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Merafe Resources - Trading Statement and planned maintenance of furnaces
Merafe Resources Limited
(Formerly South African Chrome & Alloys Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1987/003452/06)
Share code: MRF ISIN code: ZAE000060000
(`Merafe Resources` or `the Company`)
Trading Statement and planned maintenance of furnaces
1. Trading statement
In terms of the Listing Requirements of the JSE Securities Exchange South
Africa, companies are required to release a trading statement as soon as they
become reasonably certain that the financial results for the period to be
reported on next will differ by more than 20% from those of the previous
reporting period.
Shareholders are advised that:
- Merafe Resources` 11% share of earnings before interest, tax,
depreciation and amortisation (`EBITDA`) from the Xstrata-Merafe
Chrome Venture for the six month period ending 30 June 2005 is
expected to increase by between 19% and 23% to between R71 million and
R74 million compared to the R60 million reported for the nine months
ended 31 December 2004. Shareholders are reminded that Merafe
Resources` share of the EBITDA from the Xstrata-Merafe Chrome Venture
increases from 11% to 14% on 1 July 2005;
- after accounting for corporate costs, interest and depreciation,
Merafe Resources` net profit after tax for the six month period ending
30 June 2005 is expected to increase by between 400% and 450% from the
R5.5 million reported for the nine months ended 31 December 2004 to
between R22 million and R25 million (representing between 1,8 cents
and 2,0 cents headline earnings per share and earnings per share; and
- the long-term borrowings of R395 million at 31 December 2004, are
expected to be reduced by R30 million at 30 June 2005.
This trading statement has not been reviewed or reported on by the Company`s
auditors. Merafe Resources will release its interim results for the six months
ended 30 June 2005 on or about 10 August 2005.
2. Planned maintenance of furnaces
Merafe Resources also confirms the planned temporary suspension of ferrochrome
production at seven furnaces at the Boshoek, Rustenburg & Wonderkop operations
of the Xstrata-Merafe Chrome Venture. The temporary suspension of production is
required to conduct maintenance on the furnaces and have been planned for the
South African winter months when electricity demand and power costs are at their
peak.
It is anticipated that five of the furnaces will be brought back into operation
after the winter period. A decision regarding the timing of the return to
production of the remaining two furnaces will be made in the second half of
2005, taking account of prevailing ferrochrome demand. As a consequence, planned
production of the Xstrata-Merafe Chrome Venture is expected to reduce by up to
78,000 tonnes in 2005, representing some 5% of annual production capacity.
Johannesburg
24 June 2005
Sponsor
ABSA Corporate and Merchant Bank - Corporate Finance
Date: 24/06/2005 08:00:06 AM
Produced by the JSE SENS Department
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