting Accountant’s Report on the Historical Consolidated Financial Information of Palm Chrome

Holdings Proprietary Limited is prepared for the purposes of complying with the Listings Requirements of the

JSE Limited and for inclusion in the Circular to be issued to shareholders of Chrometco Limited on or about

30 May 2017.

We have audited the Historical Consolidated Financial Information of Palm Chrome Holdings Proprietary

Limited, which comprise the consolidated statement of financial position at 29 February 2016, the consolidated

statements of comprehensive income, changes in equity and cash flows for the period then ended, and the

notes thereto, which include a summary of significant accounting policies and other explanatory notes, as set

out in Annexure 5.

Directors’ Responsibility for the Historical Consolidated Financial Information



The Directors of Palm Chrome Holdings Proprietary Limited are responsible for the preparation and fair

presentation of this Historical Consolidated Financial Information in accordance with International Financial

Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices

Committee and Financial Reporting Pronouncements as issued by Financial Reporting Standards Council,

the requirements of the Companies Act 71 of 2008, the JSE Listing Requirements and for such internal control

as the Directors determine is necessary to enable financial information that is free from material misstatement,



Our responsibility is to express an opinion on the Historical Consolidated Financial Information based on our

audit.



about whether the Historical Consolidated Financial Information is free from material misstatement.



assessment of the risks of material misstatement of the Historical Consolidated Financial Information, whether

due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the

entity’s preparation and fair presentation of the Historical Consolidated Financial Information in order to design

audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion

on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of

62

accounting policies used and the reasonableness of accounting estimates made by management, as well as

evaluating the overall presentation of the Historical Consolidated Financial Information.


audit opinion.

Opinion

In our opinion, the Historical Consolidated Financial Information, presents fairly, in all material respects, for the

purposes of the Circular, the financial position of Palm Chrome Holdings Proprietary Limited and its subsidiary

at 29 February 2016 and its financial performance and cash flows for the period then ended in accordance

with the JSE Listings Requirements and IFRS.

Other Information in the Circular Statement


Historical Consolidated Financial Information is contained, for the purpose of identifying whether there are

material inconsistencies between the Circular and the Historical Consolidated Financial Information which

has been subject to audit. The Circular is the responsibility of the Directors. Based on reading the Circular, we

have not identified material inconsistencies between this report and the Historical Consolidated Financial

Information which has been subject to audit. However, we have not audited the Circular and accordingly do

not express an opinion on it.










Consent


it appears.




Per: Andrew Pitt

Director



Paarden Eiland

7405

63

ANNEXURE 7

INTERIM CONSOLIDATED FINANCIAL INFORMATION OF PALM CHROME FOR THE

SIX MONTHS ENDED 31 AUGUST 2016

INTERIM CONSOLIDATED FINANCIAL INFORMATION OF PALM CHROME FOR THE 6 MONTHS ENDED 31 AUGUST 2016

FINANCIAL OVERVIEW

GROUP FINANCIAL PERFORMANCE

SUBSEQUENT EVENTS

GOING CONCERN

CHANGES TO THE BOARD

DIVIDENDS

INTERIM CONSOLIDATED FINANCIAL INFORMATION OF PALM CHROME FOR THE 6 MONTHS ENDED 31 AUGUST 2016 Statement of Financial Position as at 31 August 2016

Assets

Total Assets 2,200,000 Equity and Liabilities

Equity

Liabilities

Total Equity and Liabilities 2,200,000

INTERIM CONSOLIDATED FINANCIAL INFORMATION OF PALM CHROME FOR THE 6 MONTHS ENDED 31 AUGUST 2016 Statement of Comprehensive Income

Operating loss (55,337)

Loss for the period (55,337)

Total comprehensive loss for the period (55,337) Earnings per share Per share information

33

INTERIM CONSOLIDATED FINANCIAL INFORMATION OF PALM CHROME FOR THE 6 MONTHS ENDED 31 AUGUST 2016 Statement of Changes in Equity

Balance at 01 March 2016 (351,688) (351,688)

Total comprehensive loss for the period (55,337) (55,337) Balance at 31 August 2016 (407,025) (407,025)

INTERIM CONSOLIDATED FINANCIAL INFORMATION OF PALM CHROME FOR THE 6 MONTHS ENDED 31 AUGUST 2016 Statement of Cash Flows



Net cash from investing activities 55,337 Total cash movement for the period -

Total cash at end of the period -

INTERIM CONSOLIDATED FINANCIAL INFORMATION OF PALM CHROME FOR THE 6 MONTHS ENDED 31 AUGUST 2016Notes to the condensed consolidated financial statements



3. EARNINGS PER SHARE

Earnings attributable to ordinary shareholders (553)Headline earnings attributable to ordinary shareholders (553)Actual number of shares in issue at the end of the period 100

70

ANNEXURE 8

INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE INTERIM

CONSOLIDATED FINANCIAL RESULTS OF PALM CHROME FOR THE SIX MONTHS


The Directors

Chrometco Limited


Johannesburg

2091

22 May 2017

Dear Sirs

INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE INTERIM CONSOLIDATED FINANCIAL

INFORMATION OF PALM CHROME HOLDINGS PROPRIETARY LIMITED

We have reviewed the Interim Consolidated Financial Information of Palm Chrome Holdings Proprietary

Limited, as set out in Annexure 7 of the Circular, which comprise the consolidated statement of financial

position as at 31 August 2016, the consolidated statement of comprehensive income, statement of changes

in equity and statement of cash flows for the six-month period ended 31 August 2016, and selected explanitory

notes (the “Interim Financial Information”).




The Directors of Palm Chrome Holdings Proprietary Limited are responsible for the preparation and fair









Scope of Review









Conclusion






71










Consent


it appears.




Per: Andrew Pitt

Director



Paarden Eiland

7405

72

ANNEXURE 9

HISTORICAL FINANCIAL INFORMATION OF SAIL MINERALS FOR THE YEARS ENDED

28 FEBRUARY 2015 AND 29 FEBRUARY 2016

Historical financial information of Sail Minerals for the years ended 28 February 2015 and 29 February 2016



3. Stated capital

4. Dividends

5. Directorate

Director Appointment date

6. Property, plant and equipment


8. Going concern

9. Auditors

10. Secretary


Assets

3,484,224 3,394,346

99,985,441 70,493,279Total Assets 103,469,665 73,887,625


Equity

Liabilities

99,669,592 71,745,897Total Liabilities 99,683,527 71,745,897Total Equity and Liabilities 103,469,665 73,887,625

Net asset value per share 37,861 21,417

Tangible net asset value per share 37,861 21,417

Sail Minerals Proprietary Limited


Gross profit 50,958,243 15,762,406

Operating profit 6,174,890 2,992,528

Profit before taxation 2,974,372 3,133,288

Profit for the year 1,644,410 2,141,728

Total comprehensive income for the year 1,644,410 2,141,728



Total comprehensive income for the year 2,141,728 2,141,728

Balance at 01 March 2015 2,141,728 2,141,728

Total comprehensive income for the year 1,644,410 1,644,410Balance at 29 February 2016 3,786,138 3,786,138




Net cash from operating activities 9,839,836 4,406,929


Net cash from investing activities (15,752,741) (5,480,560)


Net cash from financing activities 14,884,868 27,570,238

Total cash movement for the year 8,971,963 26,496,607

Total cash at end of the year 35,468,570 26,496,607


Accounting Policies

1. Presentation of financial statements

1.1 Significant judgements and sources of estimation uncertainty

Inventories

Taxation

1.2 Property, plant and equipment

Item Depreciation method Average useful life


Accounting Policies


Classification

Trade and other receivables

Trade and other payables

Cash and cash equivalents


Accounting Policies

1.4 Tax



Tax expenses

1.5 Leases

Operating leases - lessee

1.6 Inventories


Accounting Policies

1.7 Impairment of assets

1.8 Stated capital and equity

1.9 Employee benefits

Short-term employee benefits

1.10 Revenue

1.11 Borrowing costs


Accounting Policies

1.12 Translation of foreign currencies

Foreign currency transactions





Standard/ Interpretation: Effective date:Years beginning on or after




Cost Accumulated Carrying value Cost Accumulated Carrying valuedepreciation depreciation

Total 5,097,630 (1,613,406) 3,484,224 4,044,253 (708,562) 3,335,691

Reconciliation of property, plant and equipment - 2016

Opening Additions Disposals Depreciation Totalbalance

3,335,691 1,330,459 (277,083) (904,843) 3,484,224


Opening Additions Depreciation Totalbalance

- 4,044,253 (708,562) 3,335,691



4. Deferred tax

Deferred tax asset

Reconciliation of deferred tax asset

(13,935) 58,655

5. Inventories

6. Trade and other receivables

37,982,368 28,266,672

Trade and other receivables which would have been past due or impaired, but which have been renegotiated are as follows:

Trade and other receivables past due but not impaired

7. Other financial assets

At amortised cost

16,218,198 1,430,166

Current assets



8. Cash and cash equivalents

35,468,570 26,496,607

Credit quality of cash at bank and short term deposits, excluding cash on hand

Credit rating

35,468,570 26,496,606

9. Share capital

Authorised

Issued

10. Trade and other payables

56,384,626 43,125,444

Fair value of trade and other payables



11. Other financial liabilities

Held at amortised cost

42,455,106 27,570,238

Current liabilities

12. Revenue

13. Other income

2,973,255 1,436,545

14. Investment revenue

Interest revenue

332,816 140,760

15. Finance costs

3,533,334 -



16. Taxation

Major components of the tax expense

Current

Deferred

1,329,962 991,560



1,329,962 991,560

17. Cash generated from operations

Adjustments for:

Changes in working capital:

14,518,081 4,266,169

18. First-time adoption of International Financial Reporting Standards



19. Related parties

Relationships

Related party balances

Loan accounts - Owing (to) by related parties

Related party transactions

Purchases from (sales to) related parties

Rent paid to related parties


Executive

2016

Emoluments Total

2015

Emoluments Total



21. Risk management


Financial risk management

Liquidity risk

At 29 February 2016 Less than 1year

At 28 February 2015 Less than 1year

Interest rate risk




Credit risk

Financial instrument 2016 2015

Foreign exchange risk

Foreign currency exposure at the end of the reporting period

Current assets

Liabilities

Exchange rates used for conversion of foreign items were:

22. Going concern


93

ANNEXURE 10

INDEPENDENT REPORTING ACCOUNTANT’S REPORTS ON THE HISTORICAL

FINANCIAL INFORMATION OF SAIL MINERALS FOR THE YEARS ENDED

28 FEBRUARY 2015 AND 29 FEBRUARY 2016

The Directors

Chrometco Limited


Johannesburg

2091

22 May 2017

Dear Sirs


OF SAIL MINERALS PROPRIETARY LIMITED

Introduction

This Reporting Accountant’s Report on the Historical Financial Information of Sail Minerals Proprietary Limited

is prepared for the purposes of complying with the Listings Requirements of the JSE Limited and for inclusion

in the Circular to be issued to shareholders of Chrometco Limited on or about 30 May 2017.

We have audited the Historical Financial Information of Sail Minerals Proprietary Limited, which comprise the

statements of financial position as at 28 February 2015 and 29 February 2016, the statements of comprehensive

income, changes in equity and cash flows for the years then ended, and the notes thereto, which include

a summary of significant accounting policies and other explanatory notes, as set out in Annexure 9.




The Directors of Sail Minerals Proprietary Limited are responsible for the preparation and fair presentation of

this Historical Financial Information in accordance with International Financial Reporting Standards (IFRS),

the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial

Reporting Pronouncements as issued by Financial Reporting Standards Council, the requirements of the

Companies Act 71 of 2008, the JSE Listing Requirements and for such internal control as the Directors

determine is necessary to enable financial information that is free from material misstatement, whether due

to fraud or error.















94


audit opinion.

Opinion


the Circular, the financial position of Sail Minerals Proprietary Limited as at 28 February 2015 and 29 February

2016 and its financial performance and cash flows for the period then ended in accordance with the JSE

Listings Requirements and IFRS.

Other Information in the Circular


Historical Financial Information is contained, for the purpose of identifying whether there are material

inconsistencies between the Circular and the Historical Financial Information which has been subject to audit.

The Circular is the responsibility of the Directors. Based on reading the Circular, we have not identified

material inconsistencies between this report and the Historical Financial Information which has been subject

to audit. However, we have not audited the Circular and accordingly do not express an opinion on it.

Our independence and quality control









Consent


it appears.




Per: Andrew Pitt

Director



Paarden Eiland

7405

95

ANNEXURE 11

INTERIM FINANCIAL INFORMATION OF SAIL MINERALS FOR THE SIX MONTHS


INTERIM FINANCIAL INFORMATION OF SAIL MINERALS FOR THE 6 MONTHS ENDED 31 AUGUST 2016

FINANCIAL OVERVIEW

FINANCIAL PERFORMANCE

SUBSEQUENT EVENTS

GOING CONCERN


DIVIDENDS

INTERIM FINANCIAL INFORMATION OF SAIL MINERALS FOR THE 6 MONTHS ENDED 31 AUGUST 2016 Statement of Financial Position as at 31 August 2016

Assets

Non-Current Assets

Current Assets

163,272,961 Total Assets 166,336,144 Equity and Liabilities

Equity

Liabilities

Current Liabilities

161,235,864 Total Equity and Liabilities 166,336,144

INTERIM FINANCIAL INFORMATION OF SAIL MINERALS FOR THE 6 MONTHS ENDED 31 AUGUST 2016 Statement of Profit or Loss and Other Comprehensive Income

Gross profit 14,478,881

Operating profit 2,837,016

Profit before taxation 2,783,524

Profit for the period 1,314,141

Total comprehensive income for the period 1,314,141

INTERIM FINANCIAL INFORMATION OF SAIL MINERALS FOR THE 6 MONTHS ENDED 31 AUGUST 2016 Statement of Changes in Equity

Balance at 01 March 2015 2,141,729 2,141,729

Total comprehensive income for the period 1,644,410 1,644,410

Balance at 01 March 2016 3,786,139 3,786,139

Total comprehensive income for the period 1,314,141 1,314,141 Balance at 31 August 2016 5,100,280 5,100,280

INTERIM FINANCIAL INFORMATION OF SAIL MINERALS FOR THE 6 MONTHS ENDED 31 AUGUST 2016 Statement of Cash Flows


Net cash from operating activities (7,517,218) Cash flows from investing activities

Net cash from investing activities (10,273,341) Cash flows from financing activities

Net cash from financing activities 42,821,464

Total cash movement for the period 25,030,905

Total cash at end of the period 60,499,475

INTERIM FINANCIAL INFORMATION OF SAIL MINERALS FOR THE INTERIM PERIOD ENDED 31 AUGUST 2016 Notes to the condensed consolidated financial statements




-Earnings attributable to ordinary shareholdersHeadline earnings attributable to ordinary shareholdersActual number of shares in issue at the end of the period

102

ANNEXURE 12


INFORMATION OF SAIL MINERALS FOR THE SIX MONTHS ENDED 31 AUGUST 2016

The Directors

Chrometco Limited


Johannesburg

2091

22 May 2017

Dear Sirs


OF SAIL MINERALS PROPRIETARY LIMITED

We have reviewed the Interim Financial Information of Sail Minerals Proprietary Limited, as set out in

Annexure 11 of the Circular, which comprise the statement of financial position as at 31 August 2016, the

statement of comprehensive income, statement of changes in equity and statement of cash flows for the six-

month period ended 31 August 2016, and selected explanitory notes (the “Interim Financial Information”).




The Directors of Sail Minerals Proprietary Limited are responsible for the preparation and fair presentation of

this Interim Financial Information in accordance with International Financial Reporting Standards (IFRS), the

SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting

Pronouncements as issued by the Financial Reporting Standards Council, the requirements of the Companies

Act 71 of 2008, the JSE Listing Requirements and for such internal control as the Directors determine is

necessary to enable financial information that is free from material misstatement, whether due to fraud or

error.



Scope of Review


“Review of Financial Statements’. This Standard requires that we plan and perform the review to obtain







Conclusion






103










Consent


it appears.




Per: Andrew Pitt

Director



Paarden Eiland

7405

104

ANNEXURE 13

HISTORICAL FINANCIAL INFORMATION OF UWR FOR THE YEARS ENDED 30 JUNE

2015 AND 30 JUNE 2016

Historical financial information for Umnotho weSizwe Resources for the years ended 30 June 2015 and 30 June 2016


2. Continuation of business rescue proceedings

3. General review of operations


5. Dividends

6. Share capital

7. Directorate


8. Borrowings


10. Going concern

11. Auditors

12. Secretary

Umnotho weSizwe Resources (Pty) Ltd

Statement of Financial Position as at 30 June 2016

Assets

Non-Current Assets

289,225,485 300,798,905

Current Assets

6,989,542 11,867,179 Total Assets 296,215,027 312,666,084


Equity

(86,562,233) (72,703,353)

Liabilities

Non-Current Liabilities

379,362,871 382,040,370

Current Liabilities

3,414,389 3,329,067 Total Liabilities 382,777,260 385,369,437 Total Equity and Liabilities 296,215,027 312,666,084

Net asset value per share (43,282) (36,351) Tangible net asset value per share (43,282) (36,351)



Gross loss (15,441,215) (18,674,254)

Operating loss (17,253,391) (29,052,892)

Loss before taxation (17,165,725) (38,034,531)

Loss for the year (13,858,880) (27,063,016)

Total comprehensive loss for the year (13,858,880) (27,063,016)



Balance at 01 July 2014 1,000 (45,641,337) (45,640,337)

Total comprehensive Loss for the year - (27,063,016) (27,063,016)

Balance at 01 July 2015 1,000 (72,704,353) (72,703,353)

Total comprehensive Loss for the year - (13,858,880) (13,858,880)Balance at 30 June 2016 1,000 (86,563,233) (86,562,233)




Net cash from operating activities 3,477,280 (23,203,868)



Net cash from financing activities (3,324,426) 21,397,819

Total cash movement for the year 152,854 (2,835,033)

Total cash at end of the year 2,207,896 2,055,042

Accounting Policies

1. Presentation of Annual Financial Statements

1.1 Significant judgements and sources of estimation uncertainty

Mineral reserve estimates

Accounting Policies

1.1 Significant judgements and sources of estimation uncertainty (continued)

Cash flow projections

Restoration, rehabilitation and environmental costs

Inventories

Accounting Policies

1.2 Property, plant and equipment

Mine development and infrastructure

Other assets

Rehabilitation asset

Amortisation and depreciation of mine development and infrastructure


Accounting Policies

1.2 Property, plant and equipment (continued) Depreciation of other assets and the rehabilitation asset

Item Depreciation method Average useful life

Impairment

Gain or loss on disposal of property, plant and equipment


Classification

Trade and other receivables

Trade and other payables

Accounting Policies

1.3 Financial instruments (continued) Cash and cash equivalents


1.4 Tax



Tax expenses

Accounting Policies

1.5 Leases

Finance leases - lessee

Operating leases - lessee

1.6 Inventories


Accounting Policies

1.8 Provisions and contingencies

Provision for environmental rehabilitation costs

Other provisions

.

Accounting Policies

1.9 Employee benefits

Short-term employee benefits

1.10 Revenue

1.11 Investment income

1.12 Borrowing costs


Notes to the Annual Financial Statements







Total 321,586,774 (62,090,075) 259,496,699 326,206,788 (51,829,824) 274,376,964


274,376,964 (12,068,729) (2,811,536) 259,496,699


285,637,606 1,028,982 (12,289,624) 274,376,964

Property, plant and equipment encumbered as security

4. Deferred tax

Reconciliation of deferred tax asset / (liability)

29,728,786 26,421,941



5. Inventories

4,771,646 9,758,404

6. Trade and other receivables

10,000 53,733

Trade and other receivables past due but not impaired

7. Cash and cash equivalents

Credit quality of cash at bank and short term deposits, excluding cash on hand

Credit rating

2,207,896 2,055,042

Cash and cash equivalents pledged as collateral



8. Stated capital

Authorised

- -

Reconciliation of number of shares issued:

Issued stated capital

9. Loans from shareholders



10. Other financial liabilities

Held at amortised cost

309,251,878 307,378,921

Non-current liabilities

11. Provisions

Reconciliation of provisions - 2016

Reconciliation of provisions - 2015

12. Trade and other payables

3,414,389 2,860,226



12. Trade and other payables (continued)

Fair value of trade and other payables

13. Finance lease obligation

Minimum lease payments due

14. Operating loss

Operating lease charges

15. Finance costs

10,575 9,073,180



16. Taxation

Major components of the tax income

Deferred



(3,306,845) (10,971,515)

17. Cash (used in) generated from operations

Adjustments for:

Changes in working capital:

3,389,614 (14,222,229)

18. Commitments

Operating leases - as lessee (expense)

Minimum lease payments due

1,517,191 2,960,101



19. Related parties

Related party balances

Loan accounts - Owing (to) by related parties

Shareholder loans

Related party transactions

Interest paid to (waiver from) related parties

Business Rescue Practitioner fees


21. Risk management


Financial risk management




Liquidity risk

At 30 June 2016 Less than 1 Over 1 year year

At 30 June 2015 Less than 1 Over 1 year year

Interest rate risk




Credit risk

Financial instrument 2016 2015

22. Going concern




23. Events after the reporting period (continued)

131

ANNEXURE 14

INDEPENDENT REPORTING ACCOUNTANT’S REPORTS ON THE HISTORICAL

FINANCIAL INFORMATION OF UWR FOR THE YEARS ENDED 30 JUNE 2015 AND

30 JUNE 2016

The Directors

Chrometco Limited


Johannesburg

2091

22 May 2017

Dear Sirs


OF UMNOTHO WESIZWE RESOURCES PROPRIETARY LIMITED

Introduction

This Reporting Accountant’s Report on the Historical Financial Information of Umnotho weSizwe Resources

Proprietary Limited is prepared for the purposes of complying with the Listings Requirements of the JSE

Limited and for inclusion in the Circular statement to be issued to shareholders of Chrometco Limited on or

about 30 May 2017.

We have audited the Historical Financial Information of Umnotho weSizwe Resources Proprietary Limited,

which comprise the statements of financial position at 30 June 2015 and 30 June 2016, the statements of

comprehensive income, changes in equity and cash flows for the years then ended, and the notes thereto,

which include a summary of significant accounting policies and other explanatory notes, as set out in

Annexure 13.




The Directors of Umnotho weSizwe Resources Proprietary Limited are responsible for the preparation and fair

presentation of this Historical Financial Information in accordance with International Financial Reporting




















132


audit opinion.

Opinion


the Circular statement, the financial position of Umnotho weSizwe Resources Proprietary Limited at 30 June

2015 and 30 June 2016 and its financial performance and cash flows for the periods then ended in accordance

with the JSE Listings Requirements and IFRS.

Emphasis of matter

Without qualifying our opinion, we draw attention to the going concern note 27 to the Historical Financial

Information of Umnotho weSizwe Resources Proprietary Limited which states that the business was placed

under business rescue on 1 February 2013 due to the business being technically insolvent. The business is

currently under the care of a business rescue practitioner. Limited trading resulting from the cessation of the

mining operations has resulted in recurring losses and cash outflows from operations during the period under

review. The business rescue practitioner has concluded a management agreement with a contractor to

operate the mine, with effect from 1 October 2016 and at the contractor’s own cost. This management

agreement will terminate upon the full implementation of the series of transactions referred to in note 23 of

these financial statements, one of which conditions include the Ministerial consent in terms of section 11(1)

of the Mineral and Petroleum Resources Development Act of 2002. These conditions, along with other matters

indicate the existence of a material uncertainty which may cast doubt on the company’s ability to continue as

a going concern.

Other Information in The Circular Statement

As required by paragraph 8.53 of the JSE Listings Requirements, we have read the Circular statement in

which the Historical Financial Information is contained, for the purpose of identifying whether there are material

inconsistencies between the Circular statement and the Historical Financial Information which has been

subject to audit. The Circular statement is the responsibility of the Directors. Based on reading the Circular

statement, we have not identified material inconsistencies between this report and the Historical Financial

Information which has been subject to audit. However, we have not audited the Circular statement and

accordingly do not express an opinion on it.

Our independence and quality control









Consent

We consent to the inclusion of this report, which will form part of the Circular statement, in the form and

context in which it appears.




Per: Andrew Pitt

Director



Paarden Eiland

7405

133

ANNEXURE 15

INTERIM FINANCIAL INFORMATION OF UWR FOR THE SIX MONTHS

ENDED 2016

INTERIM FINANCIAL INFORMATION OF UMNOTHO WESIZWE RESOURCES PROPRIETARY LIMITED FOR THE 6 MONTHS ENDED 31 DECEMBER 2016

FINANCIAL OVERVIEW

GROUP FINANCIAL PERFORMANCE

CONTINUATION OF BUSINESS RESCUE PROCEEDINGS

GOING CONCERN


DIVIDENDS

INTERIM FINANCIAL INFORMATION OF UMNOTHO WESIZWE RESOURCES PROPRIETARY LIMITED FOR THE 6 MONTHS ENDED 31 DECEMBER 2016 Statement of Financial Position as at 31 December 2016

Assets

286,495,657

6,848,443 Total Assets 293,344,100 Equity and Liabilities

Equity

(95,815,253) Liabilities

385,565,068

Total Liabilities 389,159,353 Total Equity and Liabilities 293,344,100

INTERIM FINANCIAL INFORMATION OF UMNOTHO WESIZWE RESOURCES PROPRIETARY LIMITED FOR THE 6 MONTHS ENDED 31 DECEMBER 2016 Statement of Profit or Loss and Other Comprehensive Income

Operating loss (12,749,048)

Loss before taxation (12,695,130)

Loss for the period (9,253,020)

Total comprehensive loss for the period (9,253,020) Earnings per share Per share information

33

INTERIM FINANCIAL INFORMATION OF UMNOTHO WESIZWE RESOURCES PROPRIETARY LIMITED FOR THE 6 MONTHS ENDED 31 DECEMBER 2016 Statement of Changes in Equity

Balance at 01 July 2016

Total comprehensive Loss for the period Balance at 31 December 2016

1,000 (86,563,233) (86,562,233)

- (9,253,020) (9,253,020) 1,000 (95,816,253) (95,815,253)

INTERIM FINANCIAL INFORMATION OF UMNOTHO WESIZWE RESOURCES PROPRIETARY LIMITED FOR THE 6 MONTHS ENDED 31 DECEMBER 2016 Statement of Cash Flows


Net cash from operating activities (6,677,438) Cash flows from financing activities

Net cash from financing activities 6,107,812

Total cash movement for the period (569,626)

Total cash at end of the period 1,638,270

INTERIM FINANCIAL INFORMATION OF UMNOTHO WESIZWE RESOURCES PROPRIETARY LIMITED FOR THE 6 MONTHS ENDED 31 DECEMBER 2016 Notes to the Financial Statements 1. BASIS OF PREPARATION AND ACCOUNTING POLICIES



-Earnings attributable to ordinary shareholdersHeadline earnings attributable to ordinary shareholdersActual number of shares in issue at the end of the period

140

ANNEXURE 16


INFORMATION OF UWR FOR THE SIX MONTHS ENDED 31 DECEMBER 2016

The Directors

Chrometco Limited


Johannesburg

2091

22 May 2017

Dear Sirs


OF UMNOTHO WESIZWE RESOURCES PROPRIETARY LIMITED

We have reviewed the Interim Financial Information of Umnotho weSizwe Resources Proprietary Limited, as

set out in Annexure 15 of the Circular, which comprise the statement of financial position as at 31 December

2016, the statement of comprehensive income, statement of changes in equity and statement of cash flows

for the six-month period ended 31 December 2016, and selected notes (the “Interim Financial Information”).




The Directors of Umnotho weSizwe Resources Proprietary Limited are responsible for the preparation and fair









Scope of Review









Conclusion






141










Consent


it appears.




Per: Andrew Pitt

Director



Paarden Eiland

7405

142

ANNEXURE 17

PRO FORMA FINANCIAL INFORMATION OF CHROMETCO

The definitions and interpretations commencing on page 8 of the Circular statement apply throughout this

Annexure 17. The pro forma statement of financial position at 31 August 2016 and statement of comprehensive

income for the period ended 31 August 2016 are set out below. The pro forma statement of financial position

and statement of comprehensive income have been prepared for illustrative purposes only to provide

information on how the Transaction might have impacted on the financial position and results of Chrometco.

It has been assumed for purposes of the pro forma financial effects that the Transaction was implemented

with effect from 1 March 2016 and 31 August 2016 for statement of comprehensive income and financial

position purposes respectively. The pro forma financial information has been presented in a manner consistent

with both the format and accounting policies adopted by the issuer in its report of Historical Financial

Information. The pro forma financial information has been prepared in accordance with the Listing Requirements

and in compliance with the revised SAICA Guide on pro forma financial information. The acquisition of UWR

has been accounted for as a Reverse Acquisition in terms of IFRS 3: Business Combinations as there is a

change in control of Chrometco.

Because of their nature, the pro forma statement of financial position and statement of comprehensive income

may not be a fair reflection of Chrometco’s financial position after the Transaction or of its future earnings, cash

flow or changes in equity. The pro forma statement of financial position and statement of comprehensive

income as set out below should be read in conjunction with the report of the Independent Reporting

Accountants which is included as Annexure 18 to this Circular. The Directors are responsible for the preparation

of the pro forma statement of financial position and statement of comprehensive income.

143

Pro

fo

rma

sta

tem

en

t o

f fi

nan

cia

l p

osit

ion

Bef

ore

Tran

sact

ion

31 A

ugus

t 201

61

R’s

Sai

l

Min

eral

s

loan

2

R’s

Spe

cific

Issu

e3

R’s

Inve

stm

ent i

n

Sai

l Min

eral

s4

R’s

Bla

ck C

hrom

e

befo

re U

WR

acq

uisi

tion5

R’s

Bla

ck C

hrom

e

acq

uisi

tion

of

UW

R6

R’s

Rec

apita

lisat

ion

of U

WR

7

R’s

Acq

uisi

tion

adju

stm

ents

:

Bla

ck C

hrom

e

acq

uisi

tion

of

UW

R8

R’s

Inve

stm

ent b

y

Chr

omet

co in

Bla

ck C

hrom

e9

R’s

Adj

ustm

ents

rela

ting

to

reve

rse

acq

uisi

tion10

R’s

Chr

omet

co

acqu

isiti

on o

f

Bla

ck C

hrom

e

R’s

Pal

m

Chr

ome11

R’s

Inve

stm

ent b

y

Chr

omet

co in

Pal

m C

hrom

e12

R’s

Acq

uisi

tion

adj

ustm

ents

13

R’s

Acq

uisi

tion

of

Pal

m C

hrom

e

R’s

Afte

r

Tran

sact

ion14

R’s

ASS

ETS

Non

-cur

rent

ass

ets

278

023

899

–

66

800

000

286

495

657

–

18

943

078

109

600

000

(1

28 5

43 0

78)

631

319

556

2

200

000

1

6 00

0 00

0 3

0 42

0 77

0 4

8 62

0 77

0 6

79 9

40 3

26

Tang

ible

ass

ets

1 6

24 8

70

253

324

762

2

54 9

49 6

32

254

949

632

Inta

ngib

le a

sset

s 2

73 3

21 4

22

18

943

078

(18

943

078)

273

321

422

2

200

000

4

6 42

0 77

0 4

8 62

0 77

0 3

21 9

42 1

92

Envi

ronm

enta

l reh

abili

tatio

n

oblig

atio

n in

vest

men

ts 3

077

607

3

077

607

3

077

607

Def

erre

d ta

x 3

3 17

0 89

5 3

3 17

0 89

5 3

3 17

0 89

5

Inve

stm

ent i

n su

bsid

iarie

s 1

09 6

00 0

00

(109

600

000

)–

16

000

000

(16

000

000)

––

Inve

stm

ent i

n as

soci

ate

66

800

000

66

800

000

66

800

000

Cur

rent

ass

ets

984

625

1

0 00

0 00

0 1

419

000

–

6 8

48 4

43

––

– 1

9 25

2 06

8 1

9 25

2 06

8

Inve

ntor

ies

476

295

4

76 2

95

476

295

Trad

e an

d ot

her r

ecei

vabl

es 4

82 3

54

4 7

33 8

78

5 2

16 2

32

5 2

16 2

32

Cas

h an

d ca

sh e

quiv

alen

ts 5

02 2

71

10

000

000

1 4

19 0

00

1 6

38 2

70

13

559

541

13

559

541

Tota

l ass

ets

279

008

524

1

0 00

0 00

0 1

419

000

6

6 80

0 00

0 2

93 3

44 1

00

– 1

8 94

3 07

8 1

09 6

00 0

00

(128

543

078

) 6

50 5

71 6

24

2 2

00 0

00

16

000

000

30

420

770

48

620

770

699

192

394

EQU

ITY

AN

D L

IAB

ILIT

IES

Cap

ital a

nd r

eser

ves

221

019

265

–

1 4

19 0

00

66

800

000

(368

784

) (9

5 81

5 25

3) 1

66 2

16 6

94

18

943

078

109

600

000

(1

28 5

43 0

78)

359

270

922

(4

07 0

25)

16

000

000

20

833

041

36

426

016

395

696

938

Stat

ed c

apita

l 1

58 0

62 2

46

– 1

419

000

6

6 80

0 00

0 –

1 0

00

166

216

694

(6

6 21

7 69

4) 1

09 6

00 0

00

(179

450

257

) 2

56 4

30 9

89

– 1

6 00

0 00

0 1

6 00

0 00

0 2

72 4

30 9

89

Ord

inar

y sh

are

capi

tal

158

062

246

1

419

000

6

6 80

0 00

0 –

1 0

00

66

216

694

(66

217

694)

109

600

000

(1

79 4

50 2

57)

156

430

989

–

16

000

000

16

000

000

172

430

989

Pref

eren

ce s

hare

cap

ital

100

000

000

1

00 0

00 0

00

100

000

000

Res

erve

s 1

85 2

28 4

24

185

228

424

1

85 2

28 4

24

Ret

aine

d ea

rnin

gs 3

8 87

3 77

6 –

– (3

68 7

84)

(95

816

253)

95

816

253

(134

321

245

) (9

5 81

6 25

3) (4

07 0

25)

407

025

–

(95

816

253)

Attr

ibut

able

to e

quity

ow

ners

of

the

pare

nt 1

96 9

36 0

22

– 1

419

000

6

6 80

0 00

0 (3

68 7

84)

(95

815

253)

166

216

694

2

9 59

8 55

9 1

09 6

00 0

00

(128

543

078

) 3

45 8

43 1

60

(407

025

) 1

6 00

0 00

0 4

07 0

25

16

000

000

361

843

160

Non

-con

trolli

ng in

tere

st 2

4 08

3 24

3 (1

0 65

5 48

1) 1

3 42

7 76

2 2

0 42

6 01

6 2

0 42

6 01

6 3

3 85

3 77

8

Non

-cur

rent

liab

ilitie

s 5

6 82

3 27

6 1

0 00

0 00

0 –

368

784

3

85 5

65 0

68

(166

216

694

)–

– 2

86 5

40 4

34

2 6

07 0

25

– 9

587

729

1

2 19

4 75

4 2

98 7

35 1

88

Loan

s fro

m s

hare

hold

ers

66

964

817

(66

964

817)

––

Oth

er fi

nanc

ial l

iabi

litie

s 1

0 00

0 00

0 3

15 3

59 6

90

(99

251

877)

226

107

813

2

26 1

07 8

13

Loan

from

ass

ocia

ted

entit

y 3

68 7

84

368

784

2

607

025

2

607

025

2

975

809

Def

erre

d ta

xatio

n 5

2 19

3 18

6 5

2 19

3 18

6 9

587

729

9

587

729

6

1 78

0 91

5

Envi

ronm

enta

l reh

abili

tatio

n

prov

isio

n 4

630

090

3

240

561

7

870

651

7

870

651

Cur

rent

liab

ilitie

s 1

165

983

–

– 3

594

285

–

––

4 7

60 2

68

4 7

60 2

68

Trad

e an

d ot

her p

ayab

les

1 1

55 9

83

3 5

94 2

85

4 7

50 2

68

4 7

50 2

68

Prov

isio

ns 1

0 00

0 1

0 00

0 1

0 00

0

Tota

l equ

ity a

nd li

abili

ties

279

008

524

1

0 00

0 00

0 1

419

000

6

6 80

0 00

0 2

93 3

44 1

00

– 1

8 94

3 07

8 1

09 6

00 0

00

(128

543

078

) 6

50 5

71 6

24

2 2

00 0

00

16

000

000

30

420

770

48

620

770

699

192

394

––

––

––

––

––

––

––

––

Shar

es in

issu

e (’0

00)

274

928

683

6

2 50

0 00

0 8

35 0

00 0

00

1 3

70 0

00 0

00

2 5

42 4

28 6

83

200

000

000

2

742

428

683

NAV

per

sha

re (c

ents

) 7

1.63

2

.27

8.0

0 8

.00

13.

6 8

.0

13.

2

TNAV

per

sha

re (c

ents

)(2

7.78

) 2

.27

8.0

0 8

.00

2.9

(1

6.3)

1.5

144

Notes to pro formas:

1. The “Before Transaction 31 August 2016” column represents the unaudited interim financial position of Chrometco, as at

the last interim financial period ended 31 August 2016, prior to the Proposed Transaction and is extracted without adjustment

(refer Annexure 9).

2. The “Sail Minerals loan” column represents the standby loan to Chrometco of R10 million from Sail Minerals, secured by a cession of

the shares held in Rooderand, and assumes that this loan facility will be fully drawn down.

3. The “Specific issue” column represents the subscription by GSE for 62.5 million Chrometco shares for a consideration of R5

million. The net cash position reflected of R1.419 million is after the settlement of the estimated Transaction costs of R3.581 million.

The Transaction costs have been set-off against stated capital, being incurred in the issue of shares.

4. The “Investment in Sail Minerals” Column represents the implementation of “Tranche 1” of the Black Chrome Agreement, in terms of

which:

a) Chrometco will acquire 25% of the issued share capital in Sail Minerals, making it an associate of Chrometco; and

b) Sail Minerals will nominate a newly incorporated 51% held subsidiary of Chrometco (“Manco”) as mining contractor to UWR.

In settlement of the purchase price, Chrometco will issue the Tranche 1 shares, being 835 million ordinary shares in Chrometco, to

GSE. The shares are issued at the assumed fair value of the share swap, being R66.8 million, which is derived from the offer by GSE

to the Chrometco Directors.

5. The “Black Chrome before UWR acquisition” column represents the unadjusted interim financial position of Black Chrome as at the

last reviewed statement of financial position, being 31 August 2016 (refer to Annexure 1), prior to the acquisition by Black Chrome

of UWR.

6. The “Black Chrome acquisition of UWR” column represents the unadjusted statement of financial position of UWR as at the last

reviewed interim financial period ended 31 December 2016 (refer to Annexure 7).

7. The “Recapitalisation of UWR” column reflects the pro forma financial effects of the IDC amended and restated Senior Debt Loan

Agreement, concluded between the IDC, UWR, Black Chrome, Sail Minerals and the UWR minority shareholders on or around

17 August 2016, effective upon the acquisition of UWR by Black Chrome, wherein:

– The existing IDC shareholder loan in the amount of R66 964 817 is capitalised to stated capital of UWR; and

– R100 million of the existing IDC term loan is converted into preference share capital, redeemable at the option of the company

(and therefore assumed to be equity in nature).

8. The “Acquisition adjustments: Black Chrome acquisition of UWR” column reflects the adjustments arising on consolidation of UWR.

These consolidation adjustments include the elimination of pre-acquisition losses of R95 816 253 and stated capital of R66 217 694

and the recognition of non-controlling interests of (R10 655 481) and goodwill in the amount of R18 943 078.

9. The “Investment by Chrometco in Black Chrome” column represents the implementation of “Tranche 2” of the Black Chrome

Agreement whereby GSE swaps 51% of the issued share capital in Black Chrome for 1 370 000 000 Chrometco shares. The

assumed fair value of the share swap of R109.6 million is derived from the offer by GSE to the Chrometco Directors.

10. The “Adjustments relating to reverse acquisition” column represents the pro forma adjustment to account for the reverse acquisition

by UWR of Chrometco, in terms of IFRS 3: Business Combinations as follows:

a) The adjustment to stated capital is calculated with reference to the stated capital after the reverse acquisition, which is the sum

of the stated capital of the accounting acquirer (being UWR) and the fair value of the accounting acquiree (being Chrometco)

immediately prior to the Transaction and which is as follows:

in Rands

Purchase consideration (as explained below) 90 213 295

Plus stated capital of the accounting acquirer 66 217 694

Plus preference shares of the acquirer 100 000 000

Consolidated stated capital 256 430 989

The fair value of Chrometco being calculated with reference to an estimated current market capitalisation of 8c/share times

274 928 683, being the number of shares in issue prior to the Proposed Transaction, plus the Specific Issue, net of transaction

costs (being R1.419 million) and Tranche 1 of the Black Chrome Agreement, being R66.8 million.

b) The adjustments to the reserves and retained earnings are to eliminate the at acquisition reserves and retained income of the

accounting acquiree.

c) Intangible Assets of R18 943 078, being the goodwill on acquisition by Black Chrome of UWR is reversed, since UWR is the

accounting acquirer of the combined entity.

11. The “Palm Chrome” column represents the unadjusted statement of financial position of Palm Chrome as at 31 August 2016, the last

interim financial period (refer to Annexure 3).

12. The “Investment by Chrometco in Palm Chrome” column represents the implementation of the Palm Chrome Agreement, in terms of

which GSE will swap 51% of the issued share capital in Palm Chrome for 200 million Chrometco ordinary shares. The assumed fair

value of the share swap of R16 million is derived from the offer by GSE to the Chrometco Directors.

13. The “Acquisition adjustments” column represents the adjustments arising on consolidation of Palm Chrome by Chrometco.

The consolidation adjustments include the elimination of pre-acquisition losses of R407 025, a fair value adjustment attributed to the

Palmietfontein prospecting right of R46 420 770, related deferred taxation attributed to the fair value adjustment of R9 587 729 and

the recognition of a non-controlling interest of R20 426 016.

14. The “After Transaction” column represents the pro forma financial position of Chrometco after the implementation of the Transaction,

as at 31 August 2016.

145

Pro

fo

rma

sta

tem

en

t o

f co

mp

reh

en

siv

e in

co

me

Bef

ore

Tran

sact

ion

31 A

ug

ust

201

61

R’s

Sai

l Min

eral

s

loan

2

R’s

Sp

ecif

ic

Issu

e3

R’s

Inve

stm

ent

in

Sai

l Min

eral

s4

R’s

Bla

ck C

hro

me

bef

ore

UW

R

acq

uis

itio

n5

R’s

Bla

ck C

hro

me

acq

uis

itio

n o

f

UW

R6

R’s

Pal

m C

hro

me7

R’s

Aft

er

Tran

sact

ion

8

R’s

Rev

enue

––

–

Cos

t of s

ales

– (

8 94

7 48

1)–

(8

947

481)

Gro

ss p

rofit

– (

8 94

7 48

1)–

(8

947

481)

Oth

er in

com

e 1

64 4

74

1 0

22 6

01

– 1

187

075

Dep

reci

atio

n of

tang

ible

ass

ets

––

––

Am

ortis

atio

n of

inta

ngib

le a

sset

s (

3 10

0 50

0)–

(3

100

500)

Op

erat

ing

exp

ense

s (

6 03

9 23

2)–

(4

824

168)

(55

337

) (

10 9

18 7

37)

Loss

bef

ore

inte

rest

and

taxa

tion

(8

975

258)

––

(12

749

048

) (

55 3

37)

(21

779

643

)

Inve

stm

ent i

ncom

e–

325

000

4

6 11

8 5

3 91

8 –

425

036

Fina

nce

cost

(68

9 01

3) (

525

000)

––

(1

214

013)

Lo

ss b

efo

re t

axat

ion

(9

664

271)

(20

0 0

00)

46

118

– (

12 6

95 1

30)

(55

337

) (

22 5

68 6

20)

Taxa

tion

(3

183

488)

56

000

(12

913

) 3

442

110

–

301

709

Pro

fit/

Lo

ss f

or

the

year

(12

847

759

) (

144

00

0) 3

3 20

5 –

(9

253

020)

(55

337

) (

22 2

66 9

11)

Oth

er c

omp

rehe

nsiv

e in

com

e–

––

–

Ear

ning

s fr

om a

ssoc

iate

––

– 3

28 5

35

– 3

28 5

35

Tota

l co

mp

reh

ensi

ve p

rofi

t/lo

ss f

or

the

year

(12

847

759

) (

144

00

0) 3

3 20

5 3

28 5

35

– (

9 25

3 02

0) (

55 3

37)

(21

938

376

)

Attr

ibut

able

to o

wne

rs o

f the

par

ent

(11

086

251

) (

144

000)

33

205

328

535

–

(5

921

933)

(28

222

) (

16 8

18 6

66)

Attr

ibut

able

to n

on-c

ontr

ollin

g in

tere

st (

1 76

1 50

8)–

––

– (

3 33

1 08

7) (

27 1

15)

(5

119

710)

Bas

ic lo

ss p

er s

hare

(ce

nts)

(4.

03)

(0.

61)

Dilu

ted

loss

per

sha

re (

cent

s) (

4.03

) (

0.61

)

Hea

dlin

e lo

ss p

er s

hare

(ce

nts)

(4.

03)

(0.

61)

Dilu

ted

hea

dlin

e lo

ss p

er s

hare

(ce

nts)

(4.

03)

(0.

61)

Wei

ght

ed a

vera

ge

num

ber

of s

hare

s in

issu

e at

the

end

of t

he p

erio

d 2

74 9

28 6

83

2 7

42 4

28 6

83

Dilu

ted

wei

ght

ed a

vera

ge

num

ber

of s

hare

s in

issu

e 2

74 9

28 6

83

2 7

42 4

28 6

83

Bas

ic lo

ss a

nd d

ilute

d lo

ss a

ttrib

utab

le to

the

equi

ty h

old

ers

of th

e p

aren

t (

11 0

86 0

00)

(16

818

666

)

Hea

dlin

e lo

ss a

ttrib

utab

le to

eq

uity

hol

der

s of

the

par

ent

(11

086

000

) (

16 8

18 6

66)

146

Notes to pro formas:

1. The “Before Transaction 31 August 2016” column represents the unaudited statement of comprehensive income of Chrometco,

in respect of the last interim financial period for the six months ended 31 August 2016, prior to the Proposed Transaction and is

extracted without adjustment (refer to Annexure 9).

2. The “Sail Minerals Loan” column represents the loan to Chrometco of R10 million by Sail Minerals and assumes that this loan facility

will be fully drawn down. The proceeds from the loan have been assumed to have been invested on call account for the duration of

the reporting period at a rate of 6.5% per annum. The resultant interest income and interest expense (levied at the prevailing rate of

prime) is R325 000 and R525 000 respectively. These are expected to have a continuing effect on Chrometco.

3. The “Specific Issue” column represents the subscription by GSE for 62.5 million Chrometco shares for a consideration of R5 million,

after settlement of the once-off estimated Transaction costs of R3.581 million (which transaction costs have been set off against

stated capital, being directly attributable to the issue of shares). The resultant interest income is R46 118. This is expected to have

a continuing effect on Chrometco.

4. The “Investment in Sail Minerals” column represents the implementation of “Tranche 1” of the Black Chrome Agreement, in terms

of which GSE will swap 25% of the issued share capital in Sail Minerals for 835 million Chrometco ordinary shares. For statement of

comprehensive income purposes, Sail has been equity accounted and earnings from associate of R328 535 included for the six-

month period ended 31 August 2016. This will have a continuing effect on Chrometco.

5. The “Black Chrome before UWR acquisition” column represents the implementation of “Tranche 2” of the Black Chrome Agreement,

in terms of which Chrometco acquires 51% of the issued share capital in Black Chrome and issues 1 370 000 000 Chrometco shares

to GSE. This column represents the unadjusted interim statement of comprehensive income of Black Chrome, in respect of the last

reviewed financial period for the six months ended 31 August 2016 (refer Annexure 1), but prior to the acquisition of UWR. This is

expected to have a continuing effect on Chrometco.

6. The “Black Chrome acquisition of UWR” column represents the acquisition of UWR by Black Chrome. For statement of comprehensive

income purposes the reviewed financial results of UWR for the most recent six-month period ended 31 December 2016 (refer to

Annexure 7), have been consolidated into Black Chrome.

7. The “Palm Chrome” column represents the implementation of the Palm Chrome Agreement, in terms of which GSE will swap 51%

of the issued share capital in PCH for 200 million Chrometco ordinary shares. For statement of comprehensive income purposes,

the reviewed consolidated financial results of PCH for the six-month period ended 31 August 2016 (refer to Annexure 3) have

been consolidated into Chrometco, with the sole adjustment relating to the recognition of the non-controlling interest share of total

comprehensive losses of (R27 115). This will have a continuing effect on Chrometco.

8. The “After Transaction” column represents the pro forma statement of comprehensive income of Chrometco after the implementation

of the Transaction, for the six-month period ended 31 August 2016.

147

ANNEXURE 18

INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE PRO FORMA

FINANCIAL INFORMATION OF CHROMETCO

The Directors

Chrometco Limited


Johannesburg

2091

22 May 2017

INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THE COMPILATION OF

PRO FORMA FINANCIAL INFORMATION INCLUDED IN A CIRCULAR

We have completed our assurance engagement to report on the compilation of pro forma financial information

of Chrometco Limited by the Directors. The pro forma financial information, as set out on pages 142 to 146 of

the Circular, consists of a Consolidated Pro Forma Statement of Comprehensive Income and Consolidated

Pro Forma Statement of Financial Position and related notes. The pro forma financial information has been

compiled on the basis of the applicable criteria specified in the JSE Limited (JSE) Listings Requirements.

The pro forma financial information has been compiled by the Directors to illustrate the impact of the corporate

action or event, described in Annexure 17, on the group’s financial position as at 31 August 2016 and the

group’s financial performance for the period ended, as if the corporate action or event had taken place at and

for the period then ended. As part of this process, information about the group’s financial position and financial

performance has been extracted by the Directors from the group’s financial statements for the period ended

31 August 2016.

DIRECTORS’ RESPONSIBILITY FOR THE PRO FORMA FINANCIAL INFORMATION

The Directors are responsible for compiling the pro forma financial information on the basis of the applicable

criteria specified in the JSE Listings Requirements and described in Annexure 17.

REPORTING ACCOUNTANT’S RESPONSIBILITY

Our responsibility is to express an opinion about whether the pro forma financial information has been

compiled, in all material respects, by the Directors on the basis specified in the JSE Listings Requirements

based on our procedures performed. We conducted our engagement in accordance with the International

Standard on Assurance Engagements (ISAE) 3420, Assurance Engagements to Report on the Compilation of

Pro Forma Financial Information Included in a Prospectus which is applicable to an engagement of this

nature. This standard requires that we comply with ethical requirements and plan and perform our procedures

to obtain reasonable assurance about whether the pro forma financial information has been compiled, in all

material respects, on the basis specified in the JSE Listings Requirements.

For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on

any Historical Financial Information used in compiling the pro forma financial information, nor have we, in the

course of this engagement, performed an audit or review of the financial information used in compiling the

pro forma financial information.

As the purpose of pro forma financial information included in a Circular is solely to illustrate the impact of a

significant corporate action or event on unadjusted financial information of the entity as if the corporate action

or event had occurred or had been undertaken at an earlier date selected for purposes of the illustration, we

do not provide any assurance that the actual outcome of the event or transaction at (date) would have been

as presented.

A reasonable assurance engagement to report on whether the pro forma financial information has been

compiled, in all material respects, on the basis of the applicable criteria involves performing procedures to

assess whether the applicable criteria used in the compilation of the pro forma financial information provides

a reasonable basis for presenting the significant effects directly attributable to the corporate action or event,

and to obtain sufficient appropriate evidence about whether:

148

The related pro forma adjustments give appropriate effect to those criteria; and

The pro forma financial information reflects the proper application of those adjustments to the unadjusted

financial information.

Our procedures selected depend on our judgment, having regard to our understanding of the nature of the

group, the corporate action or event in respect of which the pro forma financial information has been compiled,

and other relevant engagement circumstances.

Our engagement also involves evaluating the overall presentation of the pro forma financial information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

OPINION

In our opinion, the pro forma financial information has been compiled, in all material respects, on the basis of

the applicable criteria specified by the JSE Listings Requirements and described in Annexure 17.


We have complied with the independence and other ethical requirements of the Code of Professional

Conduct for Registered Auditors issued by the Independent Regulatory Board for Auditors (IRBA Code),

which is founded on fundamental principles of integrity, objectivity, professional competence and due care,



The firm applies International Standard on Quality Control 1 and, accordingly, maintains a comprehensive



CONSENT

We consent to the inclusion of this letter and reference to our opinion in the Circular to be issued to the

shareholders of Chrometco in the form and context in which it appears.

MAZARS

Reporting Accountant Specialists


Anoop Ninan

Partner

Reporting Accountant Specialist

22 May 2017

54 Glenhove Road, Melrose Estate

149

ANNEXURE 19

INDEPENDENT EXPERT OPINION ON THE WAIVER OF THE MANDATORY OFFER

The Directors

Chrometco Limited

71 Van Beek Avenue

Glenanda

Johannesburg

2091

22 May 2017

Dear Sirs

INDEPENDENT EXPERT REPORT TO THE BOARD OF DIRECTORS OF CHROMETCO LIMITED

REGARDING THE WAIVER OF A MANDATORY OFFER

INTRODUCTION

In an announcement published by Chrometco Limited (“Chrometco”, or the “Company”) on the Stock

Exchange News Service of the JSE Limited (“JSE”) (“SENS”) on 25 August 2016, holders of ordinary shares

in the share capital of Chrometco (“Chrometco Shares”) (“Shareholders”) were advised that Chrometco has

entered into the following inter-conditional agreements on 24 August 2016:

The Palm Chrome Share Swap Agreement, entered into between Chrometco, Sail Minerals Proprietary

Limited (“Sail”) and K2016291369 (South Africa) Proprietary Limited trading as Grand Slam Enterprises

(“GSE”) in terms of which Chrometco will acquire 51% of the shares in Palm Chrome Holdings Proprietary

Limited (“Palm Chrome”) in exchange for 200 million Chrometco Shares;

The Black Chrome Share Swap Agreement, entered into between Chrometco, Sail and GSE, in terms of

which Chrometco will acquire 51% of the shares in Black Chrome Holdings Proprietary Limited (“Black

Chrome”) in exchange for 1 370 million Chrometco Shares;

25% of the shares in Sail and 51% of the shares in a company to be formed which will hold the contracting

and management agreements for the mining of the Black Chrome mining project (“Manco”) in exchange

for 835 million Chrometco Shares;

The Share Subscription Agreement, entered into between Chrometco and Sail, in terms of which GSE will

subscribe for 62.5 million Chrometco Shares for a cash consideration of R5 million at a subscription price

of R0.08 per Chrometco Shares (“Specific Issue”);

(the “Transaction”).

In terms of the the Black Chrome Share Swap Agreement, GSE has warranted that Black Chrome is the

beneficial owner and will become the registered owner of 64 ordinary shares in the issued shares capital of

Umnotho weSizwe Group Proprietary Limited (“Umnotho weSizwe”), constituting 64% of its total issued share

capital, upon Umnotho weSizwe receiving written consent required in terms of section 11 of the Mineral and

Petroleum Resources Development Act, 28 of 2002 from the Minister in order to effect the change in control

of Umnotho weSizwe to Black Chrome.

Full details of the Transaction are contained in the Circular to Chrometco shareholders (the “Circular”) to be

dated on or about 30 May 2017, which will include a copy of this letter.

The material interests of the Directors are set out in section 6.1.7 of the Circular and the effect of the Transaction

on those interest and persons are set out in this section of the Circular.

SCOPE

Subject to and post-implementation of the Transaction, GSE will control in excess of 35% of Chrometco’s

issued share capital. In terms of section 123 of the Companies Act, No. 71 of 2008 as amended

(the “Companies Act”) GSE is required to make a mandatory offer to the minority shareholders of Chrometco,

offering to acquire their shares at the highest price paid for a Chrometco Share in respect of the Transaction

150

(the “Mandatory Offer”). Regulation 86(4) of the Companies Act Regulations, 2011, as amended

(“Companies Regulations”), states that independent holders of more than 50% of the general voting rights of

all of the issued securities of an affected company may resolve to waive the benefit of such a mandatory offer

to be made (“Waiver”). In this regard, the Transaction contains a condition precedent such that GSE will not

proceed with and partake in the Transaction unless the required Waiver is obtained. We understand that the

Takeover Regulation Panel (“TRP”) has been asked to grant such a waiver after approval by Shareholders.

In terms of regulation 86(7) of the Companies Regulations, a waiver requires a fair and reasonable opinion to

be included in the Circular. BDO Corporate Finance Proprietary Limited (“BDO Corporate Finance”) has been

appointed by Chrometco as the independent expert to advise on whether the terms and conditions of the

Transaction are fair and reasonable to the minority shareholders of Chrometco.

RESPONSIBILITY

The compliance with the Companies Act is the responsibility of the Directors of Chrometco (“Directors”

“or Board”). Our responsibility is to report on the fairness and reasonableness of the terms and conditions of

the Transaction.

DEFINITION OF THE TERMS “FAIR” AND “REASONABLE”

A transaction will generally be considered fair to a company’s shareholders if the benefits received by the

shareholders, as a result of the transaction, are equal to or greater than the value surrendered by the

shareholders.

Since the transaction steps are contingent on each other and indivisible from each other, the Transaction can

only be considered in its entirety. The Transaction is also contingent on the Waiver. The Transaction may thus

be said to be fair to Shareholders (excluding GSE) if the value of one ordinary share in the Company after the

Transaction is more than the value of the same share prior to the implementation of the Transaction,

i.e. the Transactions are value-accretive to Shareholders.

The assessment of reasonableness is generally based on qualitative considerations surrounding the

Transaction.

INFORMATION UTILISED

In arriving at our opinion we have relied upon the following principal sources of information:

The Palm Chrome Share Swap Agreement, Black Chrome and Share Subscription Agreement;

The terms and conditions of the Transaction, as set out in the Circular;

Audited financial information of Chrometco for the years ended 28 February 2014, 2015 and 2016;

Unaudited financial results of Chrometco for the six months ended 31 August 2016;

Independent Competent Persons Report (“CPR”) for the prospecting rights and mining rights on the farm

Rooderand (“Rooderand Asset”), with mining rights for chromite and prospecting rights for base metals

and platinum group metals prepared by by Jacobus Adriaan Myburgh (CFA®, B.Sc. Mathematics, MGSSA,

MIASSA) (“Myburgh”) and Petrus Gerhardus Kriel (CFA®, B.Sc. Mathematics, B.Com (Hons) Economics,

MGSSA, MIASSA) (“Kriel”) on behalf of Mineral Valuation Group Proprietary Limited (“MVG”) dated 1 May

2017;

Independent CPR for the Mooihoek Chromite deposit situated in the central portion of the Eastern limb of

the Bushveld Complex (“Black Chrome Project”) prepared by Myburgh and Kriel on behalf of MVG dated

26 September 2016;

Independent CPR for the Palmietfontein prospecting right located proximally to the southwestern perimeter

of the Pilansberg National Park (“Palm Chrome Project”) prepared by Myburgh and Kriel on behalf of MVG

dated 26 September 2016;

Annual financial statements of Palm Chrome, Black Chrome, Sail and Umnotho weSizwe for the year

ended 29 February 2016;

Annual financial statements for Umnotho weSizwe for the year ended 30 June 2016;

Management accounts of Palm Chrome, Black Chrome, Manco, Sail and Umnotho weSizwe for the period

ended 31 August 2016;

Cash flow model of the Black Chrome Project;

Discussions with Chrometco Directors and management regarding the historical, budget and forecast

financial information;

151

Discussions with Chrometco Directors and management on prevailing market, economic, legal and other

conditions which may affect underlying value;

Publicly available information relating to the Chrome Mining sector in general; and

Publicly available information relating to Chrometco that we deemed to be relevant, including company

announcements and media articles.

The information above was secured from:

Directors and management of Chrometco and their advisors; and

Third party sources, including information related to publicly available economic, market and other data

which we considered applicable to, or potentially influencing Chrometco.

PROCEDURES PERFORMED

In arriving at our opinion we have undertaken the following procedures and taken into account the following

factors in evaluating the fairness and reasonableness of the Transaction:

Reviewed the terms and conditions of the Transaction;

Reviewed the terms and conditions of the Palm Chrome Share Swap Agreement, Black Chrome Share

Swap Agreement and Share Subscription Agreements;

Reviewed the audited and unaudited financial information related to Chrometco, Palm Chrome, Black

Chrome, Manco, Sail and Umnotho weSizwe;

Reviewed and obtained an understanding from management as to the forecast financial information of the

Black Chrome Project and assessed the achievability thereof by considering historical information as well

as macro-economic and sector-specific data;

Held discussions with Directors of Chrometco and GSE and considered such other matters as we consider

necessary, including assessing the prevailing economic and market conditions and trends;

Assessed the market value of Chrometco, Palm Chrome and Black Chrome in accordance with the

methodology and approach in terms of the guidelines contained in the South African Code for the reporting

of Mineral Asset Valuations the South African Code for the reporting of mineral assets valuation 2016

edition (the “SAMVAL Code”);

Determined the net present value (“NPV”) of Chrometco’s head office and administration costs;

Aggregated the valuations of Chrometco’s mining and mineral assets and head office and administration

costs as well as adjusting for financial assets and financial liabilities to determine a sum-of-the-parts

(“SOTP”) valuation of Chrometco before the Transaction and after the Transaction;

Assessed the long-term potential of Chrometco with respect to the company’s operations, mineral

resources and development plans;

Evaluated the relative risks associated with the Chrometco and the South African and global chrome

sectors;

Reviewed certain publicly available information relating to Chrometco, comparable publicly traded

companies and the industry in which the company operates that we deemed to be relevant, including

company announcements and media articles;

Where relevant, representations made by management and/or Directors were corroborated to source

documents or independent analytical procedures were performed by us, to examine and understand the

industry in which Chrometco operates, and to analyse external factors that could influence the business;

and

Held discussions with the Directors and management of Chrometco and their advisers as to their strategy

and the rationale for the Transaction and considered such other matters as we considered necessary,

including assessing the prevailing economic and market conditions and trends.

OTHER CONSIDERATIONS

In arriving at our opinion, we have considered, in addition to the procedures referred to above, other key

qualitative factors, which are set out below:

Consideration of the rationale for the Transaction as set out in the Circular.

152

APPROPRIATENESS AND REASONABLENESS OF UNDERLYING INFORMATION UTILISED AND

ASSUMPTIONS

We satisfied ourselves as to the appropriateness and reasonableness of the information and assumptions

employed in arriving at our opinion by:

Reliance on audit reports in the financial statements of Chrometco, Palm Chrome, Black Chrome, Manco,

Sail and Umnotho weSizwe;

Conducting analytical reviews on the historical financial results and the forecast financial information, such

as key ratio and trend analyses; and

Determining the extent to which representations from management were confirmed by documentary and

audited financial evidence, as well as our understanding of Chrometco and the economic environment in

which the Company operates.

LIMITING CONDITIONS

This opinion is provided in connection with and for the purposes of the Waiver. The opinion is prepared solely

for this purpose and therefore should not be regarded as suitable for use by any other party or give rise to

third party rights. The opinion does not purport to cater for each individual Shareholder’s perspective, but

rather that of the general body of Shareholders. Should a Shareholder be in doubt as to what action to take,

he or she should consult an independent adviser.

An individual Shareholder’s decision as to whether to vote in favour of any transaction may be influenced by

his particular circumstances.

We have relied upon and assumed the accuracy of the information used by us in deriving our opinion. Where

practical, we have corroborated the reasonability of the information provided to us for the purpose of our

opinion, whether in writing or obtained in discussion with management of Chrometco, by reference to publicly

available or independently obtained information. While our work has involved an analysis of, inter alia, the

annual financial statements and other information provided to us, our engagement does not constitute, nor

does it include, an audit conducted in accordance with generally accepted auditing standards.

Where relevant, forward-looking information of Chrometco, Palm Chrome, Black Chrome, Manco, Sail and

Umnotho weSizwe relates to future events and is based on assumptions that may or may not remain valid for

the whole of the forecast period. Consequently, such information cannot be relied upon to the same extent as

that derived from audited financial statements for completed accounting periods. We express no opinion as

to how closely the actual future results of Chrometco, Palm Chrome, Black Chrome, Manco, Sail and Umnotho

weSizwe will correspond to those projected. Where practicable, we have, however, compared the forecast

financial information to past trends and third party estimates as well as discussing the assumptions inherent

therein with the management of Chrometco.

We have also assumed that the Transaction will have the legal, accounting and taxation consequences

described in discussions with, and materials furnished to us by, representatives and advisors of Chrometco

and we express no opinion on such consequences. We have assumed that all agreements that will be entered

into in respect of the Transaction will be legally enforceable.

VALUATION

BDO Corporate Finance performed a valuation of Chrometco on a SOTP basis to determine whether the

Transaction represents fair value to the Shareholders. We performed a valuation of Chrometco Shares

pre-Transaction and a valuation of Chrometco Shares post-Transaction.

The mineral assets of Chrometco, Palm Chrome and Black Chrome are the primary value drivers and we

conducted a mineral asset valuation for all mineral assets by applying the methodology and approach in

accordance with the guidelines contained in the SAMVAL Code.

The valuation of Chrometco pre-Transaction and post-Transaction has been based upon an aggregation of

the value of the Company’s underlying operations and mineral assets, comprising:

The value of Chrometco’s attributable interest in its individual mining and mineral assets derived using

appropriate methodologies for exploration assets and development asset;

Net debt and cash as at the last practicable date; and

Chrometco’s unallocated head office and administration costs.

The Market Approach was the primary valuation methodology employed in respect of the Rooderand

Asset.

153

The valuation methodologies employed in respect of the Black Chrome Project included the Income Approach

as the primary valuation methodology and the Market Approach as a secondary methodology.

The Cost Approach was the primary valuation methodology employed in respect of the Palm Chrome Project.

The valuation of Chrometco’s head office and administration costs has been determined based upon the

Income Approach. The head office NPV is considered to be equal to Chrometco’s forecast pre-finance head

office and administration costs, discounted at a rate equal to Chrometco’s cost of equity.

The valuation of SAIL has been determined on an earnings-based approach. This method of valuation

estimates a sustainable level of future earnings for a business (“maintainable earnings”) and applies an

appropriate multiple to those earnings, capitalising them into a value for the business. The earnings bases to

which the multiple has been applied is EBITDA. In determining an appropriate multiple, reference has been

made to a market parameter.

VALUATION RESULTS

In undertaking the procedures and valuation exercise above, we determined:

a valuation range for Chrometco Shares of 8.0 cents to 9.0 cents per Chrometco Share before implementation

of the Transactions with a most likely value of 8.6 cents per Chrometco Share; and

a valuation range for Chrometco Shares of 11.9 cents to 17.4 cents per Chrometco Share post-

implementation of the Transaction with a most likely value of 13.4 cents per Chrometco Share.

The valuation range above is provided solely in respect of this fair and reasonable opinion and should not be

used for any other purposes.

OPINION

BDO Corporate Finance has considered the terms and conditions of the Transaction and, based upon and

subject to the conditions set out herein, is of the opinion that the terms and conditions of the Transaction,

based on quantitative considerations, are fair to the Chrometco shareholders.

We are of the opinion that the terms and conditions of the Transaction are reasonable from the perspective of

the Chrometco shareholders.

Our opinion is necessarily based upon the information available to us up to 22 May 2017, including in respect

of the financial, regulatory, securities market and other conditions and circumstances existing and disclosed

to us at the date thereof. We have furthermore assumed that all conditions precedent, including any material

regulatory, or other approvals and consents required in connection with the Transaction have been or will be

timeously fulfilled and/or obtained.

Accordingly, it should be understood that subsequent developments may affect this opinion, which we are

under no obligation to update, revise or re-affirm.

INDEPENDENCE, COMPETENCE AND FEES

We confirm that we have no direct or indirect interest in Chrometco shares or the Transaction. We also confirm

that we have the necessary qualifications and competence to provide the Fair and Reasonable Opinion on

the Transaction.

Furthermore, we confirm that our professional fees of R200 000 (excluding VAT), are not contingent upon the

success of the Transaction.

CONSENT

We consent to the inclusion of this letter and reference to our opinion in the Circular to be issued to the

shareholders of Chrometco in the form and context in which it appears.

Yours faithfully

BDO Corporate Finance Proprietary Limited

Nick Lazanakis

Director

22 Wellington Road

Parktown

2193

154

ANNEXURE 20

REPORT OF THE BLACK CHROME INDEPENDENT PROFESSIONAL EXPERT

Sail Minerals Propriety Limited

Competent Persons’ Report On the Mooihoek Chrome Mine

Eastern Bushveld South Africa

Prepared for:


Prepared by:

Independent Resource Estimations

Project Reference Number IRES 1MK08012017-1

May 2nd, 2017

Competent Persons’ Report On the Mooihoek Chrome Mine

Eastern Bushveld South Africa

Prepared for:


Prepared by:


IRES Project Number 1MK08012017-1

May 2nd, 2017

Author

Dexter S. Ferreira

SYNOPSIS

ZAR566.17m ZAR860.81mZAR698.11m ZAR1,212m

ZAR1,674m ZAR1,443m.

ZAR1,212mZAR1,674m ZAR1,443m.

Lower Value Upper Value

Preferred ValueDescription

(ZARm) (ZARm) (ZARm)

Cash Flow Approach* 1,212 1,674 1,443

Basis of Report

Purpose and Project Outline

Effective Date

Property and Location

previously Pietersburg

Legal Aspects

Asset Holder Interest % Status License

Expiry Date License

Area Minerals

Geology Setting Description

Exploration Program and Budget

Key Environmental Issues

Mineral Resources

Measured Mineral Resources – LG6 and LG6A Cut-off

Cr2O3 (%) Tonnes Cr2O3%

40.00

Indicated Mineral Resources - LG6 and LG6A Cut-off


40.00

Inferred Mineral Resources - LG6 and LG6A Cut-off


40.00

Mineral Reserves

Modifying Factors PARAMETER VALUE UNIT

Production

Financial

Statement

including Table 1; see cross-referencing in Appendix III

Capacity and Independence

Scope of Work/Materiality/Limitations and Exclusions

Risks

Copyright

Table of Contents

List of Tables

2 3

List of Figures

List of Appendices

1 PROJECT OUTLINE

Figure 1: Corporate Structure

African, Coloured and Indian people who are South African citizens

formerly known as Kulani

including Table 1

i.e. metric tonnes, kilometres, meters, and centimetres

not 2012 JORC compliant

Source Documentation EXPERT COMPANY TYPE of

STUDY DATE EXTENT of RELIANCE

EXPERT COMPANY TYPE of STUDY DATE EXTENT of

RELIANCE

1.1 Property Description

previously Pietersburg

Figure 2: Topocadastral Map of Mooihoek

Personal Inspection

1.2 Location and Infrastructure

Figure 3: Project Location Map

1.2.1 Country Profile

1.3 Adjacent Properties

Bauba Platinum Ltd.

1.4 History

funded by the previous shareholders

Table 1: Historical Production

Year MonthROM

TonnesProduced

Total 168,289

leading to the business rescue

1.5 Legal Aspects and Permitting

Figure 4: Legal Tenure and Physiography - Mooihoek

Table 2: Project Licence Details Asset Holder Interest

% Status License Expiry Date

License Area Minerals

1.6 Royalties 1.6.1 Mineral and Petroleum Resources Royalty Act (Act 28 of 2008) (MPRA)

refined

unrefined

1.7 Liabilities

currently held in Trust by Cliffe Dekker Hofmeyr Attorneys on behalf of Black Chrome Holdings and in favour of the IDC

Rehabilitation

inclusive of VAT

2 GEOLOGICAL SETTING, DEPOSIT, MINERALIZATION 2.1 Regional Geology

Figure 5: Geologic Map of the Bushveld Complex

2.1.1 Project Geology

Rustenburg Layered Suite

at the base of Rooiberg Group

The Marginal Zone

The Lower Zone

The Critical Zone

The Main Zone

Upper Zone

Figure 6: General Stratigraphy of Bushveld Sequence

Figure 7: Regional Geological Map

Structure

Deposit Type

Data Available

3 EXPLORATION AND DRILLING, SAMPLING TECHNIQUES AND DATA 3.1 Exploration

3.2 Drilling Techniques

Table 3: Mooihoek Drilling Collar Coordinates

BHID X Y Z

Depth Below Collar

(m)

True Thickness

Of Unit (m)

ChromititeUnit

Intersected

Collar Coordinates BHID X Y Z

Depth Below Collar

(m)

True Thickness

Of Unit (m)

ChromititeUnit

Intersected

Figure 8: Drillhole Location Map

3.3 Sample Method, Collection, Capture and Storage

3.4 Sample Preparation and Analysis and Sampling Governance

mentioned previously

3.4.1 Assaying Technique

Table 4 : Analytical Detection Limits for ALS Chemex Laboratory Constituent SiO2, Al2O3, MgO and

Na2OCaO, Fe2O3, K2O, MnO, TiO2, Cr2O3, and P2O5

LOI

3.4.2 Sample Storage

3.4.3 Assaying Protocol

blank

3.5 Quality Control and Quality Assurance

Table 5: Certified Analysis of AMIS0388

Element Certified Average

Value(%)

Inter-Laboratory Standard Deviation

3.5.1 Laboratory Standards

Table 6: Certified Analysis of SARM 131

Element Certified Average

Value(%)

Inter-Laboratory Standard Deviation

3.5.2 Pulp Duplicates

3.5.3 Data Verification

3.5.4 Blanks

3.5.5 CRM Analysis

3.5.6 Duplicate Analysis

Table 7: Duplicate Assays Sample

Type SampleGrade

%Cr2O3

SampleGrade

%Fe2O3

SampleGrade %SiO2

3.5.7 Grade Similarities

Table 8: %Cr2O3 Assay Value Comparisons - LG6 Original Sample

&New Sample

Original Data Grade

%Cr2O3

New Sample Grade

%Cr2O3

Comparison (%)

Proximity of Comparative

Samples (m)

Figure 9: Location of New Sample Areas

3.5.8 Summary

true thickness of 0.358mtrue thickness of 0.804m

true thickness of 1.049m

3.6 Bulk Density

this excludes QA/QC samples

including interstitial bands of disseminated chromite

weight-in-air/weight-in-waterweight-in-air

3.7 Bulk-Sampling and/or Trial Mining

lumpies fines

4 ESTIMATION AND REPORTING OF EXPLORATION RESULTS AND MINERAL RESOURCES

4.1 Geological Model and Interpretation

snapping

i.e. faulting

4.2 Estimation and Modelling

i.e. the treatment of outliers

aid

in the XY plane

in

some cases

hardLG6A

and LG6 respectively

i.e. a version of UNIX

4.3 Reasonable And Realistic Prospects For Eventual Economic Extraction

leading to the business rescue

ie. Run of

Mine

the middling

4.4 Classification Criteria

i.e. standard deviation divided by the mean

4.5 Reporting

Table 9: Measured Mineral Resources – LG6A – SAMREC Compliant Cut-off


40.00

Table 10: Indicated Mineral Resources - LG6A – SAMREC Compliant Cut-off


40.00

Table 11: Measured Mineral Resources – LG6 – SAMREC Compliant Cut-off


40.00

Table 12: Indicated Mineral Resources - LG6 – SAMREC Compliant Cut-off


40.00

Table 13: Measured Mineral Resources – LG6 and LG6A – SAMREC Compliant Cut-off


40.00

Table 14: Indicated Mineral Resources - LG6 and LG6A – SAMREC Compliant Cut-off


40.00

Table 15: Inferred Mineral Resources - LG6 and LG6A – SAMREC Compliant Cut-off


40.00

5 TECHNICAL STUDIES 5.1 Introduction

tripled

5.2 Mining Design

supplied by AARD Mining Equipment Sandvik

i.e. the waste between the LG6A and the LG6 seams

Decline Access

Central Decline

North Decline

South Decline

Allows for narrow MPV access for Conveyor maintenance

Production profiles

Figure 10: Production Profile Mooihoek Mine LOM Production Profile

0

200000

400000

600000

800000

1000000

1200000

1400000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Years From Start

Tonn

es/ann

um

Development reef tons Stoping reef tons Development waste tons Stoping waste tons

Bord Support Specification

Crown/Surface Pillar

decline on reef

Pillar Design

Table 16: Pillar and Bord Designs Bord(m)

Pillar Size (m)

Vent Holing (m)

W:H Ratio

Depth (m)

%Extraction

Bord(m)

Pillar Size (m)

Vent Holing (m)

W:H Ratio

Depth (m)

%Extraction

Strike conveyors

Dip conveyors

Mining

Table 17: Advancement Rates per Task Area of Advance Rate

Table 18: Modifying Factors PARAMETER VALUE UNIT

Production

Financial

Figure 11: Underground Development at Mooihoek

inclusive of VAT

5.3 Metallurgical and Testwork

Laboratory characterization work Pilot scale spiral testwork

rougher concentrate and mids

i.e. without a scavenger spiral

size distribution and head grades

lumpies fines

5.4 Infrastructure

i.e. adit

Figure 12: Infrastructure Layout Map

5.5 Environmental and Social

Table 19: Environmental and Social Compliance Status Act.

Regulation Or By-Law

Requirements Sectional Requirements

PermittingRequirements

CurrentCompliance

Status

Act. Regulation Or By-Law



CurrentCompliance

Status

Act. Regulation Or By-Law



CurrentCompliance

Status

Regulation 41 of MPRDA

Act No. 28 of 2002

5.6 Market Studies and Economic Criteria

lumpies fines

5.7 Risk Analysis

o

o

o

o

5.8 Economic Analysis

6 Estimation and Reporting of Mineral Reserves

7 Audits and Reviews

8 OTHER RELEVANT INFORMATION

including Table 1

D.S. Ferreira

DIRECTOR OF IRES

9 REFERENCES

The origin of certain chromite deposits of the eastern part of the Bushveld Complex

Occurrence and characteristics of chromite deposits eastern Bushveld Complex

Structure and rock sequences of the Critical Zone of the eastern Bushveld Complex

Chromite deposits of the eastern part of the Bushveld Complex

Chromite in the central sector of the Eastern Bushveld Complex, South Africa

Platinum group element, chromium, and vanadium deposits in mafic and ultramafic rocks

The chromite of the Bushveld Igneous Complex- an assessment of published information

A review of mineralization in the Bushveld Complex and some other layered intrusions

Mechanisms of formation of igneous layering

Appendix I: Glossary of Terms

Appendix II: Competent Persons Certificates

Position:

Name of Firm:

Name of Staff:

Profession:

Date of Birth:

Web Site:

Email Address:

Nationality:

Membership in Professional Societies: MEMBER PROFESSIONAL SOCIETY YEAR OF REGISTRATION REGISTRATION NUMBER

Detailed Tasks Assigned: YEAR CLIENT COMMODITY PROJECT DESCRIPTION

YEAR CLIENT COMMODITY PROJECT DESCRIPTION


3

3


3


Key Qualifications:

Education: DEGREE/DIPLOMA FIELD INSTITUTION YEAR

Employment Record: POSITION COMPANY JOB DESCRIPTION DURATION

POSITION COMPANY JOB DESCRIPTION DURATION

optimizing

Languages:

speak/read/writespeak/read/write

speak/read/writespeak/read

Certification:

SAMREC TABLE 1 Exploration Results Mineral Resources Mineral Reserves

Section 1: Project Outline

Section 1.1 on page 15


See on page 16


Section 1.2.1 on page 17

Figure 2 on page 16 Figure 2 on page 16 and Personal Inspection on page 16




Section 1.4 on page 18 and Table 1 on page 19

Not Applicable






Section 1.5 on page 20Section 1.6 on

page 21

Section 1.7 on page 22Section 2: Geological Setting, Deposit, Mineralization

Section 2 on page 23






Section 2.1.1 on page 25Section 3: Exploration and Drilling, Sampling Techniques and Data













Section 3.6 on page 39Section 3.6 on page 39

Section 3.6 on page 39Section 4: Estimation and Reporting of Exploration Results and Mineral Resources






Section 4.2 on page 40 and








on page 41



Section 4.3 on page 41Section 4.3 on page 41










Section 4.5 on page 42Section 5: Technical Studies



Table 18 on page 48








Section 5.4on page 51













Section 6: Estimation and Reporting of Mineral Reserves






Section 7: Audits and Reviews


Section 7 on page 57Section 8: Other Relevant Information

Section 9: Qualification of Competent Person(s) and other key technical staff. Date and Signature Page

Appendix IICapacity and

Independence on page 7

Appendix II and Effective Date on page 4

JSE LISTING REQUIREMENTS ITEM DESCRIPTION REFERENCE

Section 12.9 (a)

Section 12.9 (b)

Section 12.9 (c)

Section 12.9 (d)

Section 12.9 (e)

Section 12.9 (e)(i)

Section 12.9 (e)(ii)

Section 12.9 (e)(iii)

Section 12.9 (f)

Section 12.9 (g)

Section 12.9 (h)

Section 12.9 (h)(i) Section 12.9 (h)(ii) Section 12.9 (h)(iii) Section 12.9 (h)(iv) Section 12.9 (h)(v) Section 12.9 (h)(vi) Section 12.9 (h)(vii) Section 12.9 (h)(viii) Section 12.9 (h)(ix) Section 12.9 (h)(x)

Section 12.9 (h)(xi)

Section 12.9 (h)(xii)

Mooihoek Deposit

Final Model

September 2006

Dexter S. Ferreira

Table of Contents

Table of Tables

Table of Figures

Table of Appendices

Introduction

1 Database

2 Naïve Statistics and Composites

Table 20: Naive Statistics - Uncut Composites - Cr2O3Cr2O3STATISTIC LG6A LG6

Number of Data Mean (%) Std. Deviation Coeff. Of Var. Maximum (%) Upper Qrtle (%) Median (%) Lower Qrtle (%) Minimum (%)

3 Sample Spacing

Table 21: Euclidean Spacing - Composites

REEFAverage

Meters

Maximum

Meters

Lower Quart.

Meters

Median

Meters

Upper Quart.

MetersLG6A LG6ALL 265.57 1298.99 181.377 290.90 304.96

aid

4 Cutting Limits

5 Geological Modelling

Figure 13: String Construction

Figure 14: String Construction with Transparent Bounding Box

Table 22: Rock Coding ROCKTYPE REEF

Table 23: Wireframe Volumes - Comparison

ROCKTYPE REEFWireframe

Volume(m3)

DiscretizedVolume

(m3)

PercentDifference

Figure 15: Final Wireframes

6 Methodology

hard

Table 24: Estimation Search Strategy Principal Direction Minor Direction Vertical Direction

MineralizedReef Radius

MetersAzimuth/ Plunge

Degrees

Radius Meters

Azimuth/ Plunge

Degrees

Radius Meters

Azimuth/ Plunge

DegreesLG6A LG6A

7 Cross Validation

Table 25: Comparison of Actual10 and Estimated Means per Reef Type REEF Comps Estimate LG6A LG6

8 Residual Analysis

Table 26: Residual Analyses REEF No. of

Composites Estimate

LG6A LG6

9 Classification

10 Specific Gravity

11 Results

Table 27 to

Table 27: Measured Mineral Resources by Cut-off – LG6A Reef - Cr2O3Cut-off


0.0040.00

Table 28: Indicated Mineral Resources by Cut-off – LG6A Reef - Cr2O3Cut-off


Table 29: Inferred Mineral Resources by Cut-off – LG6A Reef - Cr2O3Cut-off


Table 30: Total Mineral Resources by Cut-off – LG6A Reef - Cr2O3Cut-off


Table 31: Measured Mineral Resources by Cut-off – LG6 Reef - Cr2O3Cut-off


Table 32: Indicated Mineral Resources by Cut-off – LG6 Reef - Cr2O3Cut-off


Table 33: Inferred Mineral Resources by Cut-off – LG6 Reef - Cr2O3Cut-off


Table 34: Total Mineral Resources by Cut-off – LG6 Reef - Cr2O3Cut-off


Table 35: Measured Mineral Resources by Cut-off - Both Reefs - Cr2O3Cut-off


Table 36: Indicated Mineral Resources by Cut-off - Both Reefs - Cr2O3Cut-off


Table 37: Inferred Mineral Resources by Cut-off - Both Reefs - Cr2O3Cut-off


12 Discussion

Appendix VI: Boxplot

Appendix VII: Omni Directional Variograms

Source Tonnage (tonnes)

Cr2O3 Grade (%)

Cr2O3 Content (tonnes)

Total Mineral Resources 20,207,000 43.44 8,778,134 *Cut off Grade 40% Cr2O3

*IRES 2016 SAMREC Compliant

ZAR566.17m ZAR860.81mZAR698.11m

ZAR1,212m ZAR1,674mZAR1,443m.


DescriptionLower Value

(ZARm)Upper Value

(ZARm)

PreferredValue(ZARm)

Market Approach 566 861 698Cash Flow Approach* 1,212 1,674 1,443*Preferred Valuation Approach

Figure 1 : Project Location Satellite Image

Table 1 : Mineral Resources – Chromite

SourceTonnage(tonnes)

Cr2O3 Grade(%)

Cr2O3 Content(tonnes)

Measured Mineral ResourcesLG6A Reef 4,608,000 43.72 2,014,618LG6 Reef 4,738,000 44.35 2,101,303Total Measured Mineral Resources 9,346,000 44.04 4,115,921Indicated Mineral ResourcesLG6A Reef 1,689,000 43.49 734,546LG6 Reef 6,474,000 42.82 2,772,167Total Indicated Mineral Resources 8,163,000 42.96 3,506,713Inferred Mineral ResourcesLG6A Reef 722,000 42.85 309,377LG6 Reef 1,976,000 42.82 846,123Total Inferred Mineral Resources 2,698,000 42.83 1,155,500Total Mineral ResourcesLG6A Reef 7,019,000 43.58 3,058,541LG6 Reef 13,188,000 43.37 5,719,593Total Mineral Resources 20,207,000 43.44 8,778,134*Cut off Grade 40% Cr2O3

*IRES 2017 SAMREC Compliant

Figure 2 : Project Development Stage

Figure 3: Value Distribution Graphs – In-Situ Measured Resource Value Range – Cr2O3 Contained Tonnes

Figure 4: Value Distribution Graphs – In-Situ Indicated Resource Value Range – Cr2O3 Contained Tonnes

Figure 5: Value Distribution Graphs – In-Situ Inferred Resource Value Range – Cr2O3 Contained Tonnes

ZAR566.17m ZAR860.81mZAR698.11m

Table 2 : Valuation Summary: Market Approach In Situ Values Project Values

Resource CategoryCr2O3 Content

(tonnes) Lower Value(ZAR/tonne)

Upper Value(ZAR/tonne)

Preferred(ZAR/tonne)

Lower Value(ZARm)

Upper Value(ZARm)

Preferred(ZARm)

Measured Mineral Resources 2,772,167 120.00 180.00 149.00 332.66 498.99 413.05Indicated Mineral Resources 3,506,713 60.00 90.00 71.70 210.40 315.60 251.43Inferred Mineral Resources 1,155,500 20.00 40.00 29.10 23.11 46.22 33.63

Total 7,434,380 76.16 115.79 93.90 566.17 860.81 698.11

Table 3: Commodity Prices Simulation RangeDescription Unit Base Value

Lower Value Upper ValueRaw LG6 Ore Price (ZAR/tonne) 1,500.00 1,200.00 1,800.00

Table 4: Project Specific Risk Build-up FACTOR

(x%)RANK

FACTOR SENSITIVITYμ

Reserves/Resources 3.00 Above Normal 0.40Commodity Prices 3.00 Above Normal 0.40Operating Costs 2.50 Above Normal 0.40Political and Country Risk 2.25 Above Normal 0.40Social And Environmental 2.00 Normal 0.10Location 1.50 Normal 0.10Capital Costs 1.50 Above Normal 0.40Management 1.00 Normal 0.10Ownership 1.00 Normal 0.10Taxation 0.80 Normal 0.10Recovery 0.80 Above Normal 0.40Data Quality 0.60 Normal 0.10Geology 0.50 Normal 0.10Cost Inflation 0.40 Above Normal 0.40Mining Processing Method 0.40 Normal 0.10Development Stage 0.20 Normal 0.10Life Of Mine 0.20 Normal 0.10Scale of Project 0.20 Normal 0.10Expansion 0.10 Normal 0.10

TOTAL 6.23

14.8%

Table 5: Production Description Unit LOM Total 2017 2018 2019 end

ROM ProductionBase Value (tonne) 11,555,940 338,209 750,678 833,232Lower Value (tonne) 202,925 450,407 499,939Upper Value (tonne) 405,851 900,814 999,878Saleable ProductBase Value (tonne) 8,666,955 253,657 563,009 624,924Lower Value (tonne) 121,755 270,244 299,964Upper Value (tonne) 365,266 810,732 899,891

Table 6: Operating Expenditure Simulation Range

Description UnitBaseValue Lower

ValueUpperValue

Steady State Mining Costs* (ZAR/ROM tonne) 369.00 313.65 461.25Mining Cost Escalation (%/annum) 5% 4% 15%Product Handling (ZAR/Sales tonne) 12.00 10.20 15.00General and Administration (ZAR/Sales tonne) 25.00 21.25 31.25Social and Labour Plan (ZAR/ROM tonne) 5.00 4.25 6.25Environmental and Closure Provisions (ZAR/ROM tonne) 6.00 5.10 7.50* During ramp up, Mining Costs Starts at ZAR427/tonne and decreases as productionincreases

Table 7: Capital Expenditure Simulation Range

Description Unit Item Price Amount TotalLower Value Upper Value

LHD (ZAR) 3,700,000 10 37,000,000 33,300,000 48,100,000Drill Rig (ZAR) 6,600,000 5 33,000,000 29,700,000 42,900,000Belt Extension (ZAR) 7,600,000 1 7,600,000 6,840,000 9,880,000Workshop Extension (ZAR) 3,000,000 1 3,000,000 2,700,000 3,900,000Other Infrastructure (ZAR) 19,400,000 1 19,400,000 17,460,000 25,220,000Total Capital (ZAR) 100,000,000 90,000,000 130,000,000Stay in Business Capital (% of Opex) 2.5% 2.3% 3.3%

Table 8: Simulation Analysis - Key Statistics Description Unit Value

Iterations (#) 10,000Minimum NPV (ZARm) 385Maximum NPV (ZARm) 2,949Average NPV (ZARm) 1,212Standard Deviation (ZARm) 564

Figure 6: NPV Distribution Graph

Figure 7: Spider Graph on NPV


Table 9: Valuation Summary: Cash Flow Approach


(ZARm)Upper Value

(ZARm)Preferred Value

(ZARm)Mooihoek Chrome Mine 1,212 1,674 1,443

ZAR566.17m ZAR860.81mZAR698.11m



Table 10: Valuation Summary


(ZARm)Upper Value

(ZARm)


Market Approach 566 861 698Cash Flow Approach* 1,212 1,674 1,443

*Preferred Valuation Approach

ZAR566.17m ZAR860.81mZAR698.11m



Table 11: Valuation Summary


(ZARm)Upper Value

(ZARm)


Market Approach 566 861 698Cash Flow Approach* 1,212 1,674 1,443

*Preferred Valuation Approach

Iaan Myburgh, CFA®

Mineral Industry Advisor

Gert Kriel, CFA®


App

endi

x 1:

Dat

a S

uppo

rting

Chr

omite

Val

uatio

n In

-Situ

Val

ues

Mea

sure

dIn

dica

ted

Infe

rred

Ass

et H

olde

rM

etho

dLo

wM

idH

igh

Low

Mid

Hig

hLo

wM

idH

igh

(ZA

R/to

nne)

(ZA

R/to

nne)

(ZA

R/to

nne)

(ZA

R/to

nne)

(ZA

R/to

nne)

(ZA

R/to

nne)

(ZA

R/to

nne)

(ZA

R/to

nne)

(ZA

R/to

nne)

App

endi

x 2:

Cas

h Fl

ow M

odel

No

tesLo

okup

Unit

Total

s20

1720

1820

1920

2020

2120

2220

2320

2420

2520

2620

2720

2820

2920

3020

31PR

ODUC

TIONPR

OFILE

Mining

Tonn

esProd

_Mining

(tonn

es)

11,55

5,940

338,2

09750,6

78833,2

32833,2

32833,2

32833,2

32833,2

32833,2

32833,2

32833,2

32833,2

32833,2

32833,2

32833,2

32468,2

69Sales

Tonn

esProd

_Yield

(tonn

es)

8,666,95

5253,6

57563,0

09624,9

24624,9

24624,9

24624,9

24624,9

24624,9

24624,9

24624,9

24624,9

24624,9

24624,9

24624,9

24351,2

02RE

VENU

ECh

romite

OreS

ales

Eco_

Com_Price

(ZAR)

13,00

0,432,50

0380,4

84,93

7844,5

12,75

0937,3

86,00

0937,3

86,00

0937,3

86,00

0937,3

86,00

0937,3

86,00

0937,3

86,00

0937,3

86,00

0937,3

86,00

0937,3

86,00

0937,3

86,00

0937,3

86,00

0937,3

86,00

0526,8

02,81

3To

talReven

ue(ZA

R)13,00

0,432,50

0380,4

84,93

7844,5

12,75

0937,3

86,00

0937,3

86,00

0937,3

86,00

0937,3

86,00

0937,3

86,00

0937,3

86,00

0937,3

86,00

0937,3

86,00

0937,3

86,00

0937,3

86,00

0937,3

86,00

0937,3

86,00

0526,8

02,81

3OP

ERAT

INGCO

STS

(ZAR)

5,620,85

5,265

136,2

62,62

9280,3

63,01

4307,4

62,60

8322,8

35,73

8338,9

77,52

5355,9

26,40

2373,7

22,72

2392,4

08,85

8412,0

29,30

1432,6

30,76

6454,2

62,30

4476,9

75,41

9500,8

24,19

0525,8

65,40

0310,3

08,39

0(ZA

R)104,0

03,46

03,0

43,87

96,7

56,10

27,4

99,08

87,4

99,08

87,4

99,08

87,4

99,08

87,4

99,08

87,4

99,08

87,4

99,08

87,4

99,08

87,4

99,08

87,4

99,08

87,4

99,08

87,4

99,08

84,2

14,42

3(ZA

R)288,8

98,50

08,4

55,22

118,76

6,950

20,83

0,800

20,83

0,800

20,83

0,800

20,83

0,800

20,83

0,800

20,83

0,800

20,83

0,800

20,83

0,800

20,83

0,800

20,83

0,800

20,83

0,800

20,83

0,800

11,70

6,729

(ZAR)

57,77

9,700

1,691,04

43,7

53,39

04,1

66,16

04,1

66,16

04,1

66,16

04,1

66,16

04,1

66,16

04,1

66,16

04,1

66,16

04,1

66,16

04,1

66,16

04,1

66,16

04,1

66,16

04,1

66,16

02,3

41,34

6(ZA

R)69,33

5,640

2,029,25

34,5

04,06

84,9

99,39

24,9

99,39

24,9

99,39

24,9

99,39

24,9

99,39

24,9

99,39

24,9

99,39

24,9

99,39

24,9

99,39

24,9

99,39

24,9

99,39

24,9

99,39

22,8

09,61

5(ZA

R)6,1

40,87

2,565

151,4

82,02

7314,1

43,52

4344,9

58,04

8360,3

31,17

8376,4

72,96

5393,4

21,84

2411,2

18,16

2429,9

04,29

8449,5

24,74

1470,1

26,20

6491,7

57,74

4514,4

70,85

9538,3

19,63

0563,3

60,84

0331,3

80,50

2CA

PITAL

EXP

ENDI

TURE

(ZAR)

20,00

0,000

20,00

0,000

00

00

00

00

00

00

00

(ZAR)

80,00

0,000

020,00

0,000

20,00

0,000

20,00

0,000

20,00

0,000

00

00

00

00

00

(ZAR)

153,5

21,81

43,7

87,05

17,8

53,58

88,6

23,95

19,0

08,27

99,4

11,82

49,8

35,54

610,28

0,454

10,74

7,607

11,23

8,119

11,75

3,155

12,29

3,944

12,86

1,771

13,45

7,991

14,08

4,021

8,284,51

3253,5

21,81

423,78

7,051

27,85

3,588

28,62

3,951

29,00

8,279

29,41

1,824

9,835,54

610,28

0,454

10,74

7,607

11,23

8,119

11,75

3,155

12,29

3,944

12,86

1,771

13,45

7,991

14,08

4,021

8,284,51

3PR

ETAX

CASH

FLOW

NetO

peratin

gIncom

e(ZA

R)6,8

59,55

9,935

229,0

02,91

0530,3

69,22

6592,4

27,95

2577,0

54,82

2560,9

13,03

5543,9

64,15

8526,1

67,83

8507,4

81,70

2487,8

61,25

9467,2

59,79

4445,6

28,25

6422,9

15,14

1399,0

66,37

0374,0

25,16

0195,4

22,31

1Ne

tOpe

ratin

gIncom

eAfte

rCap

italExpen

diture

(ZAR)

6,606,03

8,121

205,2

15,86

0502,5

15,63

8563,8

04,00

1548,0

46,54

2531,5

01,21

1534,1

28,61

2515,8

87,38

4496,7

34,09

5476,6

23,14

1455,5

06,63

9433,3

34,31

2410,0

53,36

9385,6

08,37

9359,9

41,13

9187,1

37,79

8Assessed

Loss

Calcu

lation

Accumula

tedLoss

Open

ingB

alance

(ZAR)

00

00

00

00

00

00

00

0Cu

rrent

Year

Cape

x(ZA

R)23,78

7,051

27,85

3,588

28,62

3,951

29,00

8,279

29,41

1,824

9,835,54

610,28

0,454

10,74

7,607

11,23

8,119

11,75

3,155

12,29

3,944

12,86

1,771

13,45

7,991

14,08

4,021

8,284,51

3Clo

singC

apex

andOp

ening

Accumula

tedL

oss

(ZAR)

23,78

7,051

27,85

3,588

28,62

3,951

29,00

8,279

29,41

1,824

9,835,54

610,28

0,454

10,74

7,607

11,23

8,119

11,75

3,155

12,29

3,944

12,86

1,771

13,45

7,991

14,08

4,021

8,284,51

3RO

YALTYP

AYMEN

TSEB

ITused

forR

oyalt

yRateC

alculation

(ZAR)

205,2

15,86

0502,5

15,63

8563,8

04,00

1548,0

46,54

2531,5

01,21

1534,1

28,61

2515,8

87,38

4496,7

34,09

5476,6

23,14

1455,5

06,63

9433,3

34,31

2410,0

53,36

9385,6

08,37

9359,9

41,13

9187,1

37,79

8Ro

yalty

Form

ula(%

)8.57

9.03

9.07

9.05

9.03

9.34

9.32

9.31

9.29

9.27

9.25

9.23

9.20

9.16

9.12

Royalty

Rate

(%)

7.00%

7.00%

7.00%

7.00%

7.00%

7.00%

7.00%

7.00%

7.00%

7.00%

7.00%

7.00%

7.00%

7.00%

7.00%

Royalty

Paym

ent

(ZAR)

910,0

30,27

526,63

3,946

59,11

5,893

65,61

7,020

65,61

7,020

65,61

7,020

65,61

7,020

65,61

7,020

65,61

7,020

65,61

7,020

65,61

7,020

65,61

7,020

65,61

7,020

65,61

7,020

65,61

7,020

36,87

6,197

TAXP

AYMEN

TSAccumula

tedLoss

Open

ingB

alance

(ZAR)

00

00

00

00

00

00

00

0Taxable

Income/(Lo

ss)for

perio

d(ZA

R)178,5

81,91

4443,3

99,74

5498,1

86,98

1482,4

29,52

2465,8

84,19

1468,5

11,59

2450,2

70,36

4431,1

17,07

5411,0

06,12

1389,8

89,61

9367,7

17,29

2344,4

36,34

9319,9

91,35

9294,3

24,11

9150,2

61,60

1Taxable

Income/(accum

ulatedL

oss)

(ZAR)

178,5

81,91

4443,3

99,74

5498,1

86,98

1482,4

29,52

2465,8

84,19

1468,5

11,59

2450,2

70,36

4431,1

17,07

5411,0

06,12

1389,8

89,61

9367,7

17,29

2344,4

36,34

9319,9

91,35

9294,3

24,11

9150,2

61,60

1

Taxable

Balan

ce(ZA

R)178,5

81,91

4443,3

99,74

5498,1

86,98

1482,4

29,52

2465,8

84,19

1468,5

11,59

2450,2

70,36

4431,1

17,07

5411,0

06,12

1389,8

89,61

9367,7

17,29

2344,4

36,34

9319,9

91,35

9294,3

24,11

9150,2

61,60

1TaxP

aymen

t(ZA

R)1,5

94,88

2,197

50,00

2,936

124,1

51,92

9139,4

92,35

5135,0

80,26

6130,4

47,57

3131,1

83,24

6126,0

75,70

2120,7

12,78

1115,0

81,71

4109,1

69,09

3102,9

60,84

296,44

2,178

89,59

7,581

82,41

0,753

42,07

3,248

PostTaxC

ashFlo

w(ZAR

)4,1

01,12

5,649

128,5

78,978

319,247,817

358,6

94,62

6347,3

49,256

335,436,617

337,3

28,347

324,1

94,662

310,404,294

295,9

24,407

280,7

20,52

6264,7

56,45

1247,9

94,172

230,3

93,77

9211,9

13,366

108,188,3

53Accumula

tedCa

shFlo

w(ZA

R)128,5

78,97

8447,8

26,79

5806,5

21,42

11,1

53,87

0,677

1,489,30

7,294

1,826,63

5,641

2,150,83

0,303

2,461,23

4,597

2,757,15

9,004

3,037,87

9,530

3,302,63

5,980

3,550,63

0,152

3,781,02

3,930

3,992,93

7,296

4,101,12

5,649

Discou

nted

Cash

Flow

14.8%

DR_R

eal

(ZAR

)1,6

73,98

7,821

111,9

63,950

242,071,924

236,8

37,02

7199,7

09,786

167,939,048

147,0

62,619

123,0

73,220

102,610,940

85,18

3,401

70,364,98

557,78

7,942

47,134,662

38,13

0,975

30,540,332

13,57

7,011

Appendix 3: CV's CV: Iaan Myburgh

Full Names

Nationality

Education

Competency

Industry

Profile

Software Tools

Languages

Employment History

Oct 2015 – March 2016 African Chrome Fields – Feasibility and Implementation of Chrome Spiral Plants and Mine sites

Management Consulting and Project Management

Jan 2015 – Sept 2015 Eurasia Resources Group Africa – Business Improvement Team

Business Improvement Team member

Nov 2013 – May 2014 GoldBridges Global Resources - Competent Person’s Report

Preparing Financial Valuation Models

Sep 2011 – Nov 2011 Optimum Coal – Fairness Opinion Drafting of Fairness Opinion and Valuation of mineral assets

Aug 2012 – Sep 2012 Chrometco Ltd – JSE Fairness Opinion Drafting of Fairness Opinion and Valuation of mineral assets

Dec 2011 – Jan 2012 Frontier Rare Earths – Preliminary Economic Assessment Preparing Financial Valuation Models

Nov 2011 – Feb 2012 Tanzanian Royalty – Preliminary Economic Assessment Preparing Financial Valuation Models

Presentations at Short Courses

2013 Introduction to the Minerals Industry for Auditors by Venmyn Deloitte

Co-coordinator

2012 and 2013 Compliance and Reporting Rules in the Minerals Industry Course by Venmyn Deloitte

Introduction to Finance

2012 Mineral Asset Valuation Course by South African Institute of Mining and Metallurgy

Mineral Asset Valuation using Probabilistic Modelling Techniques

Education B.Sc. Mathematics, University of Pretoria

Professional training Passed CFA Level 3 Exam, received Charter in January 2016

Professional Associations and Membership

CV: Gert Kriel

Full Names

Nationality

Education

Competency

Industry

Profile

Software Tools

Languages

Employment History

Oct 2015 – June 2016 African Chrome Fields – Feasibility and Implementation of Chrome Spiral Plants and Mine sites




Nov 2012 – Dec 2014 Venmyn Deloitte – Senior Consultant

Specialising in Mineral Asset Valuations

Jul 2011 – Oct 2012 Venmyn Rand (Pty) Ltd – Mineral Industry Analyst Specialising in Mineral Asset Valuations

Apr 2009 – Jun 2011 SDT Financial Software Solutions – Product Implementation Consultant

Implementation of Insurance Administration Software named Exergy


BCom Hons (Economics), University of South Africa


287

ANNEXURE 21

REPORT OF THE PALM CHROME INDEPENDENT PROFESSIONAL EXPERT

This document is not compliant with Section 12 of the JSE Listings Requirements and not compliant with the

South African Code for Reporting of Exploration Results, Mineral Resources and Mineral Reserves and has

not been approved by any regulatory body.

Shareholders are advised that a fully compliant competent persons report, compliant with Section 12 of the

JSE Listings Requirements will be completed once Chrometco has competed the prospecting program as set

out in this annexure.

NAME OF APPLICANT :

REFERENCE NUMBER

AMENDED PROSPECTING

WORKS PROGRAMME

SUBMITTED FOR A PROSPECTING RIGHT APPLICATION

WITHOUT BULK SAMPLING FOR

AS REQUIRED IN TERMS OF SECTION 16 READ TOGETHER WITH REGULATION

7(1) OF THE MINERAL AND PETROLEUM RESOURCES DEVELOPMENT ACT,

2002 (ACT 28 of 2002)

373

ANNEXURE 22

REVISED LISTING PARTICULARS OF CHROMETCO





REVISED LISTING PARTICULARS

The definitions and interpretations set out on page 8 of this Circular apply to these Revised Listing Particulars.

These Revised Listing Particulars have been prepared on the assumption that the resolutions proposed in the

notice of General Meeting, forming part of the Circular, to which these Revised Listing Particulars are attached,

will be passed at the General Meeting of Shareholders to be held on 18 July 2017, and that the Transaction

detailed in the Circular will be implemented.

These Revised Listing Particulars are not an invitation to the public to subscribe for securities, but are issued

in compliance with the JSE Listings Requirements, for the purpose of providing information to the public and

Shareholders with regard to the Company.

As at the date of this Circular, the authorised share capital of the Company consists of 10 000 000 000

ordinary shares with no par value and the issued share capital of the Company consists of 274 928 683

ordinary shares with no par value. The total value of the Company’s issued share capital is approximately

R158 million. All ordinary shares rank pari passu with each other. The Company does not have any treasury

shares in issue.

Assuming the Transaction is approved by Shareholders and implemented, the Transaction will involve the

issue by Chrometco of the Acquisition Shares and the Specific Issue Shares in dematerialised form, constituting

89.74% of Chrometco’s issued share capital following the issue. The Acquisition Shares and the Specific

Issue Shares will rank pari passu with the Company’s existing ordinary shares and, without derogating from

the generality of the aforesaid, will rank together with the existing ordinary shares of the Company for

distributions. No convertibility or redemption provisions are applicable to the Acquisition Shares or the

Specific Issue Shares.

The authorised share capital of the Company consists of 10 000 000 000 ordinary shares with no par value

and the issued share capital of the Company will consist of 2 742 428 683 ordinary shares with no par value.

The total value of the Company’s issued share capital will be approximately R163 million.

Shareholders are advised that their ordinary shares can only be traded on the JSE in dematerialised form and

accordingly all Shareholders who hold their ordinary shares in certificated form will have to dematerialise their

share certificates in order to trade their ordinary shares on the JSE. Such Shareholders must make necessary

arrangements with their CDSP or broker, in terms of the custody agreement with their CSDP or broker.

The current Directors of the Chrometco Group whose names are given in paragraph 6 of this Annexure 22

collectively and individually accept full responsibility for the accuracy of the information furnished relating to

the Chrometco Group, respectively, and certify that, to the best of their knowledge and belief, there are no

facts which have been omitted which would make any statement false or misleading, and that all reasonable

enquiries to ascertain such facts have been made, and that these Revised Listing Particulars contain all

information required by law and the JSE Listings Requirements.

374

Transaction Adviser and designated adviser Auditors and Reporting Accountants

Independent Expert

Date of issue: 30 May 2017.

Copies of this Revised Listing Particulars are available in English only and may, from 30 May 2017 until 18 July

2017 (both days inclusive), be obtained from the registered office of Chrometco and PSG Capital, at the

addresses set out in the “Corporate Information” section of this Circular. A copy of this Circular will also be

available on Chrometco’s website (www.chrometco.co.za).

375

CORPORATE INFORMATION, DEFINITIONS AND INTERPRETATIONS

The Corporate Information which appears on the inside front cover of the Circular in relation to the Chrometco

Group, applies to these Revised Listing Particulars.

In these Revised Listing Particulars, unless stated otherwise or the context indicates otherwise, all words,

terms and/or expressions will have the same meaning as ascribed to them in the Circular. Reference to the

singular shall include the plural and vice versa, words denoting one gender shall include the other genders,

words and expressions denoting natural persons shall include juristic persons and associations of persons.

376

SALIENT DATES AND TIMES

The salient dates and times which appear on page 7 of this Circular, also applies to these Revised Listing

Particulars.

377

TABLE OF CONTENTS

The definitions and interpretations commencing on page 8 of the Circular apply to the following table of

contents:

Page

1. Purpose of the revised listing particulars 378

2. Overview and business of Chrometco 378

3. Overview and business of Black Chrome, Palm Chrome and Sail Minerals 379

4. Overview of the combined Group 379

5. Prospects 379

6. Management and corporate governance 379

7. Capital structure 384

8. Financial information 386

9. Acquisitions and properties acquired 388

10. Disposal of properties 389

11. Additional information 389

APPENDIXES TO ANNEXURE 22

Appendix 1 Extracts from the Memorandum of Incorporation of Chrometco 391

Appendix 2 Other directorships held by Directors 395

Appendix 3 Corporate governance statement 397

Appendix 4 Share trading history of Chrometco 400

Appendix 5 Report of the Chrometco Independent Professional Expert 401

Appendix 6 Material borrowings 560

378





Directors







REVISED LISTING PARTICULARS

1. PURPOSE OF THE REVISED LISTING PARTICULARS

1.1 The purpose of these Revised Listing Particulars are to:

1.1.1 provide Shareholders, both existing and potential, with the relevant information regarding

the Chrometco Group, including their assets, liabilities and Directors and management,

post the successful implementation of the Transaction; and

1.1.2 provide Shareholders, both existing and potential, with information on the strategy and

vision of the Chrometco Group, post the successful implementation of the Transaction.

1.2 In terms of the Transaction, Chrometco will acquire the Black Chrome Shares, the Palm Chrome

Shares and the Sail Minerals shares from GSE in exchange for the Acquisition Shares.

1.3 Sail Minerals will also subscribe for the Specific Issue Shares.

1.4 The salient details relating to the Transaction are set out in paragraph 4 of the Circular.

2. OVERVIEW AND BUSINESS OF CHROMETCO

2.1 Incorporation

2.1.1 Chrometco was formed and incorporated in Johannesburg on 23 October 2002.

2.1.2 As at the Last Practicable Date, Chrometco had four subsidiaries, being Rooderand Chrome

(Proprietary) Limited (74%), Chrometco Mining Services (Proprietary) Limited (100%),

Korpo Trust (Proprietary) Limited (100%) and Pilanesburg (Proprietary) Limited (76%).

2.1.3 As at the Last Practicable Date, Palm Chrome had Palm as its only subsidiary.

2.1.4 As at the Last Practicable Date, Black Chrome had no subsidiaries.

2.1.5 As at the Last Practicable Date, Sail Minerals had no subsidiaries.

2.1.6 Subsequent to the implementation of the Acquisitions, Black Chrome and Palm Chrome will be

major subsidiaries of Chrometco. Chrometco will own 51 shares in Black Chrome being 51%

of Black Chrome and 51 shares in Palm Chrome being 51% of Palm Chrome.

379

2.2 Overview

2.2.1 Chrometco is an exploration and mining company which focuses on Chrome exploration

and mining in South Africa. It is a key driver of the consolidation of the associated PGMs

rights associated with its chrome rights at the Rooderand mine. It is also exploring other

business opportunities related to chrome and PGMs.

2.2.2 The year under review involved the limited mining of LG6 Chrome ore on the Rooderand

property as well as the conclusion of the consolidation of the Company’s chrome mining

rights with the co-occurring PGMs in term of which 70 million Chrometco Shares were

issued to NKWE Platinum SA (PTY) Limited and Realm Resources Limited.

2.3 Group Structure

2.3.1 As at the Last Practicable Date, Chrometco had four subsidiaries, being Rooderand Chrome

(Proprietary) Limited (74%), Chrometco Mining Services (Proprietary) Limited (100%), Korpo

Trust (Proprietary) Limited (100%) and Pilanesburg (Proprietary) Limited (76%). Post the

Transaction, Black Chrome and Palm Chrome will become subsidiaries of Chrometco.

Sail Minerals will be an associate.

3. OVERVIEW AND BUSINESS OF BLACK CHROME, PALM CHROME AND SAIL MINERALS

Shareholders are referred to paragraph 3 of the Circular for more information on the overview of Black

Chrome, Palm Chrome and Sail Minerals.

4. OVERVIEW OF THE COMBINED GROUP

Shareholders are referred to paragraph 2.7 of the Circular for more information on the overview of the

Group post the implementation of the Transaction.

5. PROSPECTS

Shareholders are referred to paragraph 5 of the Circular for more information on the prospects of the

Group post the implementation of the Transaction.

6. MANAGEMENT AND CORPORATE GOVERNANCE

6.1 Details and Experience of Directors

6.1.1 The full names, ages, capacities, business address and brief CV’s of the current Directors

of Chrometco are outlined below:

Jonathan Scott (62) South African

Qualifications: BSc (Hons), MBA

Business Address: Sparreboch Building, The Greens Office Park, Charles de

Gaulle Crescent, Highveld Park Ext 12

Function and Committees: Independent Non-executive Chairman, Chairman of the

Remuneration Committee and member of the Audit Committee

Date of Appointment: 21 August 2008

Background: Jonathan has many years of experience in mining, mining

finance, banking and corporate finance, and has served on

the boards of a number of JS-listed companies over the years.

Petrus Cilliers (52) South African

Qualifications: PrEng, BEng (ChemEng), MBA



Function and Committees: Chief Executive Officer

380

Date of Appointment: 21 August 2008

Background: Petrus is a chemical engineer with more than 20 years’

experience in the mining and metallurgical industry both as a

consultant and in a managerial capacity. He has been

involved in a wide variety of projects in territories including

South Africa, the DRC, Zambia, America, Australia and the

UK.

Namir Waisberg (35) South African

Qualifications: Actuary, CFA

Business Address: Unit 25, Sunninghill Office Park, Sunninghill, 2146

Function and Committees: Financial Director

Date of Appointment: 9 September 2016

Background: Namir has over 13 years of experience within risk and financial

management, mergers and acquisitions, and treasury and

capital raising. He has been an Executive Director and the

Chief Financial Officer of the Sail Group of companies, a

global Chrome trading and mine investment company, since

2014. Mr Waisberg has also served as a board member of the

FTSE/JSE Index Committee since 2006.

Edward Bramley (47) South African



Function and Committees: Independent Non-executive Director, member of the

Remuneration Committee

Date of Appointment: 24 November 2010

Background: Edward is an experienced mining and exploration professional

with international experience in business exploration and

management. Edward is a co-founder of the Chrometco

Group of companies and has had a long-standing association

with the Chrometco Group. Edward has a wealth of experience

in the limestone industry, and is also an experienced player in

the iron ore market. Edward has extensive experience in

minerals exploration and development in central and southern

Africa.

Ivan Collair (61) South African

Qualifications: BCom (Hons), BSC

Business Address: 20 Montague Road, Bergvliet, Cape Town, 7945

Function and Committees: Independent Non-executive Director, member of the audit

Committee and member of the Remuneration Committee

Date of Appointment: 24 February 2012

Background: Ivan joined the board in February 2012. Ivan has over 30 years

of business operations and governance experience in energy,

oil and gas plus mineral exploration. He worked for the Shell

Group for 34 years, and is currently an independent energy

consultant.

381

Richard Rossiter (58) Australian

Qualifications: BSc (Hons), Msc.

Business Address: Suite 4101, Level 41, 1 Macquarie Place, Sydney, NSW 2000,

Australia

Function and Committees: Independent Non-executive Director, Chairman of the Audit

Committee and member of the Remuneration Committee

Date of Appointment: 2 November 2012

Background: Richard began his career as a geologist in the South African

gold industry. He subsequently qualified in mine management

and held various production management and business

development roles. He then joined the financial sector as a

mining analyst and later was responsible for corporate

advisory, mergers, acquisitions, divestments and private

equity investments. He then set up a consultancy and is the

former non-executive Chairman of Sylvania Platinum Limited

and the current executive Chairman of Realm Resources

Limited (ASX listed). He holds a Bachelor of Science (Hons)

in Geology from the University of Natal and an MSc in Mineral

Exploration from Rhodes University in South Africa.

6.1.2 The full names, ages, business address, capacity and brief CV of the Director/s of Black

Chrome and Palm Chrome, which will become major subsidiaries of the Chrometco Group

are outlined below:

William Yang (34) South African

Qualifications: –

Business Address: Unit 25, Sunninghill Office Park, Sunninghill, 2146

Function: CEO

Date of Appointment: 18 June 2013

Background: William Yang is a Chinese-born South African entrepreneur

who is the founder and CEO of Sail Group, a global Chrome

trading and mine investment company. Prior to Sail Group,

William ran a string of successful businesses within the

commercial goods trading, telecommunications and property

sectors. William has over 20 years of experience in commodity

trading and investments.

6.1.3 Except for R Rossiter being an Australian citizen, all of the current Directors are South

African citizens.

6.1.4 The Audit and Risk Committee has considered and satisfied itself of the appropriateness of

the expertise and experience of N Waisberg, the Financial Director.

6.1.5 Shareholders are referred to Appendix 2 for additional information regarding the Directors.

6.1.6 There will be no variation in the remuneration receivable by the Directors as a direct

consequence of the Transaction, other than the appointment of new Director to the Board

as set out in paragraph 6.4.1 below, being Mr N Waisberg who will receive an annual salary

of R600 000.

382

6.1.7 The Directors’ interests in Chrometco pursuant to the Transaction are as follows:

Beneficial Total Total

Director Direct Indirect Shares %

E Bramley 37 602 732 – 37 602 732 1.37

P Cilliers 550 000 – 550 000 0.02

Total 38 152 732 38 152 732 1.39

6.2 Directors’ service contracts

6.2.1 Chrometco has concluded formal service contracts with the Managing Director, P Cilliers

and the Financial Director, N Waisberg.

6.2.2 The salient details relating to Chrometco Directors’ service contracts are set out in

paragraph 6.4.

6.2.3 There are service contracts in place for the Directors of Black Chrome, Palm Chrome or Sail

Minerals.

6.3 Qualification, appointment, voting power, retirement, remuneration and borrowing powers of

Directors

6.3.1 The relevant provisions of the MOI relating to qualification, appointment, term of office,

voting powers, retirement, remuneration and borrowing powers of Directors are set out

in Appendix 1 of Annexure 22 of this Circular. The borrowing powers of the Directors of

Chrometco and its subsidiaries are unlimited and have not been exceeded by the Directors.

In terms of the Company’s MOI, no Director shall be appointed for life or for an indefinite

period.

6.3.2 The appointment of N Waisberg requires the approval of shareholders in General Meeting

in terms of the provisions of the Company’s MOI and the Act.

6.3.3 None of the current or Directors have:

6.3.3.1 been declared bankrupt, insolvent or have entered into any individual voluntary

compromising arrangements;

6.3.3.2 entered into any business rescue, receiverships, compulsory liquidations, creditors

voluntary liquidations, administrations, company voluntary arrangements or any

compromise or arrangement with creditors generally or any class of creditors

of any company where such Directors are or were Directors with an executive

function during the preceding 12 months;

6.3.3.3 entered into any compulsory liquidations, administrations or partnership voluntary

arrangements of any partnerships where such Directors are or were partners

during the preceding 12 months;

6.3.3.4 entered into any receiverships of any asset(s) or of a partnership where such

Directors are or were partners during the preceding 12 months;

6.3.3.5 been publicly criticised by a statutory or regulatory authority, including recognised

professional bodies or disqualified by a court from acting as a Director of

a company or from acting in the management or conduct of the affairs of any

company;

6.3.3.6 been involved in any offence of dishonesty, fraud or embezzlement;

6.3.3.7 been removed from an office of trust, on the grounds of misconduct and involving

dishonesty; and/or

6.3.3.8 been declared by court order as delinquent or placing him under probation or

disqualifying him to act as a Director.

383

6.4 Directors’ emoluments and incentives

6.4.1 The annual remuneration of the Chrometco current Directors post the Transaction for the

year ended 29 February 2016 were:

R’000 Salary

Directors’

fees

Fees for

other

services

Travel and

subsistence

allowance Bonuses Total

Executive

Directors

P Cilliers 600 000 – – – – 600 000

N Waisberg8 – – – – – –

M Scott6 250 000 – – – – –

TW Scott7 230 000 – – – – 230 000

Non-executive

Directors

J Scott – 48 000 – – – 48 000

E Bramley – 48 000 – – – 48 000

I Collair – 48 000 – – – 48 000

R Rossiter – 48 000 – – – 48 000

TOTAL 1 080 000 192 000 – – – 1 272 000

Notes

1. The Directors have not received any sums by way of a medical aid or provident fund or pension scheme

allowance.

2. The Directors have received no other material benefits.

3. Chrometco has no commission, gain or profit-sharing arrangements with any Directors.

4. Chrometco has not granted any share options to Directors, which have been accepted by Directors, as at the

Last Practicable Date.

5. Chrometco has not issued any Shares to the Directors in terms of a incentive scheme.

6. Resigned on 1 December 2015.

7. Resigned on 26 June 2015.

8. Appointed 6 September 2016.

6.4.2 Chrometco has not paid any other fees or incurred any fees that are payable to a third party

in lieu of Directors’ fees.

6.4.3 Save for N Waisberg who will receive an annual salary of R600 000, there will be no variations

in the estimated remuneration receivable by the Directors as a direct consequence of the

Transaction.

6.4.4 Chrometco, GSE, Palm Chrome, Black Chrome and Sail Minerals have within three years

preceding the Circular, not paid any amounts (whether in cash or in securities), nor

given any benefits to any Directors or to any company in which Directors are beneficially

interested, directly or indirectly or to any partnership, syndicate or other association of

which the Directors are members, or to any Director as an inducement to become a Director

or otherwise, or for services rendered by Directors, or otherwise for services rendered by

Directors or by the associate company or associate entity in connection with the promotion

or formation of the company.

6.4.5 The business of Chrometco, Black Chrome or Palm Chrome, or any part thereof, is not

managed, or proposed to be managed, by any third party under contract or arrangement,

other than Black Chrome which will be managed by Chrometco Mining Services to manage

Black Chrome in terms of paragraph 4.1.1 of this Circular, which company will remain a

subsidiary of Chrometco.

6.5 Directors’ interests

6.5.1 The Directors (and their associates), in aggregate, directly and indirectly hold approximately

1.4% of Chrometco’s ordinary shares at the Last Practicable Date. The full particulars of

their holdings are presented in paragraph 11 of the Circular.

384

6.5.2 Save for as disclosed in 11.2.3 of the Circular, no current Director, has or had any interest,

directly or indirectly, in any transaction which is, or was, material to the business of

Chrometco and which was effected by Chrometco during the current financial year or in

any previous financial year which remains in any respect outstanding or unperformed.

6.5.3 Save for as disclosed in 11.2.3 of the Circular no current Director has had any material

beneficial interest, either direct or indirect, in the promotion of the Company.

6.5.4 Save for as disclosed in 11.2.3 of the Circular no Director has had any material beneficial

interest, either direct or indirect, in any property acquired or to be acquired by Chrometco.

6.6 Details of other directorships

6.6.1 Details of other directorships held by the Directors are contained in Appendix 2 to

Annexure 22 of this Circular.

6.7 Directors’ responsibility statement

6.7.1 The Directors of Chrometco, whose names are given in the Corporate Information section

of this Circular, collectively and individually accept full responsibility for the accuracy of

the information given and certify that to the best of their knowledge and belief there are

no facts that have been omitted which would make any statement false or misleading, and

that all reasonable enquiries to ascertain such facts have been made and that the Circular

contains all information required by law and the Listings Requirements.

6.8 Code of corporate practice and conduct

6.8.1 Chrometco Group and its Directors are committed to the principles of effective corporate

governance and application of the highest ethical standards in the conduct of its business

and affairs.

6.8.2 Details of Chrometco Group’s code of corporate practice and conduct are set out in

Appendix 3 to Annexure 22 of the Circular.

7. CAPITAL STRUCTURE

7.1 Share capital

7.1.1 The share capital of Chrometco before the Transaction is set out below:

R’000

Authorised

Stated capital of 10 000 000 000 Ordinary Shares of no par value –

Issued

Stated capital of 274 928 683 Ordinary Shares of no par value 158 062

As at the Last Practicable Date, The Company does not have any treasury shares nor any

treasury shares in issue. Save for the ordinary shares noted above, no other classes of

shares are listed on the JSE.

7.1.2 The share capital of Chrometco after the Transaction is set out below:

R’000

Authorised

Stated capital of 10 000 000 Ordinary Shares of no par value –

Issued

Stated capital of 2 742 428 683 Ordinary Shares of no par value 163 062

7.1.3 The rights attaching to each of the Shares are set out in Appendix 1 to Annexure 22 which

rights include, inter alia, preferential conversion and/or exchange rights, voting rights,

variation of rights, redemption rights, conversion of rights and preferential entitlements to

distributions in the ordinary course and on winding up for Shareholders.

385

7.1.4 Any variation in rights attaching to the Shares will require the consent of Shareholders in a

General Meeting in accordance with the Company’s MOI.

7.1.5 The authorised but unissued capital of the company is currently under the control of the

Directors of the Company in terms of the Companies Act, subject to the JSE Listings

Requirements.

7.2 Alterations to share capital

7.2.1 Chrometco may alter its share capital, from time to time, by special resolution of its

shareholders.

7.2.2 Chrometco increased its authorised share capital from 1 billion Shares to 10 billion Shares

in October 2016. There have been no other alterations to the authorised share capital of the

Company since inception prior to the date of the Circular.

7.3 Issue of Shares

In the three years preceding this Circular, the Company has issued 70 million shares on

13 November 2015 in terms of a Circular sent to shareholders on 2 October 2012 at an issue price

of R0.11 per Share equally to Nkwe Platinum SA (PTY) Limited and Realm Resources Limited.

The Transaction will result in Chrometco acquiring the Black Chrome Shares, Palm Chrome

Shares and the Sail Mineral Shares from GSE in exchange for the issue of the Acquisition Shares.

In addition, Chrometco will issue the Specific Issue Shares in terms of the Specific Issue.

Save for the issues of securities set out above, Chrometco nor its major subsidiaries, including

Black Chrome and Palm Chrome have issued any shares or made any offers for the subscription of

shares in the preceding three years.

7.4 Repurchases, sub-divisions or consolidations

There have been no repurchases, sub-divisions or consolidations of Shares undertaken by

Chrometco, in the last three years prior to the Circular.

7.5 Unissued Shares

The unissued shares of Chrometco are placed under the control of the Directors in terms of the

Companies Act, subject to the JSE Listings Requirements.

7.6 Options and preferential rights in respect of Shares

There is no contract or arrangement, either actual or proposed, whereby any option or preferential

right of any kind has been or will be given to any person to subscribe for any shares in the Chrometco

and GSE or in their subsidiaries.

7.7 Other Listings

The Shares of the Company are not listed on any other stock exchange.

7.8 Major and controlling Shareholders and Shareholder spread

7.8.1 Shareholders who, as at the Last Practicable Date, beneficially held, directly or indirectly,

an interest of 5% or more of the Chrometco Shares currently in issue is presented in

paragraph 12.4.2 of the Circular.

7.8.2 The Shareholders, after the Transaction, who will beneficially hold, directly or indirectly, an

interest of 5% or more of the Chrometco Shares in issue is presented in paragraph 12.4.2

of the Circular.

7.8.3 There has been no change in the controlling shareholder, other than GSE becoming

the controlling shareholder on the conclusion of the Transaction, and trading objects of

Chrometco during the five years preceding the Circular.

7.8.4 Save for the controlling shareholder of Black Chrome changing from Sail Minerals to GSE on

20 July 2016, there has been no change in the controlling shareholder and trading objects

of Black Chrome, Palm Chrome or Sail Minerals during the five years preceding the Circular.

386

8. FINANCIAL INFORMATION

8.1 Dividend and Distribution Policy

8.1.1 Chrometco does not have a dividend policy with fixed dates on which entitlement to

dividends arises.

8.1.2 Any interest distributions remaining unclaimed for a period of three years from the declaration

date thereof may be forfeited by resolution of the Directors for the benefit of Chrometco.

8.1.3 There are no arrangements in terms of which future dividends are waived or agreed to be

waived.

8.2 Historical financial information and pro forma financial effects

8.2.1 Historical financial information of Black Chrome, Palm Chrome and Sail Minerals

8.2.1.1 The Historical Financial Information of Black Chrome for the financial period

ended 29 February 2016 is presented in Annexure 1 and is the responsibility of

the Directors. The Historical Financial Information of Black Chrome for the interim

period ended 31 August 2016 is presented in Annexure 3 and is the responsibility

of the Directors.

8.2.1.2 The independent reporting accountants’ reports on the Historical Financial

Information of Black Chrome appear in Annexures 2 and 4 to this Circular.

8.2.1.3 The consolidated Historical Financial Information of Palm Chrome for the financial

period ended 29 February 2016 is presented in Annexure 5 and is the responsibility

of the Directors. The Historical Financial Information of Palm Chrome for the interim

period ended 31 August 2016 is presented in Annexure 7 and is the responsibility

of the Directors


Information of Palm Chrome appear in Annexures 6 and 8 to this Circular.

8.2.1.5 The Historical Financial Information of Sail Minerals for the financial year ended

29 February 2016 is presented in Annexure 9 and is the responsibility of the

Directors. The Historical Financial Information of Sail Minerals for the interim period

ended 31 August 2016 is presented in Annexure 11 and is the responsibility of

the Directors.

8.2.1.6 The independent reporting accountants’ reports on Historical Financial Information

of Sail Minerals appear in Annexures 10 and 12 to this Circular.

8.2.1.7 The Historical Financial Information of UWR for the financial year ended 30 June

2015 and 30 June 2016 is presented in Annexure 13 and is the responsibility of

the Directors. The Historical Financial Information of UWR for the interim period

ended 31 December 2016 is presented in Annexure 15 and is the responsibility

of the Directors.


Information of UWR appear in Annexures 14 and 16 to this Circular.

8.2.2 Historical financial information of Chrometco

8.2.2.1 The Historical Financial Information of Chrometco for the financial years ended

28 February 2014, 28 February 2015 and 29 February 2016 and for the interim

period ended 31 August 2016 are the responsibility of the Directors and are

available on the Company’s website being www.chrometco.co.za.

8.2.3 Pro forma financial effects on Chrometco

8.2.3.1 The pro forma effects of the Transaction are provided in paragraph 9.5 of the

Circular and should be read in conjunction with the pro forma financial information

of Chrometco as set out in Annexure 17 of the Circular. The independent

reporting accountant’s report on the pro forma financial information appears at

Annexure 18 of the Circular.

387

8.2.4 Intercompany financial and other transactions

8.2.4.1 There are no inter-company financial or other transactions within the Chrometco

Group.

8.3 Material changes

8.3.1 There have been no material changes in the financial or trading position of Chrometco since

its results for the year ended 29 February 2016, other that the signing of the Agreements.

8.3.2 There have been no material changes in the financial or trading position of Palm Chrome or

Sail Minerals since their results for the respective interim periods ended 31 August 2016,

other than the acquisition of the Prospecting Right by Palm Chrome and the conclusion by

Sail Minerals of the Management Agreement.

8.3.3 Save for entering into the acquisition of UWR by Black Chrome there have been no material

changes in the financial or trading position of Black Chrome since its results for the year

ended 29 February 2016.

8.4 Material commitments, lease payments, contingent liabilities, borrowings and borrowing

powers

8.4.1 As at the Last Practicable Date, Chrometco had no material borrowings, other than the

Loan Facility, the details of which are set out in Appendix 5. The material borrowings of

Black Chrome, Palm Chrome or Sail Minerals as at the Last Practicable date are presented

in Appendix 6.

8.4.2 Save for as detailed in 8.4.4 below as at the Last Practicable Date, Palm Chrome or Sail

Minerals had no material commitments, lease payments, contingent liabilities.

8.4.3 As at the Last Practicable Date, Chrometco had the following material commitments:

8.4.3.1 The present value of the expected rehabilitation liability with the DMR was

measured as at 29 February 2016 was R4.63 million for the Rooderand mining

rights.

8.4.3.2 UWR and Black Chrome entered into the revised and restated senior debt loan

agreement with the IDC, wherein the existing IDC loan to UWR was restructured and

settlement terms renegotiated, further details thereof are set out in Annexure 13:

8.4.3.2.1 Black Chrome purchases R100 million of the existing IDC loan of

R376 million, payable on the Section 11 transfer date;

8.4.3.2.2 R66 216 694 of the existing IDC loan is capitalised to stated capital

of UWR;

8.4.3.2.3 R100 million of the loan is converted into non-convertible, non-voting,

non-cumulative preference shares in UWR, redeemable at the option

of the Company and bearing no interest. The preference shares have

no repayment terms and are redeemable at the option of UWR through

dividends;

8.4.3.2.4 The remaining balance of R110 million will bear interest at a rate linked

to prime, but only from the 25th month after the Section 11 consent

date, with an interest and capital moratorium for the first 24 months

thereafter. The capital portion of the facility is repayable thereafter in

four equal annual instalments of R34 772 000;

8.4.3.2.5 The loan is secured by the mining asset of UWR; and

8.4.3.2.6 no conversion rights apply.

8.4.4 As at the Last Practicable Date neither Chrometco, Palm Chrome nor Black Chrome had not

entered into any lease agreements.

8.4.5 Sail Minerals entered into a 36-month lease agreement commencing on 1 October 2016 at

a rental of R55 000 per month escalating at 10% per annum.

8.4.6 The borrowing powers of Chrometco, Black Chrome, Palm Chrome or Sail Minerals have

not been exceeded during the three years preceding the Last Practicable Date.

388

8.4.7 No exchange control or other restrictions have been imposed on Chrometco Black Chrome,

Palm Chrome or Sail Minerals borrowing powers since incorporation.

8.4.8 There are no material inter-company transactions or balances as at the Last Practicable

Date.

8.4.9 The drawn portion of the Loan Facility is the only outstanding loan capital, the repayment

thereof will be financed through profits earned by the enlarged company.

8.5 Material loans receivable

8.5.1 As at the Last Practicable Date, Chrometco, Black Chrome, Palm Chrome or Sail Minerals

had no material loans receivable.

8.5.2 Chrometco has not provided any security or made any loans to or for the benefit of any

Director, manager or associate of any Director or manager of Chrometco.

8.5.3 Black Chrome, Palm Chrome or Sail Minerals have not provided any security or made any

loans to or for the benefit of any Director, manager or associate of any Director or manager

of Black Chrome, Palm Chrome or Sail Minerals.

8.6 Adequacy of working capital

8.6.1 The Directors are of the opinion that the working capital available to the Chrometco Group,

both prior and subsequent to the Transaction, is adequate for the short-term requirements

of the Chrometco Group for a minimum period of 12 months from the date of issue of this

Circular.

9. ACQUISITIONS AND PROPERTIES ACQUIRED

9.1 In November 2012, Chrometco shareholders approved the acquisition from Nkwe Platinum SA

(PTY) Limited and Realm Resources Limited of the PGMs and base metals over the “remainder

portion” of Rooderand for a total consideration of 90 million Chrometco Shares. Phase 1 of the

acquisition, which saw Chrometco acquire all of the geological data, was completed in 2013 by

way of an issue of 20 million Shares. Phase 2 was completed in November 2015 by way of an issue

of 70 million Shares at R0.11 per Share.

9.2 Other than that set out in paragraph 9.1 above, no acquisitions of material assets nor properties

have been acquired by Chrometco during the 3 years preceding the date of the Circular.

9.3 No acquisitions of material assets nor properties have been acquired by Sail Minerals during the

three years preceding the Circular.

9.4 On 16 September 2015 Palm Chrome acquired the Prospecting Right from Batlhalerwa for a cash

consideration of R2.2 million. Batlhalerwa has not guaranteed the book debts or other assets.

The warrantees to the agreement are standard for an agreement of this nature. The agreement

does not preclude Batlhalerwa from carrying on business in competition with Palm Chrome. The

Prospecting Right will be transferred into the name of Palm Chrome upon approval of receipt of the

written consent required in terms of section 11 of the MPRDA from the Minister. The Palm Chrome

Agreement does not cater for any settlement of accrued tax to the vendor.

9.5 On 5 August 2016 Black Chrome acquired 64% of the shares and claims in UWR for a cash

consideration of R100 million, which it received from GSE, from the IDC which amount is due and

payable upon ministerial consent in terms of Section 11 of the MPRDA. IDC has not guaranteed

the book debts or other assets. The warrantees to the agreement are standard for an agreement of

this nature. The agreement does not preclude IDC from carrying on business in competition with

Black Chrome. The shares in UWR have not transferred into the name of Black Chrome. The Black

Chrome Agreement does not cater for any settlement of accrued tax to the vendor.

9.6 Save as set out above, no acquisitions of material assets nor properties have been acquired by

Black Chrome or Palm Chrome during the three years preceding the Circular.

389

10. DISPOSAL OF PROPERTIES

No material immovable properties and/or fixed assets have been disposed of by Chrometco, Black

Chrome, Palm Chrome or Sail Minerals in the three years preceding these Revised Listing Particulars as

at the Last Practicable Date.

11. ADDITIONAL INFORMATION

11.1 Secretarial and technical fees

No amounts have been incurred in terms of secretarial and technical fees within the three years

preceding this Circular, save for those set out in paragraph 12.5 of the Circular.

11.2 Directors’ and other interests

11.2.1 No amounts have been paid by the Company to the Directors within the three years

preceding this Circular, other than remuneration set out in paragraph 11.2 of the Circular.

11.2.2 Save as being a Shareholder, no Director has had any material beneficial interest, either

direct or indirect, in any property acquired or to be acquired by Chrometco.

11.2.3 No commission, placement fee, discount, brokerage other special terms has been paid

or granted by Chrometco, Black Chrome, Palm Chrome or Sail Minerals in respect of

any underwriting and issue or sale of Shares in Chrometco in the three years preceding

the Circular.

11.3 Material contracts

11.3.1 No material contracts, being contracts entered into otherwise than in the ordinary course

of business that contain an obligation or settlement that is material to Chrometco, Black

Chrome, Palm Chrome or Sail Minerals, have been entered into at any time preceding the

date of this Circular, save for the Agreements.

11.3.2 Chrometco is not subject to any royalty agreements.

11.4 Advisers’ consents

The parties referred to in the Corporate Information section on the inside front cover of this Circular

have consented in writing to act in the capacities stated and to their names being stated in the

Circular and, in the case of the Independent Reporting Accountants, have consented to the

reference to their reports in the form and context in which they appear, and have not withdrawn

their consents prior to the publication of the Circular.

11.5 Government protection and investment encouragement law

There is no government protection or investment encouragement law affecting the business of

Chrometco, Black Chrome, Palm Chrome or Sail Minerals.

11.6 Expenses and Listing fees

11.6.1 The estimated costs of preparing and distributing this Circular, including the Revised

Listing Particulars and all other annexures, holding the General Meeting and implementing

the Transaction, including the fees payable to professional advisors, are set out in

paragraph 14 of the Circular.

11.6.2 Chrometco has incurred no expenses in relation to the Transaction during the three years

preceding this Circular, save for the expenses set out in paragraph 14 of the Circular.

11.6.3 Black Chrome, Palm Chrome or Sail Minerals have incurred no preliminary expenses in

relation to the Transaction during the three years preceding this Circular.

390

11.7 Litigation

There are no legal or arbitration proceedings (including any such proceedings that are pending

or threatened) of which Chrometco is aware, which may have or have had a material effect on the

financial position of the Chrometco Group and on the financial position of Black Chrome, Palm

Chrome or Sail Minerals during the previous 12 months.

11.8 Documents Available For Inspection

The documents available for inspection have been set out in paragraph 18 of the Circular.

SIGNED AT SANDTON ON 30 MAY 2017, BY PETRUS CILLIERS ON BEHALF OF ALL THE DIRECTORS

OF CHROMETCO IN TERMS OF POWERS OF ATTORNEYS SIGNED BY SUCH DIRECTORS

PETRUS CILLIERS

391

APPENDIX 1

EXTRACTS FROM THE MEMORANDUM OF INCORPORATION OF CHROMETCO

Extracts from the Memorandum of Incorporation of Chrometco are set out below. A copy of the complete

Memorandum of Incorporation is available for inspection at Chrometco’s registered office.

For the purpose of this Appendix 1 “Act” refers to the Companies Act, 2008 (Act 71 of 2008), as amended,

consolidated or re-enacted from time to time and includes all schedules to such Act and the Regulations.

A reference to a section by number refers to the corresponding section of the Act, notwithstanding the

renumbering of such section after the date on which the Company is incorporated. A reference to a clause by

number refers to a corresponding provision of the Memorandum of Incorporation.

6. ISSUE OF SHARES AND VARIATION OF RIGHTS

6.1 The Company is authorised to issue –

6.1.1 10 000 000 000 (ten billion) ordinary Shares of no par value, of the same class, each of

which ranks pari passu in respect of all rights and entitles the holder to –

6.1.1.1 vote on any matter to be decided by the Shareholders of the Company and to

1 (one) vote in the case of a vote by means of a poll;

6.1.1.2 participate proportionally in any distribution made by the Company; and

6.1.1.3 receive proportionally the net assets of the Company upon its liquidation;

6.1.2 such number of each of such further classes of Shares, if any, as are set out in

Schedule 1 hereto subject to the preferences, rights, limitations and other terms associated

with each such class set out therein.

6.2 The Board shall not have the power to –

6.2.1 create Shares of any class;

6.2.2 convert 1 (one) class of Shares into 1 (one) or more other classes;

6.2.3 change the name of the Company;

6.2.4 increase or decrease the number of authorised Shares of any class of the Company’s

Shares; or

6.2.5 consolidate and reduce the number of the Company’s issued and authorised Shares of any

class;

6.2.6 subdivide its Shares of any class by increasing the number of its issued and authorised

Shares of that class without an increase of its capital;

6.2.7 reclassify any classified Shares that have been authorised but not issued; or

6.2.8 classify any unclassified Shares that have been authorised but not issued; or

6.2.9 determine the preferences, rights, limitations or other terms of any Shares,

and such powers shall only be capable of being exercised by the Shareholders by way of

a special resolution of the Shareholders.

6.3 Each Share issued by the Company has associated with it an irrevocable right of the Shareholder

to vote on any proposal to amend the preferences, rights, limitations and other terms associated

with that Share as contemplated in clause 22.2.

6.4 In addition, and without prejudice to, the provisions of clause 6.2, the numbers of authorised Shares

of each class, and the preferences, rights, limitations and other terms associated with each class

of Shares as set out in this Memorandum of Incorporation may be changed only by an amendment

of this Memorandum of Incorporation by special resolution of the Shareholders and in accordance

392

with the JSE Listings Requirements, and such amendments shall not be implemented without a

special resolution adopted by the holders of Shares of that class at a separate meeting.

6.5 No Shares may be authorised in respect of which the preferences, rights, limitations or any other

terms of any class of Shares may be varied in response to any objectively ascertainable external

fact or facts as provided for in sections 37(6) and 37(7).

6.6 The Company may only issue Shares which are fully paid up and freely transferable and only within

the classes and to the extent that those Shares have been authorised by or in terms of this

Memorandum of Incorporation.

6.7 The Board may, subject to clause 6.11 and the further provisions of this clause 6.7, resolve to issue

Shares of the Company at any time, but only –

6.7.1 within the classes and to the extent that those Shares have been authorised by or in terms

of this Memorandum of Incorporation; and

6.7.2 to the extent that such issue has been approved by the Shareholders in General Meeting,

either by way of a general authority (which may be either conditional or unconditional) to

issue Shares in its discretion or a specific authority in respect of any particular issue of

Shares, provided that, if such approval is in the form of a general authority to the Directors,

it shall be valid only until the next Annual General Meeting of the Company and it may be

varied or revoked by any General Meeting of the Shareholders prior to such Annual General

Meeting.

6.8 All issues of Shares for cash and all issues of options and convertible securities granted or issued

for cash must, in addition, be in accordance with the JSE Listings Requirements.

6.9 All Securities of the Company for which a listing is sought on the JSE and all Securities of the same

class as Securities of the Company which are listed on the JSE must, notwithstanding the provisions

of section 40(5), but unless otherwise required by the Act, only be issued after the Company has

received the consideration approved by the Board for the issuance of such Securities.

6.10 Subject to what may be authorised by the Act, the JSE Listings Requirements and at meetings of

Shareholders in accordance with clause 6.12, and subject to clause 6.11, the Board may only issue

unissued Shares if such Shares have first been offered to existing ordinary Shareholders in

proportion to their shareholding on such terms and in accordance with such procedures as the

Board may determine, unless such Shares are issued for the acquisition of assets by the Company.

6.11 Notwithstanding the provisions of clauses 6.2, 6.10 and 6.12, any issue of Shares, Securities

convertible into Shares, or rights exercisable for Shares in a transaction, or a series of integrated

transactions shall, in accordance with the provisions of section 41(3), require the approval of the

Shareholders by special resolution if the voting power of the class of Shares that are issued or are

issuable as a result of the transaction or series of integrated transactions will be equal to or exceed

30% (thirty percent) of the voting power of all the Shares of that class held by Shareholders

immediately before that transaction or series of integrated transactions.

6.12 Notwithstanding the provisions of clause 6.10, the Shareholders may at a General Meeting authorise

the Directors to issue Shares of the Company at any time and/or grant options to subscribe for

Shares as the Directors in their discretion think fit, provided that such transaction(s) has/have been

approved by the JSE and comply with the JSE Listings Requirements.

6.13 Except to the extent that any such right is specifically included as one of the rights, preferences or

other terms upon which any class of Shares is issued or as may otherwise be provided in this

Memorandum of Incorporation, no Shareholder shall have any pre-emptive or other similar

preferential right to be offered or to subscribe for any additional Shares issued by the Company.

6.14 The Company may not issue any Shares unless those Shares are fully paid, notwithstanding the

provisions of section 40(5).

393

BORROWING POWERS

31.1 Subject to the provisions of clause 31.2 the other provisions of this Memorandum of Incorporation,

the Directors may from time to time –

31.1.1 borrow for the purposes of the Company such sums as they think fit; and

31.1.2 secure the payment or repayment of any such sums, or any other sum, as they think fit,

whether by the creation and issue of Securities, mortgage or charge upon all or any of the

property or assets of the Company.

31.2 The Directors shall procure (but as regards subsidiaries of the Company only insofar as by the

exercise of voting and other rights or powers of control exercisable by the Company they can so

procure) that the aggregate principal amount at any one time outstanding in respect of moneys so

borrowed or raised by –

31.2.1 the Company; and

31.2.2 all the subsidiaries for the time being of the Company (excluding moneys borrowed or

raised by any of such companies from any other of such companies but including the

principal amount secured by any outstanding guarantees or suretyships given by the

Company or any of its subsidiaries for the time being for the indebtedness of any other

company or companies whatsoever and not already included in the aggregate amount of

the moneys so borrowed or raised),

31.3 shall not exceed the aggregate amount at that time authorised to be borrowed or secured by the

Company or the subsidiaries for the time being of the Company (as the case may be).

26. COMPOSITION AND POWERS OF THE BOARD OF DIRECTORS

26.1 Number of Directors

26.1.1 In addition to the minimum number of Directors, if any, that the Company must have to

satisfy any requirement in terms of the Act to appoint an Audit Committee and a Social and

Ethics Committee, the Board must comprise at least 4 (four) Directors and the Shareholders

shall be entitled, by ordinary resolution, to determine such maximum number of Directors

as they from time to time shall consider appropriate.

26.1.2 All Directors shall be elected by an ordinary resolution of the Shareholders at a general or

Annual General Meeting of the Company and no appointment of a Director in accordance

with a resolution passed in terms of section 60 shall be competent.

26.1.3 Every person holding office as a Director, prescribed officer, company secretary or auditor

of the Company immediately before the effective date of the Act will, as contemplated in

item 7(1) of Schedule 5 to the Act, continue to hold that office.

26.2 Election of Directors

26.2.1 In any election of Directors –

26.2.1.1 the election is to be conducted as a series of votes, each of which is on the

candidacy of a single individual to fill a single vacancy, with the series of votes

continuing until all vacancies on the Board have been filled; and

26.2.1.2 in each vote to fill a vacancy –

26.2.1.2.1 each vote entitled to be exercised may be exercised once; and

26.2.1.2.2 the vacancy is filled only if a majority of the votes exercised support

the candidate.

26.2.2 The Company shall only have elected Directors and there shall be no appointed or ex offıcio

Directors as contemplated in section 66(4).

394

ELIGIBILITY, RESIGNATION AND ROTATION OF DIRECTORS

26.3.1 Apart from satisfying the qualification and eligibility requirements set out in section 69,

a person need not satisfy any eligibility requirements or qualifications to become or remain

a Director or a prescribed officer of the Company.

26.3.2 No Director shall be appointed for life or for an indefinite period and the Directors shall

rotate in accordance with the following provisions of this clause 26.3.2 –

26.3.2.1 at each Annual General Meeting referred to in clause 20.2.1, 1/3 (one third) of the

Directors for the time being, or if their number is not 3 (three) or a multiple of

3 (three), the number nearest to 1/3 (one third), but not less than 1/3rd 1/3 (one

third), shall retire from office, provided that if a Director is appointed as managing

Director or as an employee of the Company in any other capacity, he or she shall

not, while he or she continues to hold that position or office, be subject to retirement

by rotation and he or she shall not, in such case, be taken into account in

determining the rotation or retirement of Directors;

26.3.2.2 the Directors to retire in every year shall be those who have been longest in office

since their last election, but as between persons who were elected as Directors

on the same day, those to retire shall, unless they otherwise agree among

themselves, be determined by lot;

26.3.2.3 a retiring Director shall be eligible for re-election;

26.3.2.4 the Company, at the General Meeting at which a Director retires in the above

manner, or at any other General Meeting, may fill the vacancy by electing a person

thereto, provided that the Company shall not be entitled to fill the vacancy by

means of a resolution passed in accordance with clause 25;

26.3.2.5 if at any meeting at which an election of Directors ought to take place the offices

of the retiring Directors are not filled, unless it is expressly resolved not to fill such

vacancies, the meeting shall stand adjourned and the further provisions of this

Memorandum of Incorporation, including clauses 20.4.2 to 20.4.5 (inclusive) will

apply mutatis mutandis to such adjournment, and if at such adjourned meeting

the vacancies are not filled, the retiring Directors, or such of them as have not had

their offices filled, shall be deemed to have been re-elected at such adjourned

meeting.

26.3.3 The Board shall, through its Nomination Committee if such committee has been constituted

in terms of clause 32, provide the Shareholders with a recommendation in the notice of the

meeting at which the re-election of a retiring Director is proposed, as to which retiring

Directors are eligible for re-election, taking into account that Director’s past performance

and contribution.

395

APPENDIX 2

OTHER DIRECTORSHIPS HELD BY DIRECTORS OF CHROMETCO

The companies and partnerships to which the Directors have been a Director or partner at any time in the

previous five years are set out in the table below.

Director Directorships/Memberships Registration Number

Executive

Petrus Cilliers Chrometco Mining Services 2011/136984/07

Banonamix 2015/319117/07

Rooderand Chrome 1978/004288/07

Korpo Trust 1988/004957/07

Pilanesberg Mining Co 1996/010642/07

Chrometco 2002/026265/06

Namir Waisberg Optomise Global 2011/112778/07

RNN Financial Control 2012/007066/07

Urban Steyn* 2013/143525/07

Namir Capital Investments 2014/049502/07

SRN Group 2014/073180/07

14A 5th Street Wynberg 2014/096426/07

Black Chrome Holdings 2015/017156/07

Palm Chrome Holdings 2015/413165/07

Track and Trade 2016/082838/07

Optomise Vcc 2016/202945/07

Erf 1507 Morningside Ext 176 Homeowners Association (RF) 2000/021057/08

Meso Capital 2005/036723/07

Torero Investments 22 2006/022717/07

Namir Target Capital 2006/023057/07

Pizzazz Investments 1 2006/030088/07

Pizzazz Investments 2* 2006/030189/07

Pizzazz Investments 4* 2006/031926/07

Namlev Investments* 2007/005993/07

Giant Hedge Capital 2007/006042/07

Eta Human Capital 2009/015729/07

Elgawell 2010/017745/07

Non-executive

Jonathan Scott Chrometco Limited 2002/026265/06

Limehaus (Pty) Limited 2012/015927/07

Bartoway (Pty) Limited 2012/2032832/07

Claujun Investments (Pty) Limited 1996/014873/07

Lycaon Consulting (Pty) Limited 2000/006886/07

Lycaon Investments (Pty) Limited 2000/008655/07

PT Investments (Pty) Limited 2003/005968/07

Lime-Chem Resources (Pty) Limited 2005/012248/07

Lime-Chem Minerals (Pty) Limited 2005/012248/07

Squirewood Investments 54 (Pty) Limited 2006/014269/07

Hollyberry Props 83 (Pty) Limited 2006/024627/07

8 Mile Investmens 562 (Pty) Limited 2009/014920/07

396

Director Directorships/Memberships Registration Number

Edward Bramley Limehaus 2012/015927/07

Golo Mining 2015/435656/07

Feza Management Services 2015/443527/07

Lime-Chem 1995/007658/07

Chrometco 2002/026265/06

Audax Resources 2005/011645/07

Lime-Chem Resources 2005/012219/07

Lime-Chem Minerals 2005/012248/07

8 Mile Investments 562 2009/014970/07

Enantiplex 2010/002805/07

Richard Rossiter Realm Resources Limited* ABN 98 008 124 025

Chrometco Limited 2002/026265/06

PT Katinga Ria 010-KR-KTN/VI-2011

Falcon Mining Services Pty Ltd ACN 126 653 389

Ivan Collair Chrometco Limited 2002/026265/06

* previous directorships

397

APPENDIX 3

CORPORATE GOVERNANCE STATEMENT

The Board, in its capacity as custodian of the Company’s corporate governance, is committed to upholding

the principles of responsibility, accountability, fairness and transparency enunciated in the King Code.

In accordance with the Listings Requirements for AltX-listed companies, Chrometco has applied the principles

set out in Chapter 2 of the King Code (Role and Function of the Board) as set out in the table below.

Principle Role and function of the Board Statement addressing the extent of the application

Principle 2.1 The Board should act as the focal

point for and custodian of corporate

governance.

The Board fully subscribes to this principal. The board

meets at least four times a year and clear objectives

and guidelines are set by the board, to ensure

appropriate controls and corporate governance.

Principle 2.2 The Board should appreciate that

strategy, risk, performance and

sustainability are inseparable.

The Board considers all four of these principals

regularly. The Risk Committee compiles a risk register

that is regularly updated, upon a chance in

circumstances or post an Audit Committee meeting.

Strategy is reviewed regularly and adjusted to match

the macro environment.

Performance of the company, the board and the

individual board members are reviewed at least once

a year.

Sustainability is a key aspect and is reviewed once a

year, with the annual report, or more regularly,

if required.

Principle 2.3 The Board should provide effective

leadership based on an ethical

foundation.

The Board subscribes to this principal.

Principle 2.4 The Board should ensure that the

Company is and is seen to be a

responsible corporate citizen.

The Board subscribes to this principal.


Company’s ethics are managed

effectively.

The board appointed a Social and Ethics Committee

that meets once a year. The committee sets guidelines

and principals, which gets reviewed.


Company has an effective and

independent Audit Committee.

The Audit Committee is chaired by an independent

non-Executive Director, and comprises four

non-Executive Directors of which three are

independent.

Principle 2.7 The Board should be responsible

for the governance of risk.

The Risk Committee has been tasked with this function.

Principle 2.8 The Board should be responsible

for information technology (IT)

governance.

The Board is cognisant of IT risks, but currently due to

the nature of the business, IT risks are considered to

be low.


Company complies with applicable

laws and considers adherence to

non-binding rules, codes and

standards.

The Board complies with this principal and takes

regular legal advice to ensure that it fully complies with

the codes and standards which applies to the

environment it functions in.

398


Principle 2.10 The Board should ensure that there

is an effective risk-based internal

audit.

This has not been required due to the absence of

significant economic activity currently, but all

reasonable controls are is place, like multi-level

payment authorization.

Principle 2.11 The Board should appreciate that

stakeholders’ perceptions affect the

Company’s reputation.

The Board complies with this principal. The company

communicates regularly with the stakeholders by

means of announcements and presentations, as well

as meetings with the community stakeholders.

Principle 2.12 The Board should ensure the

integrity of the Company’s

integrated report.


employs independent auditors and other consultants

to assist in this process.

Principle 2.13 The Board should report on the

effectiveness of the Company’s

system of internal controls.


is quite small and the internal controls are very simple,

hence it is not extensively reported on.

Principle 2.14 The Board and its Directors should

act in the best interests of the

Company.

The Board complies with this principal and the

individual directors are fully aware of their duties and

responsibilities as Directors.

Principle 2.15 The Board should consider

business rescue proceedings or

other turnaround mechanisms as

soon as the Company is financially

distressed as defined in the Act.

The Board is cognisant of this principal and will take

the required action, should it be required.

Principle 2.16 The Board should elect a Chairman

of the Board who is an independent

non-executive Director. The

managing Director of the Company

should not also fulfill the role of

Chairman of the Board.

The Board is cognisant of this principal. The Chairman

of the Board is an independent non-executive and the

role of the manging Director is separated from that of

the Chairman.

Principle 2.17 The Board should appoint the

managing Director and establish a

framework for the delegation of

authority.

The Board is cognisant of this principal. This is

assessed by the board on a regular basis.

Principle 2.18 The Board should compromise a

balance of power, with a majority of

non-executive Directors. The

majority of non-executive Directors

should be independent.

The Board consist of five members, four of whom are

non-executive. Of the non-executives, three are

independent.

Principle 2. Directors must be appointed

through a formal process.

Directors are appointed via the Remuneration and

Nominations Committee.

Principle 2.20 The induction of and ongoing

training and development of

Directors should be conducted

through formal processes.

The Board complies with this principal. New Directors

attend the IOD (SA) Directors induction course.

Principle 2.21 The Board should be assisted by a

competent, suitable qualified and

experienced Company Secretary.

The Board complies with this principal.

Principle 2.22 The evaluation of the Board, it’s

Committees and the individual

Directors should be performed

every year.

The Board complies with this principal and an annual

review is conducted and coordinated by the company

secretary.

399


Principle 2.23 The Board should delegate certain

functions to well-structured

Committees but without abdicating

its own responsibilities. The Board

complies with this principal. New

Directors attend the IOD (SA)

Directors induction course.

The Board has set up relevant Committees, but

accepts ultimate responsibility.

Principle 2.24 A governance framework should be

agreed between the Group and its

subsidiary Boards.

This is not applicable as the Group currently does not

have any trading subsidiaries.

Principle 2.25 Companies should remunerate

Directors and executives fairly and

responsibly.

The Group complies with this principal.

Principle 2.26 Companies should disclose the

remuneration of each individual

Director and certain senior

executives.

The Group discloses this information in its Integrated

Annual Report.

Principle 2.27 Shareholders should approve the

Company’s remuneration policy.

This is complied with at the Annual General Meeting.

400

APPENDIX 4

SHARE TRADING HISTORY OF CHROMETCO

The high, low and closing prices of the ordinary shares on the JSE, and the volumes and value traded,

monthly from June 2016 to May 2017 and for each trading day from 4 April 2017 (30 business days)] 2015 to

the Last Practicable Date, were as follows:

Date

High

(cents)

Low

(cents)

Value

(R)

Volume

(shares)

Monthly

2017/05/31 27 26 66 755 253 120

2017/04/30 30 – 187 716 693 928

2017/03/31 31 – 340 603 1 190 682

2017/02/28 36 – 2 595 480 8 958 527

2017/01/31 45 – 512 831 1 405 840

2016/12/31 39 – 618 807 1 658 221

2016/11/30 40 – 864 508 2 521 471

2016/10/31 32 25 732 092 2 541 114

2016/09/30 32 15 1 210 703 5 254 787

2016/08/31 19 – 268 677 1 926 582

2016/07/31 15 – 342 689 3 578 201

2016/06/30 10 – 500 178 5 590 096

Daily

2017/05/18 28 28 19 600 70 000

2017/05/17 28 28 43 204 154 302

2017/05/16 26 26 7 141 27 469

2017/05/15 – – – –

2017/05/12 – – – –

2017/05/11 28 28 675 2 413

2017/05/10 26 26 768 2 957

2017/05/09 26 26 2 150 8 272

2017/05/08 27 27 2 700 10 000

2017/05/05 26 26 13 000 50 000

2017/05/04 27 26 25 355 97 130

2017/05/03 27 27 8 100 30 000

2017/05/02 27 26 14 682 54 761

2017/04/28 28 28 6 570 23 467

2017/04/26 28 26 58 613 216 533

2017/04/25 – – – –

2017/04/24 – – – –

2017/04/21 28 26 50 467 191 790

2017/04/20 29 25 1 910 7 000

2017/04/19 29 29 3 932 13 562

2017/04/18 26 26 14 692 56 510

2017/04/13 30 26 5 003 18 625

2017/04/12 28 28 6 263 22 370

2017/04/11 – – – –

2017/04/10 26 26 26 2 900

2017/04/07 26 26 26 37 858

2017/04/06 29 28 28 45 040

2017/04/05 26 26 26 13 750

2017/04/04 30 30 30 42 523

401

APPENDIX 5

REPORT OF THE CHROMETCO INDEPENDENT PROFESSIONAL EXPERT

Chrometco Ltd.

Competent Persons’ Report On the Rooderand Project

In the North West Province South Africa

Prepared for: Chrometco Ltd.

Prepared by:


Project Reference Number IRES 1CH100202

Competent Persons’ Report On the Rooderand Project

In the North West Province South Africa

Chrometco Ltd.


IRES Project Number 1CH100202

Effective Date 3 May 2017

AuthorDexter S. Ferreira

SYNOPSIS

Purpose of the Competent Person’s Report and Nature of the Transaction

Terms of Reference

Property Name Nomenclature

Executive Summary Figure

Project Outline

Historical Ownership and Exploration Activities

Owner Period Right Property Activity Commodity Reefs


Legal Aspects and Tenure

Legal Tenure for Rooderand 46JQ RE and RE/Ptn2 Farm/Ptn Area

(Ha)Type Of

Right Reference

No.Holder Of

Right Grant Date

Expiry Date Mineral Comments

Geological Setting

Exploration Programs

NRD’s 24 and 18

Chromite Mineral Resource Estimate

Glo

bal M

iner

al R

esou

rce

Estim

ate

for t

he R

oode

rand

Pro

ject

(For

RE

and

RE/

Ptn2

) - IR

ES M

ay 2

017

Sour

ceM

iner

alR

esou

rce

Cat

egor

y R

eef

Ave

rage

SG

A

vera

ge

True

thic

knes

s (m

)

Tonn

age

(Mt)

Gra

deC

r 2O

3 (%

) C

r 2O

3co

nten

t(t)

Cr:

Fe

Tota

l Ind

icat

ed M

iner

al R

esou

rces

8.

6738

.88

3.37

TOTA

L 45

.84

36.8

016

.86

Min

eral

Res

ourc

es fo

r Roo

dera

nd P

roje

ct E

xclu

ding

Nar

row

Ree

fs (F

or R

e an

d R

E/Pt

n2) -

IRES

May

201

7

Sour

ceM

iner

al R

esou

rce

Cat

egor

y R

eef

Ave

rage

SG

A

vera

ge

True

thic

knes

s (m

)

Tonn

age

(Mt)

Gra

deC

r 2O

3 (%

) C

r 2O

3co

nten

t(t)

Cr:

Fe

Tota

l Ind

icat

ed M

iner

al R

esou

rces

8.

6738

.88

3.37

Tota

l Inf

erre

d M

iner

al R

esou

rces

TOTA

L

36.3

036

.80

13.5

1

PGE Mineral Resource Estimate

Exploration Target on Rooderand 46JQ RE Only REEF APPROXIMATE

TONNAGES (Mt) APPROXIMATE GRADE

4E(g/t) APPROXIMATE 4E

CONTENTS (oz)

TOTAL 29.00 34.60 4.00 3.00 3.70

Mineral Reserves

Risk Analysis

Key Environmental Aspects, Social and Governmental Parameters

Exploration Budget

Exploration and Technical Study Indicative Budget Exploration Or Technical Study Potential Cost

(Zarm)

TOTAL 3.9

Valuation

ZAR177.0m ZAR355.0m ZAR258.0m


ZAR222.0m ZAR469.0mZAR334.5m.

Concluding Opinion of Value In-Situ Values Project Values

Resource Category Resources (tonne)/(oz)

Lower Value

(ZAR/unit)

Upper Value

(ZAR/unit) Preferred (ZAR/unit)

Lower Value

(ZARm)

Upper Value

(ZARm) Preferred (ZARm)

19.10 258.00 22.50 76.50

Total 222.00 469.00 334.50

Interpretation and Conclusions

Statement

Capacity and Independence

Scope of Work/Materiality/Limitations and Exclusions

Copyright

Table of Contents

List of Tables

List of Figures

List of Appendices

1 Introduction 1.1 Nature of the Transaction

1.2 Purpose of the CPR

1.3 Scope of the Report and Scope of Work

1.4 Terms of Reference

1.4.1 Property name nomenclature

1.4.2 Units of currency

2 Statement of Independence

3 Competent Persons’ Declaration and Qualifications

4 Reliance on Experts

Table 1: Sources of Information and Reliance on Other Experts Consultant Company Type Of

Document Date Study

Consultant Company Type Of Document Date Study

5 Sources of Information

6 Personal Inspection

7 Chrometco Corporate Structure

8 Project Outline – Property Description

Figure 1: Chrometco Corporate Structure

9 Project Outline – Property Location, Access and Infrastructure

Figure 2: Regional Locality and Infrastructure of the Western Limb of the Bushveld Complex

Figure 3: Satellite Image of the Rooderand Project Area

Figure 4: Proposed Heritage Park

10 Project Outline - Physiography

11 Project Outline – Country Profile 11.1 Political and economic climate

11.2 Minerals industry

11.3 Minerals policy and legislative framework

12 Project Outline – Regional and Adjacent Properties 12.1 Regional Neighbors

12.2 Adjacent properties

13 Project Outline – History of Ownership and Exploration Activities

Table 2: History of the Rooderand Project - Ownership and Exploration Owner Period Right Property Activity Commodity Reefs


13.1 Chromite summary

Figure 5: Adjacent Properties to the Rooderand Project

13.2 PGE summary

14 History – Historical Mineral Resource Estimates

14.1 2004 – RE PGE Mineral Resource

14.2 2005 – RE/Ptn2

Table 3: Exploration Target chromite 2005 RE/Ptn2

Unit Dip SG Width (Cm)

Volume(M3)

Tonnes (With 15% Losses)

Cr2O3Content (Tonnes)

Total 16,160,000* 55,380,000* 25,190,000*

15 Legal Tenure and Permitting 15.1 Legal Aspects and tenure

Figure 6: Topocadastral Map and Legal Tenure of the Rooderand Project

Table 4: Mineral tenure for Rooderand 46JQ Re and RE/Ptn2 Farm/Ptn Area

(Ha)Type Of

Right Reference

No.Holder Of

Right Grant Date

Expiry Date Mineral Comments

15.2 Material agreements

15.3 Permitting

Table 5: Summary of the 2013 Mine Works Program PARAMETER UNITS METRIC 2013

15.4 Royalties

15.5 Liabilities

16 Geological Setting, Deposit and Mineralization 16.1 Regional Geology

Figure 7: Regional Geological Setting of the Rooderand Project

Table 6: Stratigraphic Zones of the Rustenburg Layered Suite Unit Thickness Dominant Lithology Description

Upper Zone

Main Zone

Upper Critical Zone (“UCZ”)

Lower Critical Zone (“LCZ”)

Lower Zone

MarginalZone

16.2 Project Geology

16.2.1 Regional structure

Figure 8: Local Geology of the Rooderand Project

16.2.2 Local Structure

16.3 Deposit Type

Figure 9: Regional Structure and Aeromagnetic of the Rooderand Project Area

16.4 Mineralization

Figure 10: Nature of the PGE Mineralization and Stratigraphy on Rooderand 46JQ

16.4.1 The Merensky Reef

16.4.2 Pseudo Reef

16.4.3 UG2 Reef

17 Exploration – Geophysical Characterization

17.1 Depth of Weathering Study

17.2 Lineament and Dyke Study

Table 7: Summary of the Modeled Remnant Magnetic Dykes

Dyke Name

MagneticSusceptibility

(Cgs)

Thickness / Width

(M)Depth

(M)

Dip (Measured From The Earth

Surface / Horizontal)

18 Exploration – Drilling

18.1 Nkwe Platinum PGE Drilling Program On Rooderand 46JQ RE

Figure 11: Exploration Programs

Table 8: Nkwe Platinum PGE Drilling Program 2003 to 2004 SAMREC Table 1 Section

3.2Drilling Techniques Rooderand 46JQ RE - Nkwe diamond drillholes NRD1 to

NRD23 for PGE Mineral Resource Estimate -

Table 9: Nkwe Platinum PGE Drilling Program Drillhole Summary – 2003 to 2004

BHID From(m)

To(m) Unit

TrueThickness

(m)Comments

18.2 Chrometco Chromite Drilling Programs On Rooderand 46JQ RE And RE/Ptn2

Chrometco acquired the Rooderand 46JQ RE and RE/Ptn2 mining rights for chromite in early 2004 and when the company listed in August 2005 the intention was to undertake further exploration work on the Rooderand 46JQ portions RE and RE/Ptn2 with the ultimate aim of estimating a Mineral Resource for the chromitite reefs known to exist on the properties, namely the LG5, LG6 and MG4 Reefs. Previous open pit mining by TLC and small scale underground mining by Anglo American Limited had confirmed the presence of the chromitite reefs in the north of RE and RE/Ptn2. Chrometco drilled 2 diamond drillholes SDR1 and SDR2 located on RE/Ptn2 as shown on Figure 11. A 24 drillhole percussion drilling program was also undertaken as shown in

Table 10: Chrometco Chromite Drilling Programs 2004 to 2005 SAMREC Table 1 Section

3.2Drilling Techniques Rooderand 46JQ Re/Ptn2 - Chrometco Percussion

Drillholes RR1 To RR20 Rooderand 46JQ Re/Ptn2 -

Chrometco Diamond Drillholes SDR1 To SDR2

Table 11: Chrometco Chromite Drilling Program - Drillhole Summary – 2004 to 2005 Coordinates Hangingwall Elevation

Drillhole X Y Z

Chromitite Unit

Intersected Depth Below

Collar (M) Elevation

Above MSL

18.3 Chrometco/DCM Chromitite Drilling Program Over RE And RE/Ptn2

Table 12: Chrometco/DCM/Mineral Corporation Drilling Program 2008 SAMREC Table 1 Section

3.2Drilling Techniques

Rooderand 46JQ RE/Ptn2 - Chrometco/DCM/Mineral Corporation percussion

drillholes RND1 to RND23

SAMREC Table 1 Section

3.2Drilling Techniques

Rooderand 46JQ RE/Ptn2 - Chrometco/DCM/Mineral Corporation percussion

drillholes RND1 to RND23

Table 13: DCM – Rooderand 46JQ Remainder Portion 2 Drilling Drillhole

ID Start Date End date End depth (m)

Run Length(m)

Core length (m)

CoreRecovery

RND1RND2RND3RND4RND5

RND5A RND6

RND7A RND7BRND8RND9

RND10RND11RND12RND13RND14RND15RND16RND17RND18RND19RND20RND21RND22RND23Total 4431.18 4428.45 4131.08 93%

18.3.1 Anglo Platinum PGE Drilling Program over Rooderand 46JQ RE/Ptn2

18.3.2 International Ferrous Metals Program

Table 14: Anglo Platinum Drillholes Collar Coordinates

BHID X Y ZFROM

(m)TO(m)

3PGE+AU (g/t)

TrueThickness

(m)

ReefIntersected

19 Exploration – Sampling 19.1 PGE Exploration Program – Nkwe Platinum 2004 and 2016 – Rooderand 46JQ RE

Table 15: Sampling, Preparation, QA/QC, SG for Nkwe Platinum 2003 and 2016 PGE Program – Rooderand 46JQ RE

SAMREC Table 1

Section 3.3

Sampling Method, Collection, Capture And Storage

Rooderand Re - Nkwe Diamond Drillholes NRD1 To NRD23 PGE Mineral Resource Estimate

SAMREC Table 1

Section 3.3



3.4 Sample Preparation and Analysis

μ

3.5 Sampling Governance

3.6 Quality Control/Quality Assurance

3.7 Bulk Density

SAMREC Table 1

Section 3.3



3.8 Bulk Sampling and/or Trial Mining

19.2 Sampling Of Nkwe Platinum 2004 Core for Chrome (2016) - Rooderand 46JQ RE

Table 16: Sampling, Preparation, QA/QC and SG for Nkwe Platinum 2003 and 2016 Chrome Program Rooderand 46JQ RE

SAMREC Table 1

3.3Sampling Method, Collection, Capture And

StorageRooderand Re - Nkwe Diamond Drillholes NRD1 To

NRD23 Chrome Mineral Resource Estimate


μ


SAMREC Table 1

3.3Sampling Method, Collection, Capture And

StorageRooderand Re - Nkwe Diamond Drillholes NRD1 To

NRD23 Chrome Mineral Resource Estimate


3.7 Bulk Density


19.3 Sampling, Preparation QA/QC and SG for the Chrometco/DCM/Mineral Corporation 2008 Chromitite Campaign over Rooderand 46JQ RE and RE/Ptn2

Table 17: Sampling, Preparation, QA/QC and SG for the Chrometco/DMC/Mineral Corporation 2008 Chrome Campaign over Rooderand 46JQ RE and RE/Ptn2

SAMREC Table 1

3.3


Rooderand 46JQ Re And Re/Ptn2 - DCM/Mineral Corporation RND1 To RND23

° and 14°


SAMREC Table 1

3.3


Rooderand 46JQ Re And Re/Ptn2 - DCM/Mineral Corporation RND1 To RND23



3.7 Bulk Density


19.3.1 Sample Blanks

19.3.2 Certified Reference Material

Table 18: Certified Selected Analyses of SARM 72 Material Certified Average

Value % 95% Confidence

Interval Inter-Laboratory Standard

Deviation Number Of Analyses

covering drillholes RND1 to RND12

’

Table 19: Target Ranges for Internal Laboratory Standards Material Lower Value % Upper Value %

Standard STSD-4

Standard SARM 5

Standard SCH-1 Material Lower value % Upper value %

19.3.3 Pulp Duplicates

19.3.4 Duplicate Analysis

19.3.5 Laboratory Internal Duplicate Analyses

19.3.6 Overall QA/QC

19.4 Sampling, Preparation, QA/QC And SG For The Anglo Platinum PGE Campaign Over RE/Ptn2

Table 20: Sampling, Preparation, QA/QC and SG for the Anglo Platinum PGE Campaign Over RE/Ptn2

SAMREC Table 1

3.3

Sampling Method, Collection, Capture and Storage Rooderand 46JQ RE/Ptn2

SAMREC Table 1

3.3


° and 14°




3.7 Bulk Density

SAMREC Table 1

3.3



20 Bulk Density

Snowrex Precision Scale, Model NV/NHV

weight-in-air/weight-in-waterweight-in-air

20.1 Bulk-Sampling and/or Trial Mining

with an appointed subcontractor

21 Estimation and Reporting of Exploration Results and Mineral Resources 21.1 Geological And Structural Model And Interpretation - Chromitite

21.2 Volume Calculation - Chromitite

21.2.1 Determination of Individual Reef Thickness - Chromitite

Figure 12: Estimated Surface Projections of Mineralization and Structure

Figure 13: Mineral Resource Areas

Table 21: Average Reef Thickness for Rooderand - Chromitite

ReefAverage Chromitite

Main Reef Thickness (M)

Average Total Reef Thickness (M)

21.3 Chrome – Iron Ratios

21.4 Grade Estimation And Modelling - Chromitite

Table 22: Weighted Average Grades - Main Reefs - Chromitite

ReefAverage Weighted

Cr2O3Grade %

Average Weighted Fe2O3

Grade %

Average Weighted SiO2

Grade %

Table 23: Weighted Average Grades – Total Reef Package - Chromitite

ReefAverage Weighted

Cr2O3Grade %

Average Weighted Fe2O3

Grade %

Average Weighted SiO2

Grade %

22 Mineral Resource Modeling and Estimation - Chromitite

Tabl

e 24

: Glo

bal M

iner

al R

esou

rce

Estim

ate

for t

he R

oode

rand

Pro

ject

(RE

and

RE/

Ptn2

) - IR

ES M

ay 2

017

Sour

ceM

iner

alR

esou

rce

Cat

egor

y R

eef

Ave

rage

SG

A

vera

ge

True

Thic

knes

s (M

)

Tonn

age

(Mt)

Gra

deC

r 2O

3 (%

) C

r 2O

3C

onte

nt(T

)C

r:Fe

Tota

l Ind

icat

ed M

iner

al R

esou

rces

8.

6738

.88

3.37

Infe

rred

Open

pit

Infe

rred

TOTA

L 45

.84

36.8

016

.86

Tabl

e 25

: Min

eral

Res

ourc

es fo

r Roo

dera

nd P

roje

ct E

xclu

ding

Nar

row

Ree

fs (R

E an

d R

E/Pt

n2) -

IRES

May

201

7

Sour

ceM

iner

al R

esou

rce

Cat

egor

y R

eef

Ave

rage

SG

A

vera

ge

True

Thic

knes

s (M

)

Tonn

age

(Mt)

Gra

deC

r 2O

3 (%

) C

r 2O

3C

onte

nt(T

)C

r:Fe

Tota

l Ind

icat

ed M

iner

al R

esou

rces

8.

6738

.88

3.37

Infe

rred

Open

pit

Infe

rred

Tota

l Inf

erre

d M

iner

al R

esou

rces

TOTA

L

36.3

036

.80

13.5

1

Figure 14: Drilling Dataset and Geological Model

22.1 Reasonable and Realistic Prospects for Economic Extraction - Chromitite

Figure 15: Historical Open Pits and 2017 Proposed Pits

Table 26: Techno-Economic Parameters for Economic Viability Studies Parameter Units Metric 2013 Metric 2017

Table 27: RRPEEE for Rooderand 46JQ - Chromite SAMREC Table 1 Section 4.3 And

4.5

Reasonable And Realistic Prospects For Eventual Economic Extraction Rooderand Project 2017 Mine Planning

4.5 Reporting

SAMREC Table 1 Section 4.3 And

4.5

Reasonable And Realistic Prospects For Eventual Economic Extraction Rooderand Project 2017 Mine Planning

22.2 Mineral Resources – PGEs

22.2.1 Exploration Target for PGEs

Table 28: Exploration Target on Rooderand 46JQ RE/Ptn2 Only Reef Approximate

Tonnages (Mt) Approximate Grade

4E(G/T) Approximate 4E Contents

(Oz)

TOTAL 29.00 34.60 3.00 3.70

23 Technical Studies

23.1 Conceptual Mine Design

Table 29: Conceptual Mine Design Parameters Metric Units Chromite Open Pits PGE Open Pits

23.2 Processing

23.3 Infrastructure

23.4 Risk Analysis

23.5 Environmental, Social and Governance (SAMESG) Compliance Status

23.5.1 South African Legislative Framework

23.5.2 Permitting Status

23.5.3 Legal Aspects

23.5.4 Environmental Parameters

23.5.5 External Social and Political Parameters

23.5.6 Internal Social Parameters

23.5.7 Conformance and Compliance Status

23.5.8 ESG Liability

23.5.9 Risk Analysis Process

24 Exploration Budget

Tabl

e 30

: Roo

dera

nd P

roje

ct E

nviro

nmen

tal a

nd S

ocia

l Com

plia

nce

Stat

us

Act

, R

egul

atio

n O

r B

y-La

w

Perm

ittin

g R

equi

rem

ents

C

urre

nt C

ompl

ianc

e St

atus

Table 31: Exploration and Technical Study Indicative Budget Exploration Or Technical Study Potential Cost (Zarm)

TOTAL 3.9

25 Market review

26 Interpretation and Conclusions

D.S. Ferreira

DIRECTOR OF IRES

27 References

Mineral Deposits of Southern Africa

A Competent Persons Report on the mineral assets of Chrometco Limited for the purpose of listing on the JSE

Compressive deformation in the floor rock to the Bushveld Complex (South Africa): evidence from the Rustenburg Fault Zone

A Report for Rustenburg Platinum Mines and Amplats. Pilanesberg Seismic Survey: First Interpretation

A study of the Palaeomagnetism of the Pilanesberg dykes

The palaeomagnetism of the main zone in the western Bushveld Complex

The Palaeomagnetism of the Main Zone of the Eastern Bushveld Complex

The Palaeomagnetism of the Merensky Reef Footwall Rocks of the Bushveld Complex

Palaeomagnetism of the upper zone of the Bushveld Complex, Tectonophysics

Palaeomagnetism of granites in the Bushveld Complex, South African Journal of Geology

The magnetic susceptibility of the mafic rocks of the Bushveld Complex

New Palaeomagnetic results from the northern Bushveld Complex of South Africa

South African Geophysical Atlas, Volume IV, Physical properties of South African Rocks, Version III

The Mineral Resources of South Africa

Table 32: Glossary and Abbreviations

Appendix 1: Mineral Asset Valuation

Figure 3: Value Distribution Graphs – In-Situ Indicated Resource Value Range – Cr2O3 Contained TonnesFigure 4: Value Distribution Graphs – In-Situ Inferred Resource Value Range – Cr2O3 Contained Tonnes

1 Synopsis

Chromite ResourcesTonnage(tonnes)

Grade(%)

Contenttonnes

Indicated Mineral Resources 8,670,000 38.88 3,370,000Inferred Mineral Resources 37,170,000 36.80 10,140,000

Totals 45,840,000 29.47 13,510,000IRES 2016, Mineral Corporation 2008Mineral Resources Reported According to SAMREC2016

PGE Exploration TargetSource

Tonnage Range(tonnes)

4E Grade Range(g/t)

4E Content Range(oz)

Merensky 12,000,000 16,990,000 3.00 4.10 1,120,000 1,590,000UG2 17,100,000 17,750,000 3.60 4.00 1,910,000 2,210,000Total Exploration Target 29,100,000 34,740,000 3,000,000 3,800,000

Bleeker 2005, IRES 2017The Exploration Target is not a Mineral Resource but is conceptual in nature and there has been insufficient exploration to define a MineralResource and it is uncertain if further exploration could result in the determination of a Mineral Resource*rounded down to express uncertainty of the estimate



ZAR222.0m ZAR469.0mZAR334.5m.

In Situ Values Project Values

Resource CategoryResources

(Tonne)/(Oz)LowerValue

(ZAR/Unit)

UpperValue

(ZAR/Unit)

Preferred(ZAR/Unit)

LowerValue(Zarm)

UpperValue(Zarm)

Preferred(Zarm)

Chrome Mineral Resources 13,510,000 13.10 26.28 19.10 177.00 355.00 258.00PGE Exploration Target 3,400,000 15.00 30.00 22.50 45.00 114.00 76.50

Total 222.00 469.00 334.50

2 Report Overview 2.1 Introduction and Scope

2.2 Sources of Information

2.3 Valuation Date

2.4 Background on Authors

2.5 Independence

2.6 Forward Looking Statements

2.7 Reliance on Other Experts

2.8 Site Visit (T1.0)

2.9 Chromite Market Review

2.10 PGE Market Review

3 Asset Information 3.1 Identity and Tenure

Error! Reference source not found.

Figure 16: Project Location Satellite Image

3.2 History

3.3 Geological Setting

3.4 Mineral Resources and Mineral Reserves


Table 33: Mineral Resources – Chromite Source Unit

Tonnage(tonnes)

Cr2O3 Grade(%)

Cr2O3 Content(tonnes)

Indicated Mineral Resources

Open PitLG5,LG6, LG7, MG3,

MG42,010,000 37.10 750,000

Underground LG6, MG4A 6,660,000 39.42 2,630,000Total Indicated Mineral Resources 8,670,000 38.88 3,370,000Inferred Mineral Resources

Open PitLG5,LG6, LG7, MG2,

MG3, MG46,560,000 36.38 2,380,000

UndergroundLG5,LG6, LG7, MG2,

MG3, MG430,600,000 36.31 7,730,000

Total Inferred Mineral Resources 37,170,000 36.32 10,140,000Total Resources 45,840,000 36.80 13,510,000

IRES 2016, Mineral Corporation 2008Mineral Resources Reported Accordingto SAMREC 2016

Table 34: Exploration Target – PGE Source

Tonnage Range(tonnes)

4E Grade Range(g/t)

4E Content Range(oz)

Merensky 12,000,000 16,990,000 3.00 4.10 1,120,000 1,590,000UG2 17,100,000 17,750,000 3.60 4.00 1,910,000 2,210,000

Total ExplorationTarget

29,100,000 34,740,000 3,000,000 3,800,000

Bleeker 2005, IRES 2017The Exploration Target is not a Mineral Resource but is conceptual in nature and there has been insufficient exploration to define aMineral Resource and it is uncertain if further exploration could result in the determination of a Mineral Resource*rounded down to express uncertainty of the estimate

4 Valuation 4.1 Valuation Approaches and Methodologies


Figure 17: Rooderand – Project Life Stages

4.2 Market Approach Valuation

4.2.1 Valuation of Chromite Interest

Error! Reference source not found. Error! Reference source not found. Error! Reference source not found.

Figure 18: Value Distribution Graphs – In-Situ Indicated Resource Value Range – Cr2O3 Contained Tonnes

Figure 19: Value Distribution Graphs – In-Situ Inferred Resource Value Range – Cr2O3 Contained Tonnes

ZAR177.0m ZAR355.0mZAR258.0m


Table 35: Valuation Summary: Chromite Interest In Situ Values Project Values

Resource CategoryCr2O3Content(tonnes)

LowerValue

(ZAR/tonne)

UpperValue

(ZAR/tonne)

Preferred(ZAR/tonne)

LowerValue(ZARm)

UpperValue(ZARm)

Preferred(ZARm)

Indicated MineralResources

3,370,000 22.50 45.00 33.30 76.00 152.00 112.00

Inferred MineralResources

10,140,000 10.00 20.00 14.40 101.00 203.00 146.00

Total 13,510,000 13.10 26.28 19.10 177.00 355.00 258.00*rounded to nearest million

4.2.2 Valuation of PGE Interest

Error! Reference source not found. Error! Reference source not found.

Figure 20: Value Distribution Graphs – In-Situ Inferred Resource Value Range – PGE Contained Ounces



Table 36: Valuation Summary: PGE Interest In Situ Values Project Values

Resource CategoryPGE

(ounces)LowerValue

(ZAR/oz)

UpperValue

(ZAR/oz)

Preferred(ZAR/oz)

LowerValue(ZARm)

UpperValue(ZARm)

Preferred(ZARm

Lower ounce Range 3,000,000 15.00 30.00 22.50 45.00 90.00 67.50Upper ounce Range 3,800,000 15.00 30.00 22.50 57.00 114.00 85.50

Mean ounces 3,400,000 15.00 30.00 22.50 45.00 114.00 76.50

4.3 Valuation Results



ZAR222.0m ZAR468.0mZAR334.5m Error! Reference source not

found.

Table 37: Valuation Summary: Total Value In Situ Values Project Values

Resource CategoryResources(tonne)/(oz)

LowerValue

(ZAR/unit)

UpperValue

(ZAR/unit)

Preferred(ZAR/unit)

LowerValue(ZARm)

UpperValue(ZARm)

Preferred(ZARm)


Total 222.00 469.00 334.50

4.4 Previous Valuations

5 Conclusions



ZAR222.0m ZAR469.0mZAR334.5m. Error! Reference source not

found.

Table 38: Valuation Summary: Total Value In Situ Values Project Values

Resource CategoryResources(tonne)/(oz)

LowerValue

(ZAR/unit)

UpperValue

(ZAR/unit)

Preferred(ZAR/unit)

LowerValue(ZARm)

UpperValue(ZARm)

Preferred(ZARm)


Total 222.00 469.00 334.50

6 Competent Valuator Certificate

7 Signatures

Iaan Myburgh, CFA®


Gert Kriel, CFA®


App

endi

x 2:

Dat

a Su

ppor

ting

Chr

omite

Val

uatio

n In

-Situ

Val

ues

Mea

sure

dIn

dica

ted

Infe

rred

Dat

eA

sset

Nam

eA

sset

Hol

der

Met

hod

Low

Mid

Hig

hLo

wM

idH

igh

Low

Mid

Hig

h(Z

AR

/tonn

e)(Z

AR

/tonn

e)(Z

AR

/tonn

e)(Z

AR

/tonn

e)(Z

AR

/tonn

e)(Z

AR

/tonn

e)(Z

AR

/tonn

e)(Z

AR

/tonn

e)(Z

AR

/tonn

e)

App

endi

x 3:

Dat

a Su

ppor

ting

PGE

Valu

atio

n

In-S

itu V

alue

sM

easu

red

Indi

cate

dIn

ferr

edD

ate

Ass

et N

ame

Ass

et H

olde

rM

etho

dLo

wM

idH

igh

Low

Mid

Hig

hLo

wM

idH

igh

(ZA

R/o

z)(Z

AR

/oz)

(ZA

R/o

z)(Z

AR

/oz)

(ZA

R/o

z)(Z

AR

/oz)

(ZA

R/o

z)(Z

AR

/oz)

(ZA

R/o

z)

Appendix 4: CV of Mr. Iaan Myburgh CV: Iaan Myburgh

Full Names

Nationality

Education

Competency

Industry

Profile

Software Tools

Languages

Employment History

Oct 2015 – March 2016 African Chrome Fields – Feasibility and Implementation of Chrome Spiral Plants and Mine sites




Nov 2013 – May 2014 GoldBridges Global Resources - Competent Person’s Report

Preparing Financial Valuation Models

Sep 2011 – Nov 2011 Optimum Coal – Fairness Opinion Drafting of Fairness Opinion and Valuation of mineral assets

Aug 2012 – Sep 2012 Chrometco Ltd – JSE Fairness Opinion Drafting of Fairness Opinion and Valuation of mineral assets

Dec 2011 – Jan 2012 Frontier Rare Earths – Preliminary Economic Assessment Preparing Financial Valuation Models

Nov 2011 – Feb 2012 Tanzanian Royalty – Preliminary Economic Assessment Preparing Financial Valuation Models

Presentations at Short Courses

2013 Introduction to the Minerals Industry for Auditors by Venmyn Deloitte

Co-coordinator

2012 and 2013 Compliance and Reporting Rules in the Minerals Industry Course by Venmyn Deloitte

Introduction to Finance

2012 Mineral Asset Valuation Course by South African Institute of Mining and Metallurgy

Mineral Asset Valuation using Probabilistic Modelling Techniques




CV: Gert Kriel

Full Names

Nationality

Education

Competency

Industry

Profile

Software Tools

Languages

Employment History

Oct 2015 – June 2016 African Chrome Fields – Feasibility and Implementation of Chrome Spiral Plants and Mine sites




Nov 2012 – Dec 2014 Venmyn Deloitte – Senior Consultant

Specialising in Mineral Asset Valuations

Jul 2011 – Oct 2012 Venmyn Rand (Pty) Ltd – Mineral Industry Analyst Specialising in Mineral Asset Valuations

Apr 2009 – Jun 2011 SDT Financial Software Solutions – Product Implementation Consultant

Implementation of Insurance Administration Software named Exergy


BCom Hons (Economics), University of South Africa



Appendix 5: Competent Persons Certificates Competent Person’s Certificate – Dexter Ferreira

Name of Firm:Name of Staff:Profession:Date of Birth: Web Site:Email Address:Nationality:

Membership in Professional Societies: MEMBER PROFESSIONAL SOCIETY YEAR OF REGISTRATION REGISTRATION NUMBER

Detailed Tasks Assigned: YEAR CLIENT COMMODITY PROJECT DESCRIPTION

3

3


3


Key Qualifications:

Education: DEGREE/DIPLOMA FIELD INSTITUTION YEAR

Employment Record: POSITION COMPANY JOB DESCRIPTION DURATION

optimizing

POSITION COMPANY JOB DESCRIPTION DURATION

Languages:

speak/read/writespeak/read/write

speak/read/writespeak/read

Certification:

SAMREC Table 1

SECTION CRITERIA PROJECT NAME

1 Project Outline Rooderand Project 1.1 Property Description

1.2 Location

1.3 Adjacent Properties

1.4 History

1.5 Legal Aspects and Permitting

1.6 Royalties

1.7 Liabilities

2 Geological Setting, Deposit, Mineralization 2.1 Geological Setting, Deposit, Mineralization

SAMREC Table 1


3 Exploration and Drilling, Sampling Techniques and Data

Drilling Techniques

3.3 Sampling Method, Collection, Capture and Storage

SAMREC Table 1





3.7 Bulk Density


4 Estimation and Reporting of Exploration Results and Mineral Resources 4.1 Geological Model and Interpretation

4.2 Estimation and Modeling Techniques

SAMREC Table 1


4.3 Reasonable and realistic prospects for eventual economic extraction


4.5 Reporting

5 Technical Studies 5.1 Introduction

5.2 Mining Design

5.3 Metallurgical and Testwork

5.4 Infrastructure

5.5 Environmental and Social

SAMREC Table 1


5.6 Market Studies and Economic Criteria

5.7 Risk Analysis

5.8 Economic Analysis

6 Estimation and Reporting of Mineral Reserves 6.1 Estimation and Modeling Techniques


6.3 Reporting

SAMREC Table 1


7 Audits and Reviews 7.1 Audits and Reviews

8 Other Relevant Information 8.1 Other Relevant Information

9 Qualification of Competent Person(s) and other Key Technical Staff, Date and Signature Page 9.1 Qualification of Competent Person(s) and other Key Technical Staff, Date and Signature Page

Appendix 7: SAMVAL Code Checklist SAMVAL SECTION CRITERIA Rooderand Project

T1.0 General

T1.1 Illustrations

T1.2 Synopsis

T1.3 Introduction and Scope

T1.4 Compliance

T1.5 Identity, Tenure and Infrastructure

T1.6 History

T1.7 Geological Setting

T1.8 Exploration Results and Exploration Targets

T1.9 Mineral Resources and Mineral Reserves

SAMVAL SECTION CRITERIA Rooderand Project

T1.10 Modifying Factors and Key Assumptions

T1.11 Previous Valuations

T1.12 Valuation Approaches and Methods

T1.13 Valuation Date

T1.14 Valuation Results

T1.15 Valuation Summary and Conclusions

T1.16 Identifiable Component Asset (ICA) Values

T1.17 Historic Verification

T1.18 Market Assessment

SAMVAL SECTION CRITERIA Rooderand Project

T1.19 Sources of Information

Appendix 8: JSE Section 12 Checklist SECTION CRITERIA PROJECT NAME

12.9 A Competent Person’s Report must comply with the SAMREC and SAMVAL Codes and must: Rooderand Project

Tabl

e 39

: Le

gisl

atio

n A

pplic

able

to M

inin

g O

pera

tions

A

PPLI

CA

BLE

LE

GIS

LATI

ON

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APP

LIC

AB

LE

LEG

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TIO

N

SEC

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NA

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EQU

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Roy

alty

Rat

e =

0.5

+E

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X 1

00

Gro

ss S

ales

(ref

ined

) x 1

2.5

Roy

alty

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e =

0.5

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IT

X 1

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(unr

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9

APP

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560

APPENDIX 6

MATERIAL BORROWINGS

Chrometco

How arose Part of Transaction

Secured Secured

Lender Sail Minerals

Amount and terms of repayment Up to R10 million, repayable from the proceeds of the

profits from Black Chrome

Interest rate Prime

Details of security All shares owned by Chrometco in the share capital of

Rooderand

Details of conversion rights N/A

Repayable in 12 months N/A

Black Chrome

1 How it arose Part of Transaction – legal and consultant costs

Secured Unsecured


Amount and terms of repayment R368 784, no fixed terms of repayment

Interest rate No interest payable

Details of security N/A



2 How it arose By implementation of the UWR recapitalisation, Sail

Minerals or nominee will settle R100 000 000 of the

existing IDC loan, R45 000 000 of which will be lent to Sail

Minerals by an associated entity

Secured Unsecured

Lender 25 Sunninghill Office (Pty) Ltd and Sunninghill 07 (Pty)

Ltd

Amount and terms of repayment R45 000 000, no fixed terms of repayment





UWR

1 How it arose Arose out of business rescue proceedings (This loan will

be settled by Black Chrome on behalf of UWR)

Secured Secured

Lender IDC

Amount and terms of repayment R100 000 000 repayable on section 11 consent approval

Interest rate no interest payable

Details of security Secured through a general notarial bond over all the

assets


Repayable in 12 months Repayable on section 11 consent approval

561

2 How it arose Ordinary course of business

Secured Secured

Lender IDC

Amount and terms of repayment R66 964 817

Recapitalised as ordinary shares as part of business

rescue process

Interest rate N/A


assets




Secured Secured

Lender IDC


Recapitalised as preference shares as part of business

rescue process. The preference shares are

non-convertible with no fixed date of redemption



assets




Secured Secured

Lender IDC


Repayment: Year 4 R4 million

Year 5 R34 772 million




Interest rate No interest payable until the 25th month after Section 11

Consent Date, but will thereafter attract interest at a rate

of prime plus 3.3% with a two-year capital and interest

moratorium


assets


Repayable in 12 months No repayment until March 2019

Palm Chrome

How it arose Funding loan to acquire Palmietfontein right (R2 200 000)

Part of Transaction – legal and consultant costs R407 025)

Secured Unsecured


Amount and terms of repayment R2 067 025, no fixed terms of repayment





562

Sail Minerals


Secured Unsecured

Lender Sail Mining CC


Interest rate To be agreed between the parties from time to time





Secured Unsecured

Lender Sail Resources (PTE) Limited







Secured Unsecured

Lender Sail Logistics (PTY) Limited







Secured Unsecured

Lender Theradex (PTY) Limited






563





Directors







NOTICE OF GENERAL MEETING OF CHROMETCO SHAREHOLDERS

Notice is hereby given that a General Meeting of Shareholders of Chrometco (“the General Meeting”) will be

held at Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196 at 10:00 on 18 July 2017 for the purpose of

considering, and if deemed fit, passing, with or without modification, the following resolutions set out in this

Notice of General Meeting

Note:

The definitions and interpretations commencing on page 8 of the Circular to which this Notice of General Meeting is attached, apply

mutatis mutandis to this Notice of General Meeting and to the resolutions set out below.

For a special resolution to be approved by Shareholders, it must be supported by at least 75% of the voting rights exercised on the

resolution. For an ordinary resolution to be approved by Shareholders, it must be supported by more than 50% of the voting rights

exercised on the resolution, save for Ordinary Resolution 5, which must be supported by at least 75% of the voting rights exercised on

the resolution.

1. ORDINARY RESOLUTION NUMBER 1 – ACQUISITION OF THE BLACK CHROME SHARES,

THE PALM CHROME SHARES AND THE SAIL MINERALS SHARES

“RESOLVED AS AN ORDINARY RESOLUTION that, subject to the approval of Ordinary Resolution

Number 2, Ordinary Resolution Number 3 and Special Resolution Number 1, the acquisition by the

Company of the Acquisition Shares for a total purchase consideration to be settled by way of the issue

of 2 405 000 0000 Chrometco Shares, on the terms more fully set out in the Black Chrome Agreement

and the Palm Chrome Agreement, the salient terms whereof are contained in the Circular and copies of

which have been made available for inspection by Shareholders, be and is hereby approved in terms of

the JSE Listings Requirements.”

Reason and effect

The reason for Ordinary Resolution Number 1 is to approve the acquisition of the Acquisition Shares in

accordance with the JSE Listings Requirements.

The effect of Ordinary Resolution Number 1, if passed by Shareholders, is that the Company will be

granted the necessary authority by Shareholders in terms of the JSE Listings Requirements to implement

the Acquisitions.

564

2. ORDINARY RESOLUTION NUMBER 2 – AUTHORITY TO ISSUE THE SPECIFIC ISSUE SHARES

“RESOLVED that, subject to the approval of Ordinary Resolution Number 1, Ordinary Resolution

Number 3 and Special Resolution Number 1, the Directors be and are hereby authorised to issue the

Specific Issue Shares, being 62 500 000 ordinary shares of no par value in the authorised share capital of

the Company, be and is hereby approved in terms of paragraph 5.51(g) of the JSE Listings Requirements

and the Company’s MOI.”

Reason and effect

The reason for Ordinary Resolution Number 2 is that the issuing of the Specific Issue Shares in terms

of the Specific Issue requires the approval of Chrometco Shareholders in terms of paragraph 5.51(g)

of the JSE Listings Requirements and the Company’s MOI. The effect of Ordinary Resolution Number 2

is that the requisite approval, in terms of paragraph 5.51(g) of the JSE Listings Requirements and the

Company’s MOI, will be granted by Shareholders in order for the Specific Issue to be implemented.

Note: In terms of paragraph 5.51(g) of the JSE Listings Requirements, Ordinary Resolution Number 2 requires the approval of at

least 75% of the votes cast in favour thereof by all Shareholders present or represented by proxy at the General Meeting.

3. ORDINARY RESOLUTION NUMBER 3 – WAIVER OF THE MANDATORY OFFER

“RESOLVED AS AN ORDINARY RESOLUTION that, in accordance with the provisions of regulation

86(4) of the Companies Regulations, the requirement in terms of section 123 of the Companies Act that

GSE makes the Mandatory Offer to all Chrometco Shareholders by reason of it acquiring in excess of

35% of the of the total issued share capital of the Company as a consequence of the Transaction, be and

is hereby waived.”

Note: In terms of regulation 86(4) of the Companies Regulations, Ordinary Resolution Number 3 must be approved by independent

holders of more than 50% of the general voting rights of all the issued securities of the Company, present in person or

represented by proxy at the General Meeting.

Reason and effect

The reason for Ordinary Resolution Number 3 is that following the implementation of the Transaction,

GSE will hold in excess of 35% of the total issued share capital of the Company requiring it to make the

Mandatory Offer to Chrometco Shareholders, unless same is waived by independent holders of more

than 50% of the general voting rights of all the issued securities of the Company. The effect of Ordinary

Resolution Number 3 is that should a majority of independent Shareholders approve Ordinary Resolution

Number 3, GSE will not be obliged to make the Mandatory Offer.

4. ORDINARY RESOLUTION NUMBER 4 – CONFIRMATION OF APPOINTMENT OF N WAISBERG AS

AN EXECUTIVE DIRECTOR

“RESOLVED AS AN ORDINARY RESOLUTION that, Mr N Waisberg’s appointment as an executive

Director of the company effective from 9 September 2016 is hereby confirmed.

Reason and effect

The reason for Ordinary Resolution Number 4 is the requirement in terms of the Company’s MOI and the

Act for shareholders to approve the appointment of the Directors of a company in General Meeting.

5. SPECIAL RESOLUTION NUMBER 1 – AUTHORITY TO ISSUE THE ACQUISITION SHARES AND THE

SPECIFIC ISSUE SHARES

“RESOLVED AS A SPECIAL RESOLUTION that, subject to the approval of Ordinary Resolution

Number 1, Ordinary Resolution Number 2 and Ordinary Resolution Number 3, the Company be and is

hereby authorised to issue the Acquisition Shares and the Specific Issue Shares, the voting power of

which will exceed 30% of the voting power of all Chrometco Shares held by Chrometco Shareholders

immediately prior to issue of the Acquisition Shares and the Specific Issue Shares in terms of section

41(3) of the Companies Act.”

Reason and effect

The reason for Special Resolution Number 1 is that section 41(3) of the Companies Act requires that

companies obtain the approval of members by special resolution for any issue of securities, if the voting

power of the securities that will be issued will be equal to or exceed 30% of the voting power of all the

securities of that class held immediately before the issue.

565

The effect of Special Resolution Number 1 is that the Company shall be authorised to issue the Acquisition

Shares and the Specific Issue Shares as required in terms of section 41(3) of the Companies Act.

VOTING AND PROXIES

The date on which Shareholders must be recorded, as such in the share register maintained by the Transfer

Secretaries of the Company (“the Share Register”) for purposes of being entitled to receive this notice is

Friday, 19 May 2017.

The date on which Shareholders must be recorded in the Share Register for purposes of being entitled to

attend and vote at this meeting is Friday, 7 July 2017. Accordingly, the last day to trade to be entitled to attend

and vote at this meeting is Tuesday, 4 July.

Section 63(1) of the Companies At, No 71 of 2008, as amended, requires that meeting participants provide

satisfactory identification. Meeting participants will be required to provide proof of identification to the

reasonable satisfaction of the Chairman of the General Meeting and must accordingly bring a copy of their

identity document, passport or drivers license to the General Meeting. If in doubt as to whether any document

will be regarded as satisfactory proof of identification, meeting participants should contact the Transfer

Secretaries for guidance.

Shareholders entitled to attend and vote at the General Meeting, may appoint one or more proxies to attend,

speak and vote in his/her stead. A proxy need not be a member of the Company. A form of proxy (yellow), in

which the relevant instructions for its completion are set out, is enclosed for use by a Certificated Shareholder

or Dematerialised Shareholder with “own-name” registration who wishes to be represented at the General

Meeting. Completion of a form of proxy (yellow) will not preclude such Shareholder from attending and voting

(in preference to that Shareholder’s proxy) at the General Meeting.

By order of the board

Vanessa Marques

Company Secretary

30 May 2017

Registered office Transfer secretaries

21 7th Avenue Computershare Investor Services

Parktown North, 2193 Proprietary Limited

(PO Box 464, Parklands, 2121) (Registration number 2004/003647/07)

Rosebank Towers, 15 Biermann Avenue

Rosebank, 2196 (PO Box 61051, Marshalltown, 2107)

566 PRINTED BY INCE (PTY) LTD REF. JOB013338





FORM OF PROXY – FOR USE BY CERTIFICATED AND OWN-NAME DEMATERIALISED

SHAREHOLDERS ONLY

Please read the notes on the reverse side of this form of proxy

The definitions and interpretations commencing on page 8 of the Circular to which this Form of Proxy is attached, apply mutatis mutandis to this Form of Proxy.

For use at the General Meeting of Shareholders of the Company, to be held at Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196 at 10:00 on Tuesday, 18 July 2017.

I/We (Full names in BLOCK LETTERS please)

of (address)

Telephone number Cellphone number

E-mail address

Being the registered holder(s) of: ordinary Shares in Chrometco Limited hereby appoint:

1. or failing him/her

2. or failing him/her

3. the Chairman of the General Meeting

as my/our proxy to vote for me/us on my/our behalf at the General Meeting which will be held for the purpose of considering and, if deemed fit, passing, with or without modification, the resolutions to be proposed thereat and at each adjournment thereof and to vote for and/or against the said resolutions and/or to abstain from voting in respect of the Shares of the Company registered in my/our name(s), in accordance with the following instructions (see notes):

Number of Shares

For Against Abstain

Ordinary Resolution Number 1Approval the Acquisition

Ordinary Resolution Number 2Approval of the Specific Issue

Ordinary Resolution Number 3Waiver of the Mandatory Offer

Ordinary Resolution Number 4Confirmation of appointment of N Waisberg as executive Director

Special Resolution Number 1Authority to issue the Acquisition Shares

Please indicate your voting instruction by way of inserting the number of Shares or by a cross in the space provided.

Signed at on 2017

Signature

Assisted by me (where applicable) (State capacity and full name)

Each Shareholder is entitled to appoint one or more proxy(ies) (who need not be a Shareholder(s) of the Company) to attend, speak and, vote in his stead at the General Meeting.

Notes:

1. A Chrometco Shareholder may insert the name of a proxy or the names of two alternative proxies of the Shareholder’s choice in the

space(s) provided, with or without deleting “the Chairman of the General Meeting”, but any such deletion must be initialled by the

Shareholder. The person whose name stands first on the form of proxy (yellow) and who is present at the General Meeting will be

entitled to act as proxy to the exclusion of those whose names follow.

2. A member is entitled to one vote on a show of hands and on a poll one vote in respect of each Share held. A resolution put to the

vote shall be decided by a show of hands unless before, or on the declaration of the results of the show of hands, a poll shall be

demanded by any person entitled to vote at the General Meeting.

3. A Chrometco Shareholder’s instructions to the proxy(ies) must be indicated by the insertion of the relevant number of Shares to be

voted on behalf of that Shareholder in the appropriate box provided. Failure to comply with the above will be deemed to authorise

the Chairman of the meeting, if he/she is the authorised proxy, to vote in favour of the resolutions at the meeting, or any other proxy

to vote or to abstain from voting at the meeting as he/she deems fit, in respect of all the Shares concerned. A Shareholder or his/her

proxy is not obliged to use all the votes exercisable by the Shareholder or his/her proxy, but the total of the votes cast and in respect

whereof abstentions are recorded may not exceed the total of the votes exercisable by the Shareholder or his/her proxy.

4. When there are joint registered holders of any Shares, any one of such persons may vote at the meeting in respect of such Shares as

if he/she was solely entitled thereto, but, if more than one of such joint holders be present or represented at any meeting, that one of

the said persons whose name stands first in the register in respect of such Shares or his/her proxy, as the case may be, shall alone

be entitled to vote in respect thereof. Several executors or administrators of a deceased member, in whose name any Shares stand,

shall be deemed joint holders thereof.

5. Forms of proxy (yellow) must be completed and returned to be received by the Transfer Secretaries of the Company, Computershare

Investor Services Proprietary Limited, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196 (PO Box 61051, Marshalltown,

2107), so as to be received by not later than 10:00 on Friday, 14 July 2017 alternatively, such form of proxy (yellow) may be handed to

the Chairman of the General Meeting prior to the exercise of the voting rights in terms thereof in respect of the resolution in question.

6. Any alteration of correction made to this form of proxy (yellow) must be initialled by the signatory (ies).

7. Documentary evidence establishing the authority of a person signing this form of proxy (yellow) in a representative capacity must be

attached to this form of proxy (yellow) unless previously recorded by the Company’s Transfer Secretaries or waived by the Chairman

of the General Meeting.

8. The completion and lodging of this form of proxy (yellow) will not preclude the relevant Shareholder from attending the General

Meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof, should such Shareholder

wish to.

9. Summary of Rights Contained in Section 58 of the Act

In terms of section 58 of the Act:

a Shareholder may, at any time and in accordance with the provisions of section 58 of the Act, appoint any individual (including

an individual who is not a Shareholder) as a proxy to participate in, and speak and vote at, a Shareholders meeting on behalf of

such Shareholder;

a proxy may delegate her or his authority to act on behalf of a Shareholder to another person, subject to any restriction set out

in the instrument appointing such proxy;

irrespective of the form of instrument used to appoint a proxy, the appointment of a proxy is suspended at any time and to the

extent that the relevant Shareholder chooses to act directly and in person in the exercise of any of such Shareholder’s rights as

a Shareholder;

any appointment by a Shareholder of a proxy is revocable, unless the form of instrument used to appoint such proxy states

otherwise;

if an appointment of a proxy is revocable, a Shareholder may revoke the proxy appointment by: (i) cancelling it in writing, or

making a later inconsistent appointment of a proxy and (ii) delivering a copy of the revocation instrument to the proxy and to the

company; and

a proxy appointed by a Shareholder is entitled to exercise, or abstain from exercising, any voting right of such Shareholder

without direction, except to the extent that the relevant company’s Memorandum of Incorporation, or the instrument appointing

the proxy, provides otherwise.