Assore : Results for the half-year ended 31 December 2017

Assore Limited
Registration Number: 1950/037394/06
Share code: ASR
ISIN: ZAE000146932
(Assore or group or company)

RESULTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2017

Highlights
- Outstanding safety performance in the group
- Headline earnings 12% higher
- Interim dividend increased 67% to R10 per share
- Strong commodity prices
- Increased sales volumes for all products

CEO Charles Walters said:
'Improved volumes across our range of products and improved USD prices for all commodities in our basket except
chrome ore were enough to overcome a 6% strengthening of the Rand allowing us to post a 12% growth in headline
earnings. Given our strong balance sheet and good operational cash generation, we were pleased to be in a
position to increase the interim dividend by 67% to R10 per share.'

Commentary
Results
Headline earnings for the six months to 31 December 2017 (the current period) increased by 11,8% to R2,4 billion,
compared to the same period in the previous financial year (the previous period, or 2016). This increase comprises
higher headline earnings in Assmang Proprietary Limited (Assmang), which were 21,7% higher than 2016 and lower
headline earnings from the rest of the group's operations, which were 9,3% lower than 2016, at R701,8 million.

The group's major interests consist of its 100% ownership of Dwarsrivier and its 50% interest in Assmang which it
controls jointly with African Rainbow Minerals Limited (ARM). In accordance with International Financial Reporting
Standards (IFRS), the group accounts for Assmang's results using the equity accounting method.

The markets for the group's commodities remained firm with world economic growth for the 2017 calendar year (CY2017)
estimated at 3,6%, while China's economy increased by 6,9% over the same period. These growth rates supported
increased crude and stainless steel demand, with crude steel production for CY2017 5,3% higher than the previous
year, at 1,691 million metric tonnes. Global production of stainless steel for CY2017 was 5,6% above the
previous year, with the increase in China recorded at 5,8%.

These conditions led to prices that were generally slightly higher for the group's products, which are reflected
in the table below:
Half-year Half-year
ended ended % Increase/
Average price, US dollar, delivered in China 31 December 2017 31 December 2016 (decrease)
Iron ore (62% iron content, 'fines'
grade per metric tonne) 68 65 5
Manganese ore (44% grade manganese content
per dry metric tonne unit) 6,30 6,02 5
Chrome ore (44% chrome content material
per metric tonne) 195 224 (13)

Even though demand for chrome ore remained healthy, prices over the current period were lower than 2016.
This was mainly due to an abnormally high price spike exceeding US dollars (USD) 400 per metric tonne that
occurred in 2016 as a result of extremely low chrome ore inventories as well as higher levels of stainless
steel production in China. These inventories normalised to a level of 2,3 million tonnes
for the current period, which brought about lower prices.

Environmental regulations imposed in China have resulted in strong demand for high grade iron ores, including
'lumpy' iron ore. The premium for 'lumpy' material, was higher by nearly USD5 per metric tonne in the current
period, compared to 2016. Over 50% of Assmang's iron ore is sold into the market as 'lumpy' grade material.

Demand for manganese ore remained strong driven by weaker than expected Chinese domestic production of
manganese ore, increased production of crude steel and significantly higher Chinese electrolytic manganese
metal (EMM) production. This resulted in an undersupplied market, thus providing support for strong but
stable prices for both the high-grade (44% manganese content) and the lower-grade (37% manganese content)
indices.

The alloy market remained tight as growth in supply was not sufficient to offset the increases in demand.
These conditions, together with robust manganese ore prices, strong steel consumption and high steel prices
resulted in alloy prices across the grades being maintained at the higher levels as seen at the start of the
2017 calendar year.

The average level of the SA rand/US dollar exchange rate was 6% stronger across the current period, which
offset the impacts of the improved US dollar selling prices and sales volumes to a limited extent.

Safety
The group continues to maintain and achieve exceptional safety records. In 2017, Assmang's operations received
three safety awards at the annual Mine Safe conference, as arranged by the mining industry, Department of Mineral
Resources (the DMR) and organised labour. Black Rock Manganese Mine was awarded first place for best safety
performance in underground mines, while Beeshoek Iron Ore Mine (Beeshoek) achieved first place for best safety
performance for base metal mines and second place for the best year-on-year safety improvement. Beeshoek was also
the recipient of the best safety performance award from the DMR for achieving 16 000 fatality-free production shifts.
On 16 January 2018, Black Rock Manganese Mine achieved 6 million fatality-free shifts.

Sales volumes
Increased sales volumes of iron ore were realised, in both the export and local markets. Sales volumes of
manganese ore were well above the levels of the previous period, due to a combination of factors. The logistical
issues at Port Elizabeth, which restricted sales volumes in the previous period, were mostly resolved by July 2017.
In the current period, railage availability was also higher as a result of increased export capacity via Saldanha
Port. This additional availability was met by increased production from Nchwaning II shaft at Assmang's Black Rock
manganese mines.

Production at Sakura Ferroalloys SDN BHD, Malaysia (Sakura), has reached and exceeded capacity, resulting in higher
sales volumes of manganese alloys. Continued strong demand for chrome ore was evident across the period and improved
production levels at Dwarsrivier enabled the group to achieve record sales volumes of chrome ore for a six-month
period (refer 'Dwarsrivier' below). The following table sets out the sales volumes achieved by the group for the
current period:
Half-year Half-year
ended ended %
Metric tonnes '000 31 December 2017 31 December 2016 increase
Iron ore 9 130 8 805 4
Manganese ore* 1 556 1 417 10
Manganese alloys 162 139 17
Chrome ore 794 733 8
* Excluding intra-group sales to Cato Ridge Works.

Dwarsrivier
Mining and beneficiation efficiency improved by 3,1% and 0,7% respectively compared to 2016. These efficiency
improvements, together with labour productivity improvements resulted in an overall increase in production
volumes of 7,2%. Inflationary increases were effectively countered by improved efficiencies and cost of
production was marginally higher (0,1%) on a per-tonne basis. A new monthly production record was achieved
in July 2017. Cash flow (before capital expenditure) was R990 million following record half-year
sales volumes.

Expansion and capital expenditure
Capital expenditure in Assmang was consistent with that of the previous period, at R1,2 billion. Approximately
half of this amount was spent in Assmang's Iron Ore division, with R522 million spent on waste-stripping. A further
R285 million (2016: R652 million) was spent in its Manganese division on the manganese expansion project, which
stood at 83,6% completion at December 2017. The project is expected to be completed in 2020, at which stage an
overall manganese capacity of 4 million tonnes will be available from the Black Rock mines. Dwarsrivier spent
R130 million, mostly on sustainability and compliance items. Exploration and related activities continue in
IronRidge Resources Limited (AIM-listed), in which the group currently holds 29,5%.

Outlook
World economic growth for the 2018 calendar year is forecast to be stronger than CY2017, at 3,7%. It is also
expected that improved economic growth levels will be realised in all major areas in the world, and not merely
in the East, as has been the case in recent years. As a result, strong demand for the group's products is anticipated
in the short term and prices are expected to remain within relatively stable ranges. It is also expected that Chinese
environmental policies should continue to support demand for the group's high-quality products.

For iron and manganese ores, the relatively higher current price levels may attract additional supply into these
markets and depending on economic growth levels, may put pressure on price levels in the medium term.

Dividends
The results in this announcement include the final dividend relating to the previous financial year of 800 cents
(2016: 500 cents) per share, which was declared on 29 August 2017, and paid to shareholders on 26 September 2017.
Based on the level of earnings for the period, the board has declared an interim dividend of 1 000 cents
(2017: 600 cents) per share, which will be paid to shareholders on 19 March 2018.

Accounting policies and basis of preparation
The directors of Assore take full responsibility for the preparation of this announcement. The financial results
for the period under review have been prepared under the supervision of Mr RA Davies, CA(SA) and in accordance with
IAS 34 - Interim Financial Reporting and comply with IFRS, the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee, the Financial Pronouncements as issued by Financial Reporting Standards Council,
the Listings Requirements of the JSE Limited (JSE) and the Companies Act No 71 of 2008, as amended. The accounting
policies applied are consistent with those adopted in the financial year ended 30 June 2017.

Directors
Shareholders are advised that following his appointment as Chief Financial Officer to Assore in February 2017,
Mr Ross Davies has been appointed as a director, effective 20 February 2018. Ross qualified as a chartered accountant
in 1994 and joined the group as Group Accountant in 2008.

Declaration of interim dividend
Shareholders are advised that on 20 February 2018, the board of directors (the board) approved Interim dividend
number 122 (the dividend), of 1 000 cents per share (gross) for the half-year ended 31 December 2017.

In terms of paragraph 11.17 of the Listings Requirements of JSE Limited, shareholders are advised of the following
with regard to the declaration:
1. the dividend has been declared from retained earnings;
2. the local dividend tax (dividend tax) rate of 20% will apply;
3. the net local dividend amount is 800 cents per share for shareholders liable to pay the dividends tax;
4. the issued ordinary share capital of Assore is 139 607 000 shares, of which 36 455 970 (2016: 36 447 746) shares
are accounted for as treasury shares in terms of IFRS and are therefore excluded from earnings per share
calculations; and
5. Assore's income tax reference number is 9045/018/84/4.

The salient dates are as follows:
- Last day for trading to qualify and participate in the interim dividend Tuesday, 13 March 2018
- Trading 'ex dividend' commences Wednesday, 14 March 2018
- Record date Friday, 16 March 2018
- Dividend payment date Monday, 19 March 2018
- Dates (inclusive) between which share certificates may not be Wednesday, 14 March 2018
to dematerialised or rematerialised Friday, 16 March 2018

On behalf of the board
Desmond Sacco CE Walters
Chairman Chief Executive Officer

Johannesburg
21 February 2018

Consolidated income statement
Half-year Year
Half-year ended ended
ended 31 December 30 June
31 December 2017 2016 2017
R'000 Unaudited Unaudited Audited
Revenue 3 841 588 3 284 813 7 223 959
Turnover 3 138 720 2 721 760 5 945 266
Cost of sales (2 416 102) (1 893 337) (4 200 692)
Gross profit 722 618 828 423 1 744 574
Fees and commission earned from joint venture 458 174 421 616 920 055
Other income 291 731 192 390 372 317
Bargain purchase gain - - 256 755
Impairment of non-financial assets (21 564) - -
Other expenses (336 003) (297 070) (801 762)
Unrealised foreign exchange loss (81 998) - -
Finance costs (8 912) (7 324) (19 662)
Profit before taxation and joint venture 1 024 046 1 138 035 2 472 277
Taxation (262 764) (300 823) (583 420)
Profit after taxation, before joint venture 761 282 837 212 1 888 857
Share of profit from joint venture, after taxation 1 728 868 1 418 662 3 266 282
Share of loss from associates, after taxation (8 404) (7 011) (16 809)
Profit for the period 2 481 746 2 248 863 5 138 330
Attributable to:
Shareholders of the holding company 2 454 375 2 219 151 5 021 171
Non-controlling shareholders 27 371 29 712 117 159
As above 2 481 746 2 248 863 5 138 330
Earnings as above 2 454 375 2 219 151 5 021 171
Impairment of non-financial assets 21 564 - -
Profit on disposal of available-for-sale investments (42 565) - -
Profit on disposal of property, plant and equipment (5 619) (2 410) 1 670
Impairment arising on the sale of Dwarsrivier in joint venture - - 373 014
Bargain purchase gain (Dwarsrivier) - (44 659) (256 755)
Impairment of non-financial assets in joint venture entity - - 96 501
Taxation effect of above items 1 258 - (26 555)
Headline earnings 2 429 013 2 172 082 5 209 046
Earnings per share (basic and diluted - cents) 2 379 2 151 4 865
Headline earnings per share (basic and diluted - cents) 2 355 2 105 5 047
Dividends per share declared in respect of the profit
for the period (cents) 1 000 600 1 400
- Interim 1 000 600 600
- Final 800
Weighted average number of ordinary shares (million)
Ordinary shares in issue 139,61 139,61 139,61
Weighted impact of treasury shares held in trust (36,45) (36,43) (36,40)
103,16 103,18 103,21

Consolidated statement of comprehensive income
Half-year Year
Half-year ended ended
ended 31 December 30 June
31 December 2017 2016 2017
R'000 Unaudited Unaudited Audited
Profit for the period (as above) 2 481 746 2 248 863 5 138 330
Items that may be reclassified into the
income statement dependent on the
outcome of a future event 22 086 23 688 (183 604)
Gain on revaluation to market value of
available-for-sale investments after taxation 30 186 36 085 38 251
Gain on revaluation to market value of
available-for-sale investments 38 900 46 501 49 292
Deferred capital gains tax thereon (8 714) (10 416) (11 041)
Exchange differences on translation of foreign operations (8 100) (12 397) (248 814)
Actuarial gain on pension fund, after taxation - - 26 959
Total comprehensive income for the period, net of tax 2 503 832 2 272 551 4 954 726
(Less)/add back: Comprehensive (income)/loss
attributable to non-controlling shareholders (40 166) 25 743 (104 364)
Attributable to shareholders of the holding company 2 463 666 2 298 294 4 850 362

Consolidated statement of financial position
At At
At 31 December 30 June
31 December 2017 2016 2017
R'000 Unaudited Unaudited Audited
ASSETS
Non-current assets
Property, plant and equipment and intangible assets 1 662 604 1 289 991 1 584 642
Investments
- joint venture 16 278 970 15 258 461 15 327 400
- available-for-sale 223 876 240 008 229 376
- associates 172 297 117 837 108 729
- other 21 559 27 363 24 098
Pension fund surplus 93 144 68 070 93 144
Total non-current assets 18 452 450 17 001 730 17 367 389
Current assets
Inventories 1 049 715 1 103 685 1 223 032
Trade and other receivables 625 364 870 672 1 104 332
Cash resources 7 115 272 4 868 395 5 626 778
Total current assets 8 790 351 6 842 752 7 954 142
TOTAL ASSETS 27 242 801 23 844 482 25 321 531
EQUITY AND LIABILITIES
Share capital and reserves
Ordinary shareholders' interest 24 524 354 20 667 093 22 649 300
Non-controlling deficit (1 877) (34 904) (24 348)
Total equity 24 522 477 20 632 189 22 624 952
Non-current liabilities
Net deferred taxation liabilities 264 871 236 364 283 778
Long-term liabilities
- non-interest-bearing 135 925 100 324 134 920
Total non-current liabilities 400 796 336 688 418 698
Current liabilities
Interest-bearing 513 874 811 281 579 719
Non-interest-bearing 1 805 654 2 064 324 1 698 162
Total current liabilities 2 319 528 2 875 605 2 277 881
TOTAL EQUITY AND LIABILITIES 27 242 801 23 844 482 25 321 531

Fair values of financial instruments
The group uses the following hierarchy for determining and disclosing the fair value inputs of financial instruments:
Level 1 - quoted prices in an active market that are unadjusted for identical assets or liabilities;
Level 2 - valuation techniques using inputs, which are directly or indirectly observable; and
Level 3 - valuations based on data that is not observable (not applicable to the group).

The values of all other financial instruments recognised, but not subsequently measured at fair value, approximate
fair value. The following assets, all measured at level 1, were required to be recorded at fair value as follows:
Half-year Half-year Year
ended ended ended
31 December 31 December 30 June
2017 2016 2017
Unaudited Unaudited Audited
Level 1 Level 1 Level 1
R'000
Assets measured at fair value
Available-for-sale listed investments 223 876 240 008 229 376
Available-for-sale unlisted investments 21 559 27 363 24 098
245 435 267 371 253 474

Consolidated statement of cash flow
Half-year Half-year
ended ended Year ended
31 December 31 December 30 June
2017 2016 2017
Unaudited Unaudited Audited
R'000
Cash generated from operations 595 079 1 176 477 734 600
Cash generated by investing activities 958 900 691 486 2 123 308
Cash utilised by financing activities (65 485) (184 493) (416 055)
Increase in cash for the period 1 488 494 1 683 470 2 441 853
Cash resources at beginning of period 5 626 778 3 184 925 3 184 925
Cash resources per statement of
financial position 7 115 272 4 868 395 5 626 778

Consolidated statement of changes in equity
Half-year Year
Half-year ended ended
ended 31 December 30 June
31 December 2017 2016 2017
R'000 Unaudited Unaudited Audited
Share capital, share premium and other reserves
Balance at beginning of period 563 925 512 032 512 032
Other comprehensive income for the period 26 055 29 762 51 893
Net increase in the market value of
available-for-sale investments 30 186 36 085 38 251
Foreign currency translation reserve arising
on consolidation (4 131) (6 323) (13 317)
Actuarial gains on pension plan after taxation - - 26 959

Balance at end of period 589 980 541 794 563 925
Treasury shares
Balance at beginning of period (5 062 848) (5 051 583) (5 051 583)
Acquired during the period (2 662) (11 265) (11 265)
Balance at end of period (5 065 510) (5 062 848) (5 062 848)
Retained earnings
Balance at beginning of period 27 370 925 23 485 031 23 485 031
Profit for the period attributable to shareholders 2 454 375 2 219 151 5 021 171
Ordinary dividends declared during the period (825 416) (516 035) (1 135 277)
- total dividends declared (1 116 856) (698 035) (1 535 677)
- dividends on treasury shares held in BEE trusts 291 440 182 000 400 400

Balance at end of period 28 999 884 25 188 147 27 370 925
Ordinary shareholders' interest 24 524 354 20 667 093 22 872 002
Non-controlling interests
Balance at beginning of period (24 348) (33 871) (33 871)
Share of total comprehensive loss 22 471 (1 033) 9 523
- share of total comprehensive income/(loss) 23 402 23 637 104 364
- profit for the period 27 371 29 712 117 159
- other comprehensive income (3 969) (6 075) (12 795)
- dividends paid to non-controlling shareholders (931) (24 670) (94 841)
Balance at end of period (1 877) (34 904) (24 348)
Total equity 24 522 477 20 632 189 22 847 654

Segmental information
Joint venture mining and beneficiation
Other
mining
activities,
Marketing eliminations
Dwars- and and
R'000 Iron ore Manganese Chrome Sub-total rivier shipping adjustments1 Consolidated
Half-year ended
31 December 2017
- Unaudited
Revenues
Third party 7 900 942 5 962 454 82 860 13 946 256 1 981 955 1 862 603 (13 949 226) 3 841 588
Inter-segment - - - - - 69 182 (69 182) -
Total revenues 7 900 942 5 962 454 82 860 13 946 256 1 981 955 1 931 785 (14 018 408) 3 841 588
Contribution to profit 1 745 668 1 743 077 (18 536) 3 470 209 440 045 375 774 (1 804 283) 2 481 746
Impairment of
financial and
non-financial assets - - - - - (21 564) (21 564)
Half-year ended
31 December 2016
- Unaudited
Revenues
Third party 7 819 786 4 512 035 95 247 12 427 068 1 675 677 1 523 039 (12 340 971) 3 284 813
Inter-segment - - - - - 58 864 (58 864) -
7 819 786 4 512 035 95 247 12 427 068 1 675 677 1 581 903 (12 399 835) 3 284 813
Contribution to profit 2 044 193 756 975 (7 602) 2 793 566 420 695 346 766 (1 312 164) 2 248 863
Notes:
Other mining activities include the group's pyrophyllite and related business and the remainder of its operations.
1 The majority of adjustments to revenues give effect to joint venture revenues, which are not disclosed as Assmang
is equity-accounted.

Corporate information
Directors
Executive Desmond Sacco (Chairman)
CE Walters (Chief Executive Officer)
RA Davies (Finance)
PE Sacco (Marketing)
BH van Aswegen (Operations and Growth)

Non-executive EM Southey* (Deputy Chairman and Lead Independent Director)
DN Aitken*,TN Mgoduso*, S Mhlarhi*, WF Urmson*
*Independent

Registered office
Assore House, 15 Fricker Road
IIlovo Boulevard
Johannesburg, 2196

Company Secretary
African Mining and Trust Company Limited

Transfer office
Singular Systems Proprietary Limited
28 Fort Street
Birnam, 2196

Sponsor
The Standard Bank of South Africa Limited

Shareholders are advised that these results for the half-year ended 31 December 2017,
as well as a presentation covering these results are available on the group's website,
www.assore.com.