Metorex Cover Final 07 - · PDF fileMETOREX LIMITED ANNUAL REPORT 2007 Mission statement...

METOREX LIMITED ANNUAL REPORT 2007

www.metorexgroup.com


Mission statement

Our mission is to create wealth for all our stakeholders by the effi cient management of our mining and metallurgical operations and delivering fi nancial growth for our shareholders.

Registration number 1934/005478/06Incorporated in the Republic of South AfricaJSE code MTX ISIN 000022745Issuer code MEMTX Listed on the JSE Limited and London Stock Exchange

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Inside front

cover: Strategic objectives and company profi le

Outside fl ap: Mission statement

1: 2007 highlights

2: Shareholder information

3: Financial highlights and ratios

4: Group structure and business summary

6: Directorate

8: Chairman’s review

13: Statistical information

14: Chief executive offi cer’s report

16: Base metals

24: Gold

28: Industrial Minerals

32: Sustainable development and Group corporate social responsibility

40: Environmental responsibilities and occupational health and hygiene

42: Corporate governance

50: Segmental analysis

53: Annual fi nancial statements

87: Supplementary information

92: Notice of Annual General Meeting

Insideback

cover: Corporate information

95: Proxy

Contents

Contact details

Postal PO Box 2814, Saxonwold, 2132, South Africa

Telephone (+27 11) 880-3155

Facsimile (+27 11) 880-3322

E-mail [email protected]

Strategic objectives

With our competent and experienced management and listings on the JSE Limited, the London Stock Exchange and Bank of New York-sponsored ADR programme,

our strategic objectives are to:

– acquire and manage long-life, high-quality operations that diversify risk and provide sustainable earnings growth;

– maximise the return on investments of our portfolio of assets;

– sustain an appropriate Metorex culture throughout the Group; and

– create and maintain a market profi le which provides tradability and creates wealth and income for our shareholders.

COMPANY PROFILE

Company profile

Metorex is an established mid-tier mining group that occupies a unique position in the southern African mining industry. We specialise in identifying, developing and profi tably managing mining projects. Our current activities include a diversifi ed portfolio of gold, industrial minerals and base-metal mines.

Our management philosophy is that of centralised strategic logic, combined with a strong, decentralised profi t centre concept at operational level, that gives management at our mines the confi dence and fl exibility to conduct their operations effi ciently. The elements that contribute to the success of Metorex include a natural caution, operational leanness, controlled overheads, rigid cost-control, strong accountability, effi cient capital expenditure, utilisation of specialist consultants, and the quality of the orebody.

The Metorex Group has evolved by assembling a portfolio of profi table mining companies with a well-balanced commodity mix and good growth prospects. The Group has a record of sustained profi tability, despite the cyclical nature of commodity prices.

BASTION GRAPHICS

CORPORATE INFORMATION

REGISTRATION NUMBER1934/005478/06

REGISTERED OFFICE AND POSTAL ADDRESSMetorex Limited2nd Floor, Cradock Heights21 Cradock AvenueRosebank 2196, South Africa(PO Box 2814, Saxonwold 2132)

WEBSITE AND E-MAIL ADDRESSwebsite – www.metorexgroup.come-mail – [email protected]

TELEPHONE AND FAX NUMBERSTelephone: +27 (11) 880-3155Fax: +27 (11) 880-3322

DIRECTORSA S Malone (Chairman)C D S Needham (Managing)A Barrenechea*^A J Laughland*~ˇE W LeggK C Spencer R G Still** non-executive ~ British ^ Spanish ˇ independent

COMPANY SECRETARIESMoore Stephens MWM Inc. Chartered Accountants (SA)7 West StreetHoughton 2198, South Africa(PO Box 1574, Houghton 2041)

AUDITORSDeloitte & ToucheThe WoodlandsWoodlands Drive, WoodmeadSandton 2196, South Africa(Private Bag X6, Gallo Manor 2052)

TRANSFER SECRETARIES (SOUTH AFRICA)Link Market Services South Africa (Pty) Ltd11 Diagonal StreetJohannesburg 2001, South Africa(PO Box 4844, Johannesburg 2000)

UNITED KINGDOM REGISTRARSThe Capita Group plcThe Registry34 Beckenham RoadBeckenham, Kent BR34TUEngland

NORTH AMERICA AND CANADABank of New York101 Barclay St,New York NY10286USA

SPONSORBarnard Jacobs Mellet Corporate Finance (Pty) Limited2nd Floor, Barnard Jacobs Mellet House5 Sturdee AvenueRosebank 2196South Africa(PO Box 62200, Marshalltown 2107)




Mission statement



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Inside front



1: 2007 highlights




6: Directorate




16: Base metals

24: Gold









Insideback


95: Proxy

Contents

Contact details


Telephone (+27 11) 880-3155

Facsimile (+27 11) 880-3322









COMPANY PROFILE

Company profile




BASTION GRAPHICS













Metorex Annual Report 2007: Page 1

• Significant corporate activity: – Acquisition of 20% minority interest in Barberton Mines;

– Acquisition of 35% minority interest in Chibuluma South;

– Disposal of 74% interest in Wakefield (Coal operations);

– Acquisition of 16% minority interest in Ruashi Holdings;

– Reverse acquisition of Pan African Resources Plc;

– Agreement reached for acquisition of 39% interest in Copper Resources Corporation and 5% interest in Miniére de Musoshi et Kinsenda SARL with mandatory minority offer to follow.

• Ruashi Phase I/Sable commissioned

• Ruashi Phase II plant construction on target

• No fatalities during the financial year

• Chibuluma South Mine operated 5% above design capacity

• Zinc leach and electro-winning plant at Kabwe nearing completion

2007 HIGHLIGHTS

Earnings per share Headline earnings EBITDA per share

h h h+238% +132% +147%


SHAREHOLDER INFORMATION

Metorex Limited ordinary shares are listed on the JSE Limited in Johannesburg, South Africa, the London Stock Exchange and Bank of New York’s sponsored ADR programme.

Vision

Our vision is to expand our mining activities in southern Africa by acquiring, developing and managing a diversifi ed portfolio of quality mineral resources projects.

SHARE PRICE PERFORMANCE

2 600

2 400

2 200

2 000

1 800

1 600

1 400

1 200

1 000

800

—— Metorex share price —— Mining house index

40 000

38 000

36 000

34 000

32 000

30 000

28 000

26 000

24 000

22 000July2006

August2006

September2006

October2006

November2006

December2006

January2007

February2007

March2007

April2007

May2007

June2007


Financial performance – year ended 30 June 2007 2006 2005 2004

Gross revenue (R000) 1 703 757 1 013 328 644 244 846 799EBITDA (R000) 918 296 371 304 149 981 103 179Cash mining profit margin (%) 35 25 13 7Earnings per share (cents) 183,5 54,3 13,5 (8,6)Headline earnings per share (cents) 110,5 47,7 12,3 2,2Market capitalisation (R000) 8 048 840 3 237 093 1 167 321 428 764Shares in issue (000) 324 550 289 026 279 933 187 233Share price (cents) 2 480 1 120 417 229ZAR/US$ rate – Average (R/$) 7,2 6,4 6,2 6,9ZAR/US$ rate – Closing (R/$) 7,0 7,2 6,7 6,2

FINANCIAL HIGHLIGHTS AND RATIOS

EBITDA HISTORY (R000)

1 000

800

600

400

200

02004 2005 2006 2007

SHARE PRICE HISTORY (cents)

2 500

2 000

1 500

1 000

500

030 June 2004 30 June 2005 30 June 2006 30 June 2007

The Group produced record results with mining profit up 127% to R495 million, EBITDA up 147% at R918 million and headline earnings per share up 132% at 110,5 cents. The significant earnings growth is 70% attributable to robust commodity prices and 30% to volume increases at Chibuluma and Vergenoeg, as well as new production from the Ruashi/Sable project.


GROUP STRUCTURE AND BUSINESS SUMMARY

Chibuluma Mines plc 85%Ruashi Mining sprl 80%Sable Zinc Kabwe Ltd 100%Copper Resources Corporation ("CRC") 39%*Exploration targets:– Kasempa (Zambia) – Chifupu (Zambia)– Sokoroshi (DRC) – Musonoi (DRC)– Kinsenda, Lubembe and Mushoshi (DRC)

BASE METALS

Metorex, the leading mid-tier, multi-commodity mining group in southern Africa, operates through three divisional mining portfolios.

Our in-house skills include geology, mining, metallurgy, fi nancial engineering and marketing.

CopperAt Chibuluma on the Zambian copperbelt mineralisation is stratiform and occurs in sandstone and shale beds of the Katangan sedimentary sequence, similarly at our Ruashi prospect in the DRC, an extension of the same copper province.The major copper minerals are bornite (Cu5FeS4) with 62% copper, and chalcopyrite (CuFeS2) with 32,5% copper. Subordinate chalcocite (Cu2S) occurs. Near the surface, the minerals are oxidised to malachite and chrysocolla, among others. Mining is by cut-and-fi ll methods, the ore being trucked to surface. Chibuluma ore is concentrated by fl otation and the concentrate is smelted and refi ned to such high purity that it attracts a price premium. It is sold at the mine gate to smelters who export the fi nished product to Europe and the Far East in the form of cathodes and wire bars.Copper is used mostly in electrical and electronic products; construction and industrial applications, largely in the IT industry and a small amount is used in the transport industry.

CobaltCobalt occurs in the minerals carrollite and cobaltiferous pyrite in association with copper minerals on the Central African Copperbelt in Zambia and the DRC and is present at Ruashi. Treatment of the Ruashi/Etoile stockpiles is by conventional concentrator. The mining of cobalt from the Ruashi orebody will be by opencast methods.Cobalt is a tough white metal used in the production of Ni-Cad batteries, alloy hardening and in diamond tools. It is still used as a colouring agent in the pottery and glazing industries.

* Unconditional, irrevocable share purchase agreement signed.


GOLD

Pan African Resources plc 55%Exploration targets:– Manica – Mozambique – Central African Republic Dekoa Bongoin – Ghana Akrokerri Barberton Mines (Pty) Limited– Barberton exploration

INDUSTRIAL MINERALS

Vergenoeg Mining Company (Pty) Ltd 70%Consolidated Murchison Division 100%

Consolidated Murchison

Vergenoeg Barberton

1. Ruashi/Lubumbashi

3. Sable

Manica

Dekoa

Bongoin

Kinshasa

Bangui

SOUTH AFRICA

MOZAMBIQUE

ZAMBIA

DEMOCRATIC REPUBLIC OF CONGO

CENTRAL AFRICAN REPUBLIC

Production

Exploration

GoldGold occurs in the ancient greenstone rocks of the Barberton Supergroup. It has been mined for over 100 years, and is currently being accessed from the Fairview, Sheba and New Consort mines.Each operation has its own concentrating plant; in these plants the free gold is removed by Knelson concentrators and the sulphides are collected in the fl otation section. The concentrate from the fl otation plants is treated in a Biox® plant where micro-organisms convert the sulphides and release the gold, thereafter the gold is dissolved in cyanide and recovered in a normal CIP plant. The free gold and the gold recovered from the CIP plant are smelted and sent to the Rand Refi nery in Germiston for refi ning. Consolidated Murchison produces gold as a co-product with antimony.Gold is used mainly for electronics, and in the manufacture of jewellery.

Gold explorationBarberton Mines is a 74% owned subsidiary of Pan African Resources, a company listed on both the Alternative Investment Market (AIM) of the London Stock Exchange and on the Alternative Exchange of the JSE Limited. Metorex has a 55% interest in Pan African Resources. Pan African Resources is a gold exploration company, which through the acquisition of Barberton has a gold producer and cash fl ow generator. Pan African Resources’ main areas of exploration activity are presently in Mozambique, Central African Republic and Ghana. The most advanced of these exploration projects is the Manica project in Mozambique, which has an independently established ore resource of 1,5 million ounces of gold in situ.

FluorsparThe fl uorspar (CaF2) produced by Vergenoeg occurs in a funnel-shaped volcanic vent related to the granites of the Bushveld Igneous Complex. Mining is by opencast methods in the oxidized upper portion of the pipe. After three-stage crushing and single stage grinding in ball mills, the fl uorite is separated from the gangue by fl otation. The oleic acid collector and frother renders the concentrate hydrophobic. The concentrate is subject to wet high intensity magnetic separation to remove iron oxides and hydroxides before being vacuum fi ltered to reduce moisture to 10%. The fi nal product contains over 97% CaF2.The bulk of production is exported as acidspar to Europe and America for fl uorine chemicals. Fluorine, substituted for hydrogen in organic molecules, is the basis of fl uorinated hydrocarbon inert plastics such as Tefl on®, resins, aerosols, and lubricants. Hydrofl uoric acid is used mostly for fl uoro-carbon gases for refrigeration and air-conditioning (HFCs). Other uses include steel and aluminium production, food preservation and fl uoridation of drinking water.

AntimonyAntimony occurs as the sulphide, stibnite (Sb2S3) in quartz carbonate schists in the Murchison Range, in association with other sulphides and gold. Ore is mined at Consolidated Murchison by sub-level open stoping and hoisted to the concentrator where it is crushed and fi nely ground prior to fl otation of stibnite. The stibnite is roasted to form crude antimony trioxide. The white trioxide powder grading 82% antimony is shipped to Mexico. Antimony has a variety of uses but the main use is for fl ame retardant and in plastics, fabrics and electronic printed circuit boards.

AkrokerriGHANA

7.6.

5.

4. 2. Chibuluma/Chifupu

1. Ruashi/Lubumbashi2. Chibuluma/Chifupu3. Sable4. Kasempa5. Kinsenda6. Musonoi7. Sokoroshi


DIRECTORATE

Keith Spencer (57)Operations Director

Keith Cousens Spencer held the position of mine manager, consulting engineer and director of various companies in the Goldfields of South Africa stable before establishing himself as an independent consultant. He joined Metorex as a Consultant in 1999 and was appointed to our Directorate in 2001.

Edward Legg (50)Operations Director

Edward William Legg, a mining engineer by profession (Wits) has extensive operational and strategic planning experience throughout the South African mining industry.

Ed has been operations manager of several Metorex mines, and was appointed to the Metorex Board in February 2005.

Charles Needham (53)Chief Executive

Charles Denby Stockton Needham joined Metmin in 1981. His association with Metorex began during 1983 on his appointment as Financial Manager, and then Financial Director of the Company. His expertise lies in financing, financial reporting, management reporting, hedging and company matters.

Charles was appointed Chief Executive of the Group on 1 July 2005.

A member of the Audit Committee.

Simon Malone (63)Chairman

Anthony Simon Malone is a founding shareholder of Metorex. His expertise lies in the identification, evaluation and development of mining assets, and interface between corporate and operational management. Simon has worked for JCI, Chapman Wood & Griswold, Vancouver, Canada, King Resources and Rand London.

With effect from 1 July 2005, Simon’s role as Chairman of the Metorex Group was refined in order that he could focus his attention on the strategic development of the Company, and positioning it going forward.

A Remuneration Committee member.

The Group remains committed to its strategy of being a leading mid-tier multi-commodity mining group, focused on quality, long-life ore bodies in sub-Saharan Africa


From left: EW Legg, RG Still, KC Spencer, AJ Laughland,

AS Malone, A Barrenechea, CDS Needham and GA Forrest (photo unavailable).

Robert Still (52)

Non-Executive Director

Robert George Still started his career as a chartered accountant, becoming a partner of Ernst & Whinney before leaving in 1986 to co-found Rhoex Ltd (exploration and mining-JSE). Since that time Rob has been involved in both the senior and junior sectors of the mining industry worldwide and has held executive and non-executive director positions in mining and exploration companies listed in South Africa, Australia, Canada and the UK. In this time he has participated in the development of several new mining projects including Rhovan, Ticor Titanium, Pangea Goldfields, Southern Mining (Corridor Sands), Great Basin Gold (Burnstone) and Zimbabwe Platinum Mines Ltd.

Rob is currently Chairman of Pangea Exploration, a private company active in exploration, mining project development and mining finance. He was appointed to the Metorex Board in February 2005.

Alberto Barrenechea (63)


Alberto Barrenechea is a Director of the largest producer and consumer of fluorspar in Europe – Spanish-based Minerales Y Productos Derivados. Alberto is also an adviser on plant upgrades and the general metallurgical process of Metorex’s fluorspar mine, Vergenoeg. 34 years of industry experience.

A Remuneration Committee member.

Alistair Laughland (59)

Independent Non-Executive Director

Alistair John Laughland has extensive experience in banking, specifically in corporate and mining finance. Was on the board of the previous Maranda Mines Limited. Has served as an Independent Non-Executive Director of Metorex since 1999 and is a member of the Audit Committee.

George Arthur Forrest (67)


For more than twenty years, George has been chairman and chief executive officer of the Forrest Group of companies, which is a private group with companies located across Africa, Middle East and Europe, and active across a broad range of sectors including civil works, engineering, cement, trading, mining and refining.

In addition, George has been an Honorary Consul for France since 1999; Conseiller au Commerce Exterieur for Belgium since 1999; and is First Vice President of the Federation des Entreprises du Congo. George also currently holds the following decorations and orders: Grand Officier de l’Ordre National du Léopard (RDC); Commandeur de l’Ordre National du Mérite Italien (Italy); Commandeur de l’Ordre de Saint Marc de l’Eglise Orthodoxe d’Alexandrie (Greece); Officier de l’Ordre de Léopold II (Belgium); Chevalier de l’Ordre National de la Légion d’Honneur (France); Chevalier de l’Ordre National du Mérite (France); Médaille d’Or du Mérite Sportif (RDC); Médaille de Vermeil (Commandeur) de la Courtoisie Française (France); Médaille d’Honneur (Argent) de la Société d’Encouragement au Progrès (France); Médaille du Mérite Civique, Bronze, Argent, Or et Or avec Palme (RDC); and Officier de l’Ordre National du Zaïre (Zaïre). Appointed non executive director on 27 September 2007.


The 2007 fi nancial year has been characterised by a high level of corporate activity and acquisitions, which, accompanied by robust commodity prices, has been refl ected in the signifi cant increase in the market capitalisation of the company which has grown from R3,3 billion to R8,05 billion in the 12-month period.

The establishment of a “New Projects” division together with the operating experience gained in the DRC well positions the company for future growth. The highlights for the year were:

1. The acquisition of minority shareholdings in Barberton Mines (Pty) Limited, Chibuluma South Mine Limited and Ruashi Holdings (Pty) Limited.

2. The reverse listing of Barberton Mines (Pty) Limited into Pan African Resources Plc, an AIM listed gold producer/exploration company which was finalised on 24 July 2007.

3. The acquisition of a major shareholding in Copper Resources Corporation (CRC) subsequent to year-end which is to be followed by a minorities offer.

4. The commencement of construction of a zinc recovery plant at Sable Zinc.

5. Sustained robust commodity prices resulting in a 132% increase in headline earnings per share.

All of the group companies operated profitably during the year and are commented on in both the Chairman’s Review and the Chief Executive’s Report.

1. FINANCIAL HIGHLIGHTS The Group turnover increased by approximately

70% to R1,7 billion driven by both increased metal prices and expanded production levels. The cash profit margin increased from 25% to 35% resulting in an earnings increase to 183,5 cents/share (2006: 54,3 cents cps). The number of shares in issue increased by 12% to 324 million shares and at a closing share price of R24,80 at year-end, the company had a market capitalisation of R8,048 billion which places it in the top 100 companies on the JSE Limited (JSE) by market capitalisation value.

Capital expenditure during the year amounted to R788 million (2006: R479 million) of which the majority related to Ruashi Phase II with the balance being incurred on the Chibuluma South Decline and sustaining capital at the rest of the operations. Despite the high level of capital, the Group profitability was such that the debt/equity ratio of 17% (2006: 2%) remains within acceptable limits.

The most pleasing aspect of the year’s operating results was the improvement in margins to a level of 35% (2006: 25%). The group’s profit levels increased progressively during the year as the expansion projects were commissioned and operating efficiencies at the various mines improved. This trend is expected to continue during the forthcoming year.

CHAIRMAN’S REVIEW

The 2007 fi nancial year has been characterised by a high level of corporate activity and acquisitions, which, accompanied by robust commodity prices, has been refl ected in the signifi cant increase in the market capitalisation of the company which has grown from R3,3 billion to R8,05 billion in the 12-month period.

A S MALONEChairman


The sale of the Coal Division was finalised during the year resulting in an inflow to the Group of R338 million which has largely been utilised to finance the Ruashi Project and minority shareholder acquisitions.

2. BASE METAL DIVISION (Chibuluma, Ruashi and Sable)

RUASHI Phase I of the Ruashi Project, namely a concentrator

situated on site in the DRC and a processing facility at Kabwe in Zambia commenced operations during 2006 and operated successfully during the year with progressively improving recoveries as the various start up problems were rectified. The two-phased approach to the project has proved an invaluable learning curve with regard to doing business in the DRC. The mining of the stockpiles has been successful and has additionally achieved a meaningful rehabilitation benefit.

The Phase II project envisages a solvent extraction electro-winning plant on site to produce 45 000 tons of copper per annum and a cobalt processing facility to produce 3 500 tons of contained cobalt per annum. The decision to accelerate the development of this project taken last year has resulted in design and construction running in parallel with Phase I – production, with the first copper from Ruashi II targeted in early 2008. Following extensive discussions with a long-term consumer of cobalt, it was agreed that the company should produce a cobalt hydroxide rather than the originally envisaged production of both metal and carbonate. This will be followed by a partial conversion to metal in the medium term as knowledge of the market and the metallurgy of the cobalt occurs.

The Ruashi II project financing terms have been agreed with a major bank. The loan conditions require hedging arrangements be implemented. Accordingly, approximately 50% of the copper has been hedged for the financial year 2009 at a price of $7 071/ton. A series of “puts” at an average base level of $4 620 have been entered into for 25% of copper production in the 2010 financial year. This structure effectively retains the upside potential whilst protecting the downside. In addition, medium-term off-take contracts have been entered into for the sale of the copper and in view of the possible over supply of cobalt, a long-term contract for the sale of the cobalt.

The operations at the mine and the capital construction programme on site have been challenging and the Board thanks both the staff at Ruashi and Sable and the contractors and consultants involved in the Ruashi Phase II project who have found innovative and constructive solutions to the challenges presented.

CHIBULUMA The Chibuluma mine operated well during the

year and achieved record profits. The development of the decline has progressed rapidly enough to allow the decision to be taken to increase mining capacity from 40 000 tons per month to 50 000 tons per month of ore milled. This increase in production, together with the associated plant modifications will be completed by early 2008 allowing for increased production and profitability at Chibuluma. Investigations into the viability of the Chipufu deposit immediately adjacent to the Chibuluma South mine are continuing.

SABLE The Sable copper-cobalt processing plant operated

well during the year with the commissioning of the acid plant occurring in the first quarter of 2007 allowing for the production of acid on site. The market for acid has been strong and the excess acid produced has been sold into the DRC and Zambia.

The study into producing electro-won zinc from the oxide dumps at Sable proved viable and construction of a zinc oxide leaching from a solvent extraction and electro-winning plant was commenced during the year at a forecast cost of between $4 million and $5 million. This plant is to be commissioned during the last quarter of calendar 2007 at a scale of approximately 5 000 tons per annum of zinc metal. The study on the sulphide dumps is continuing and a decision on the viability of that dump is anticipated during the year. The operating staff and contractors at all three operations are to be commended on a successful year.


3. INDUSTRIAL MINERALS DIVISION (Vergenoeg and Consolidated Murchison) The expansion at Vergenoeg was completed during the

year resulting in increased production to design capacity of 180 000 tons per annum. Investigations into the possibility of a further expansion of approximately 70 000 tons per annum are in progress. This additional material would be used to supply an aluminium fluoride plant, investigations into the viability of which are in progress. The fluorspar market remains firm.

The Consolidated Murchison division had a disappointing year due to the loss of a major high grade stope which reduced both antimony and gold production for the year. An aggressive development programme was initiated a year ago aimed at increasing the mineable reserves available and improving stope flexibility. This programme which is of an 18 to 24 month duration is beginning to bear fruit. Industrial action after year-end unfortunately resulted in the loss of approximately five weeks of production. This has been satisfactorily resolved and at the end of October, the mine was back at full production. The antimony market remains firm. China, the major world producer of antimony is increasing its demand resulting in less material available for export and so potentially increasing prices.

4. GOLD DIVISION – PAN AFRICAN RESOURCES PLC (PAF)

During the year, the Group completed a reverse take over of Pan African Resources (Symbol: PAF), an AIM listed gold

exploration company in London. The sale of the Group’s share in Barberton Mines (Pty) Limited into PAF resulted in Metorex holding 55% of the AIM- listed company. Simultaneously with the transaction, PAF was listed on the AltX exchange in South Africa. This transaction creates a gold producer combined with a gold exploration company which is unique compared with its peers in both the gold exploration and gold mining sectors by combining gold production with a series of exploration projects at various stages of development.

The transaction was completed in July 2007 with the integration and completion of the company’s management and reporting procedures being envisaged by the end of the calendar year.

The exploration portfolio includes projects in Mozambique, Central African Republic (CAR), Ghana and South Africa. Of these the Mozambique project is the most advanced, being at pre-feasibility stage. In fill drilling is currently in progress with a decision on the project viability due this financial year.

The CAR project lies within a geologically interesting environment and although it is a high cost programme, the potential rewards are exciting and initial indications have been encouraging.

The Ghana and South African programmes are in progress and will be reported on as results arise.

CHAIRMAN’S REVIEW: continued

HEADING


The PAF share on the AltX has shown consistent growth since first listing and currently represents the largest market capitalisation on that exchange.

5. NEW PROJECTS DIVISION (INCLUDING EXPLORATION)

During the course of the year a New Projects Division was established in order to accelerate the search for projects suitable to Metorex and in addition, to ensure that the exploration on the various projects held by the company were conducted efficiently. This division has enhanced the Group’s mining, geological and metallurgical skills and brings a significant new dimension to the company’s capability.

Drilling of the Musonoi project in the Kolwezi area adjacent to the KOV open pit has produced some encouraging results. Exploration at Sokoroshe in the DRC and Chifupu and Kasempa in Zambia is continuing.

6. CORPORATE GOVERNANCE The Group strives to conduct its affairs in accordance

with sound corporate governance. It is committed to a number of programmes which ensure both sustainable development and that the Group’s social responsibilities are met. A number of highly successful initiatives are in place at the various locations at which the Group operates.

7. BEE INITIATIVE Full details of the Group’s BEE initiatives are

contained in the body of this report and it is pleasing to note that within the communities, within which Metorex operates, there are strong and constructive links at all levels at both community and local governments.

8. ACQUISITION OF COPPER RESOURCES CORPORATION (CRC)

The acquisition of CRC, an AIM-listed company holding mineral leases and exploration ground in the DRC was initiated prior to year-end and completed subsequent to year-end. The acquisition of a 39% shareholding in the company from the Forrest Group was finalised in September 2007 and will require a minority offer to be made to the remaining shareholders which is planned in the forthcoming month. This acquisition from the Forrest Group in the DRC adds materially to the Group’s gross copper resources increasing them by some 2,4 million tons of contained copper. These resources are contained in three separate orebodies, namely the Kinsenda mine, the Lubembe project and the Musoshi mine. The Kinsenda mine has a reserve of 11,3 million tons at 5% copper and was closed


CHAIRMAN’S REVIEW: continued

in the late 1980s due to political problems in the DRC. It has remained dormant since then and is a priority target to reopen as soon as practical. The Lubembe exploration project contains approximately 50 million tons at 2,5% copper which represents the largest copper resource Metorex would hold and is an exploration priority which would lead to early exploitation if the drilling results are positive. The Musoshi mine was closed in the late 1980s and needs further investigation to establish whether its re-opening is viable or not.

9. COMMODITY PRICE FORECAST The sustained level of growth in the North American and

European economies, combined with the high growth rates in the Chinese, Indian and Asian economies have led to a tight balance between supply and demand in the commodities produced by this company and in general terms, across the spectrum of commodities that are produced on a world-wide basis.

Industry commentators believe the supply deficit will continue due largely to the long lead time necessary to place significant new production on stream. In particular, the future prices for copper and zinc remain at encouragingly high levels both in the short and medium term. The industrial minerals sector is similarly in a tight supply/demand balance with fluorspar and antimony prices likely to remain at current levels for the medium term. The enigmatic gold price continues to excite investors and the strategic decision to grow the gold portfolio has been reinforced by the addition of a series of exploration projects to the Group. Industry forecasts suggest a continued level of a firm gold price, partially linked to dollar weakness. Metorex concurs with this view. At current price levels and provided these continue, the Group’s profitability based on commodity prices, remain strongly positive.

10. FUTURE PROSPECTS The combined potential output from our existing operations

and the re-opening of the CRC resources will lead to a company capable of producing between 100 000 and 140 000 tons of copper per annum in the medium term.

The organic growth of copper production within the group is thus assured for the forthcoming three year period exclusive of any acquisitions.

The strategic vision of a multi-commodity mid-tier company with independent self-sufficient Base Metal, Industrial Minerals and Gold Divisions remains the overall blueprint for the future and acquisitions are being sought in each of these divisions.

In summary, the current commodity prices, the organic expansion opportunities in progress within the existing portfolio and future acquisition potential position the company well for significant growth in the most exciting commodity price cycle that has been experienced.

11. APPRECIATION We wish to welcome George Forrest (Snr) who joins

the Board as a result of the CRC acquisition. Mr Forrest brings to the Group a wealth of experience both in the DRC and the minerals sector in general and we look forward to our association with the Forrest Group.

The Board joins me in extending our thanks and appreciation to all staff, contractors and consultants who have provided services to the Group during the year and for the constructive contribution made to the development of the company.

To my colleagues on the Board, I extend my appreciation for your sound advice during an exciting year as we look forward to further growth as the various projects mature.

A S MALONE

Chairman


STATISTICAL INFORMATION

Commodity sales statistics

Commodity Unit 2007 2006

Copper (t) 17 107 8 369

Cobalt (t) 129 —

Gold (kg) 3 332 3 777

Antimony (mtu) 371 061 585 600

Fluorspar (all grades) (dmt) 181 286 158 285

Average commodity prices achieved

Commodity Unit 2007 2006

Gold $/ozR/kg

581134 006

508104 724

Antimony ($/mtu)(R/mtu)

54390

44283

Fluorspar (all grades) ($/t)(R/t)

1741 246

155994

Copper ($/t)(R/t)

7 06650 735

5 51435 287

Exchange rate (average)Exchange rate (year-end)

R/$R/$

7,27,0

6,47,2

Capital expenditureThe Group’s capital expenditure by company and project is tabled below:

Company Description2007R000

2006 R000

Pan African Resources Plc – Plant, equipment and development 22 834 12 633

Vergenoeg Mining Company (Pty) Limited – Mineral rights– Plant, equipment and machinery– Land/Building and infrastructure– Other

52318 791

625874

—13 5623 6912 521

Consolidated Murchison Division – Plant, machinery and development– Other

25 090813

8 0382 086

Chibuluma Mines plc – Plant, machinery and development 78 791 62 017

Ruashi Mine sprl and Sable Zinc Kabwe Limited

– Capital WIP– Plant and equipment– Other

575 83460 1906 397

243 070——

Metorex Limited – Furniture and office equipment 180 170

Total capital expenditure for the year (excluding mineral rights from acquisitions) 790 942 347 788

In addition, mineral rights totalling R730 million arose from the minority interest acquisitions in Barberton Mines (Pty) Limited, Chibuluma South Mine Limited and Ruashi Holdings (Pty) Ltd.


CHIEF EXECUTIVE OFFICER’S REPORT

Charles Needham, CEO of Metorex, said: “We are most pleased with the results for the year. The Group companies have generally performed well and the corporate activity provides a platform from which the Group can grow both internally and through acquisitive activity. Whilst copper is currently the major contributor to earnings and activities, the strategy of being a mid-tier multi-commodity mining group is unchanged.”

Safety and training The Group conducts its activities with due regard for the safety and health of its employees and runs approved training programmes through its respective training centres.

The Group is pleased to report that it experienced no fatalities

during the past year.

Operating performance and financial reviewThe Group’s Base Metal division, comprising Chibuluma and Ruashi/Sable, was the main contributor to EBITDA, which is expected to further increase during the forthcoming year with the commissioning of the Ruashi Phase II project in January 2008. Vergenoeg produced an 88% increase in EBITDA following its expansion announced in 2006. The Consolidated Murchison and Barberton combined results were reasonable, mainly supported by increased commodity prices. These operations were affected by erratic grades both in antimony and gold, which variability is a feature of the Greenstone Belt.

Excluding the new projects, the year-on-year operating costs increased by 14%, which included volume increases at both Chibuluma and Vergenoeg.

The Group’s balance sheet has been strengthened by the cashflow generation from operations and the effects of the corporate activity during the year. The debt/equity ratio increased from 2% to 17% due to bridging finance drawdowns

for the development of the Ruashi Phase II project.

Capital expenditure and commitments Group capital expenditure totalled R790 million (2006: R479 million), largely related to the Ruashi Phase II project and the Chibuluma South decline development. The acquisitions of minority interests in Chibuluma, Barberton and Ruashi accounted for an increase of R730 million in Mineral Rights.

Contracted capital commitments at 30 June 2007 amount to R717 million (2006: R33 million), whilst uncontracted commitments amount to R31 million (2006: R38 million).

Operating lease commitments, which fall due within the next year, amount to R10 million (2006: R9 million), whilst commitments of R10 million (2006: R8 million) fall due

during the next four years.

Corporate activity The following corporate activity occurred during the 2007 financial year:

• Acquisition of Crew’s 20% interest in Barberton Mines (Pty) Ltd for R84 million;

• Acquisition of the Industrial Development Corporation’s 35% interest in Chibuluma South for US$21,4 million;

• Disposal of entire 74% interest in Wakefield for R338 million;

CHARLES NEEDHAMChief Executive Officer


• Acquisition of Sentinelle’s 16% interest in Ruashi Holdings (Pty) Ltd for R327 million; and

• Reverse acquisition of Pan African Resources Plc, with an effective date of 24 July 2007.

Subsequent to year-end, agreement has been reached for the acquisition of a 39% interest in Copper Resources Corporation (“CRC”) (“the transaction”). A definitive, unconditional share purchase agreement was signed between Metorex and the Forrest Group on 14 September 2007. This agreement encapsulates the acquisition by Metorex of all the Forrest Group's interests in CRC. Metorex is proceeding with the mandatory offer to minority shareholders as required by the Articles of Association of CRC. The requisite South African

Reserve Bank approval has been obtained.

Future prospects The Group remains committed to its strategy of being a leading mid-tier multi-commodity mining group, focused on quality, long-life ore bodies in sub-Saharan Africa.


CHIEF EXECUTIVE OFFICER’S REPORTREVIEW OF OPERATIONS

BASE METALS

COPPER REVENUE

Copper51%

Other

COPPER: JULY 2006 – JUNE 2007

8 000

7 500

7 000

6 500

6 000

5 500Jul06

LME (US$/ton)

Aug06

Sep06

Oct06

Nov06

Dec06

Jan07

Feb07

Mar07

Apr07

May07

Jun07


Chibuluma Mines Plc (“Chibuluma”)

Profile

The Group’s base metal activities consist of Chibuluma South, its copper producing mine in Zambia, Ruashi Mining sprl, its copper and cobalt business in the DRC, and Sable Zinc, situated in Kabwe, Zambia. Chibuluma South is located on the Zambian Copperbelt, close to the town of Kalulushi, north of the Zambian capital of Lusaka.

ManagementEdward Mounsey General Manager

Malcolm Bullock Financial Manager

Jan TrouwMining Manager

Derick OliviaEngineering Manager

Dr Chris Kawesha Chief Medical Officer

Chibuluma Mines Plc 2007 2006

Tons milled (t) 503 880 363 311Headgrade (%) 2,5 2,7Overall recovery (%) 86,1 81,6Copper produced (t) 10 770 8 002Copper sold (t) 10 761 8 017Average copper price ($/t) 7 148 5 427Total cash cost/ton sold ($/t) 2 787 2 984EBITDA (R000) 323 022 125 521Capital expenditure (R000) 78 791 62 017Depreciation (R000) 36 011 16 916

Business reviewChibuluma South Mine operated 5% above its design capacity of 40 000 tons per month of ore milled. The grade has continued to be affected by the waste parting, but the headgrades are improving with depth. The concentrator operated efficiently with an improvement in recovery from the previous year. The first full year at capacity resulted in a 35% increase in copper production. The operating costs were well controlled with the resultant EBITDA increasing by 157%, which was assisted by robust copper prices.

Capital expenditure was spent primarily on the continued decline development required for access to the lower levels of the orebody.

Chibuluma production expansion The Chibuluma South Mine is increasing its monthly mill throughput from 40 000 tons to 50 000 tons, reaching steady state by December 2007. This should increase the Chibuluma copper production by a further 25%, the full effect of which will be felt in the 2008/2009 financial year and partially in the 2007/2008 financial year.

Future prospectsChifupuThe Chifupu deposit situated less than 5 km south of Chibuluma Mine, being a copper oxide deposit, has been drilled to establish the ore resource and a feasibility study is being prepared on the establishment of a mining operation at Chifupu. The ore can

Directors

C D S Needham (Chairman)

K C Spencer (Managing)

J Makumba

D H Littleford

A S Malone

L Nkhata

be treated at the Chibuluma Mine concentrator and will provide feed for the Sable Processing Facility. This feasibility study should be complete by the end of the 2007 calendar year.

Kasempa Exploration drilling and evaluation has commenced. The programme is in its early stages and should be complete within six months at a capital cost of approximately US$1,3 million.


BASE METALS

CHIEF EXECUTIVE OFFICER’S REPORTREVIEW OF OPERATIONS: continued

COPPER REVENUE

Copper51%

Other


8 000

7 500

7 000

6 500

6 000

5 500Jul06

LME (US$/ton)

Aug06

Sep06

Oct06

Nov06

Dec06

Jan07

Feb07

Mar07

Apr07

May07

Jun07


Sable Zinc Kabwe Ltd (“Sable”)

Profile

Sable Zinc Kabwe Limited is located approximately 2 km south of the Kabwe town centre in the Central Province of the Republic of Zambia, some 150 km north of Lusaka. The processing facility is situated close to the main road as well as the main railway line between the Copperbelt and Lusaka and is accessed via a tarred road.

ManagementDavid Littleford General Manager

Punit Sharma Financial Manager

Benson KaachaElectrical Engineer

Allan McInnesMaintenance Engineer

Gareth Thompson Divisional Financial Controller

The performance of Ruashi and Sable iss being dealt with in combination due to the nature of the production relationship, with the final copper and cobalt product being produced out of Sable.

Ruashi/Sable Zinc Kabwe 2007†

Tons milled (t) 473 090Headgrade – Copper (%) 2,9Recovery – Copper (%) 46Copper produced (t) 6 361Copper sold (t) 6 346Cobalt produced (t) 132Cobalt sold (t) 129Total cash cost/ton of copper, net of cobalt ($/t) 4 957EBITDA (R000) 83 624Capital expenditure (R000) 642 421Depreciation (R000) 21 805†First year of production.

Business reviewThe Sable processing complex at Kabwe in Zambia was commissioned during May 2006 and has been producing a combination of standard and A-grade copper cathode since that date from purchases of copper and cobalt concentrate from Ruashi Phase I as well as third-party material. The leach and electro-winning circuits are commissioned and operational with the solvent extraction plant having been commissioned in September 2007, enabling it to process the Ruashi concentrates on arrival.

The acid plant has been successfully commissioned subsequent to year-end.

DirectorsC D S Needham (Chairman)

D H Littleford (Managing)

A S Malone

D A R Phiri

Future prospectsZinc plant in Kabwe The Zinc leach and electro-winning plant is nearing completion and is planned to be commissioned during October 2007. This plant is designed to produce 5 000 tons of zinc per annum at a cash cost of less than US$1 500/ton of zinc produced. The capital cost of this plant is estimated at US$5 million.


BASE METALS


COBALT REVENUECobalt 2%

Other

COBALT: JULY 2006 – JUNE 2007

35

30

25

20

15

10

5

0Jul06

Close (US$/lb)

Aug06

Sep06

Oct06

Nov06

Dec06

Jan07

Feb07

Mar07

Apr07

May07

Jun07


Ruashi Mining sprl (“Ruashi”)

Business reviewThe treatment of the Ruashi stockpiles and commissioning of the Ruashi Concentrator and Sable Processing Facility commenced during the current financial year. The average headgrade of the stockpiles treated exceeded original expectations, but the ramp-up in tons milled was slower than expected. Metallurgical balancing problems resulted in recoveries below budgeted levels, with the resultant copper production being 64% of design capacity. Focus has been on copper production with the result that the cobalt production for the financial year of 132 tons was well below design capacity. The operating cost per unit of copper produced exceeded expectation during this first year of production due to the low volumes treated. The contribution to EBITDA for the year amounted to R83,6 million.

Capital expenditure of R642 million was largely attributable to the construction of the Ruashi II processing facility due for commissioning in January 2008.

Production for the forthcoming year is expected to increase with the contribution from the Ruashi II project for a six-month build-up period to June 2008, which will increment production from the Ruashi Phase I concentrator.

Future prospectsDRC – copper/cobalt Ruashi Phase II Project

The construction of the Ruashi II Copper/Cobalt SX/EW

treatment facility is progressing according to plan with first

copper expected to be produced in January 2008. The

total expenditure on this project is estimated to be US$180

million, which includes working capital of US$8,2 million.

Stripping of the orebodies has commenced and the first

level of mineralisation has been exposed. Production from

Profile

Ruashi Mining sprl, the Group’s copper and cobalt business, registered in the Democratic Republic of the Congo, is situated 10 kilometres from Lubumbashi in the Katanga Province, in the south of the Democratic Republic of the Congo.

Ruashi Mining sprl, owned 80% by Ruashi Holdings (Pty) Ltd and 20% by state-owned Gecamines (La Generele des Carrieres et des Mines), is the operating company in the DRC.

ManagementGrant Dempsey General Manager

Trevor FaberRuashi Phase II Project Manager

Paul InbonaFinancial Manager

Gareth Thompson Divisional Financial Controller

MembersC D S Needham (Chairman)

E W Legg

Dr M Mutamba

K wa Kalwa

K Umba

K Kasakoto


BASE METALS


COPPER REVENUE

Copper51%

Other


8 000

7 500

7 000

6 500

6 000

5 500Jul06

LME (US$/ton)

Aug06

Sep06

Oct06

Nov06

Dec06

Jan07

Feb07

Mar07

Apr07

May07

Jun07


the open pits is planned for October 2007. The project financing facility for the Ruashi II programme has had approval from the Standard Corporate and Merchant Bank of South Africa, backed by ECIC cover for an amount of US$155 million. The balance is to be provided by internal resources. Staffing for the new project is gaining momentum and the design capacity of 120 000 tons per month milled at a copper headgrade of approximately 3,5% will yield 45 000 tons of copper and 3 500 tons of cobalt per annum. Strategically, the decision was taken to operate the Phase I plant together with the Phase II plant. This would increment the Phase II production by 10 000

tons of copper and 800 tons of cobalt per annum.

Copper Resources Corporation (“CRC”) Metorex has reached agreement with the Forrest Group of companies to acquire their 39% interest in Copper Resources Corporation. This purchase consideration is to be settled by way of an issue of Metorex shares and triggers a Minorities Offer. A Minorities Offer document is being prepared for distribution to minority shareholders towards the end of October 2007. The Articles of Association of Copper Resources Corporation require that any offer to minorities be underpinned by a cash offer. The Board of Metorex has submitted a circular to shareholders requesting authority for a general issue of shares for cash, which resolution had been duly passed.

The CRC assets comprise the Kinsenda Mine, placed on care and maintenance, the Mushoshi Mine, placed on care and maintenance and the Lubembe copper deposit. In addition to this, CRC has rights to the Hinoba-An deposit in the Philippines. Independent Australian consultants have prepared a Bankable Feasibility Study on the reopening of the Kinsenda Mine, which has been released to the public by CRC in various press releases. On completion of the transaction Metorex will revisit the Bankable Feasibility Study with regard to the capital cost and timing of commissioning the Kinsenda Mine and concentrator. A phased approach will be adopted whereby the Kinsenda Mine is the primary target to be followed by exploratory work on the Lubembe deposit and a further review of re-establishing the Mushoshi Mine.

Musonoi/Sokoroshi Exploration A drilling programme has been completed on Sokoroshi II with limited success but a comprehensive drilling programme is underway on the Musonoi exploration programme with 3 000 metres having been completed. The results to date on Musonoi have been encouraging but further confirmatory drilling, sampling and assay work is required.

Ruashi Mining sprl (“Ruashi”) continued

A strategic planning session is to be held regarding the continued operation of the Phase I plant together with the Phase II plant to provide an incremental 10 000 tons copper and 800 tons cobalt per annum.


GOLD

Profile

Pan African is a mid-tier explorer and producer focused on the acquisition and development of a portfolio of gold deposits in favourable areas of Africa to enhance shareholder value, which adds considerable value to the Metorex Group’s gold portfolio.



Pan African Resources plc ("Pan African Resources")

Business reviewBarberton Mines is a 74% owned subsidiary of Pan African Resources, a company listed on both the AIM Market of the London Stock Exchange and on the Alternative Exchange of the JSE Limited. Metorex has a 55% interest in Pan African Resources. Pan African Resources is a gold exploration company, which through the acquisition of Barberton has a gold producer and cash flow generator. Pan African Resources’ main areas of exploration activity are presently in Mozambique, Central African Republic and Ghana. The most advanced of these exploration projects is the Manica project in Mozambique, which has an independently established ore resource of 1,5 million ounces of gold in situ. A pre-feasibility study is being prepared for the establishment of a gold mine in Mozambique at a capital cost of approximately US$68 million to produce 86 000 ounces of gold per annum for an eight-year period. This pre-feasibility study should be complete by the end of calendar 2007. The Central African Republic exploration projects (being the Bogoin and Dekoa projects) are presently being evaluated to establish whether this geological region is an extension of the Tanzanian and DRC gold-bearing Greenstone Belts. Exploration drilling has commenced on the Bogoin exploration licence and regional soil sampling has commenced on the Dekoa project.

The Ghanaian mining exploration licences have been secured and exploration activities are due to commence during this financial year.

ManagementJan Nelson Chief Executive Officer

Keith Spencer Metorex Executive Director

Eduard Victor Finance and Administration Manager


GOLD


GOLD REVENUE

Gold26%

Other

GOLD: JULY 2006 – JUNE 2007

700680660640620600580560540520500

Jul06

London PM (US$/oz)

Aug06

Sep06

Oct06

Nov06

Dec06

Jan07

Feb07

Mar07

Apr07

May07

Jun07


Barberton Mines (Proprietary) Limited (“Barberton”)

Barberton 2007 2006 2005 2004Tons milled (t) 330 367 313 779 316 094 349 219Headgrade (g/t) 9,2 10,7 11,1 10,4Overall recovery (%) 92 92 92 91Produced (kg) 2 800 3 088 3 230 3 305Sold (kg) 2 786 3 108 3 201 3 321Average price: Spot (R/kg) 148 230 108 683 86 265 88 133 Hedge (R/kg) 96 088 90 047 101 890 100 900Total cash cost/kg sold (R/kg) 107 656 88 177 85 073 75 460EBITDA (R000) 79 965 58 291 56 494 129 132Capital expenditure (R000) 22 834 12 487 11 796 12 633Depreciation (R000) 30 056 24 452 23 432 22 886

Business reviewThe tonnage milled for the year increased by 5%, however the headgrade declined by 14%, which is a function of mining in the Greenstone Belt. The processing plants operated efficiently and the company produced 2 800 kg of gold for the year. The cash cost per kilogram of gold sold increased by 22%, which was largely the result of the lower headgrade. Should the headgrade have been maintained at the same level as the previous year the increase in cost per kilogram sold would have amounted to 7% for the year.

The EBITDA for the year increased by 37% from that of the previous year.

The capital expenditure for the year was spent on upgrading of underground equipment and accelerated underground development to enable improved grade controls.

The Company has commenced development into and re-equipping of previously mined adits in order to exploit known ore resources. This programme will take place over a period of approximately two years.

Profile

The Group’s gold-mining activities are conducted in the Barberton Area of the Mpumalanga Province. Barberton consists of three operating mines: Sheba, New Consort and Fairview. The group’s total mineral reserves approximates 2,0 million tons and 14 000 kg of gold, whilst total mineral resources are more than 9,2 million tons and 59 000 kg of gold.

ManagementCasper Strydom General Manager

Craig de Billot Finance and Administration Manager

Pierre Human Technical Manager

Dario NegriEngineering Manager

André van den Bergh Human Resources Manager

Gerbrand van Heerden Divisional Financial Controller


K C Spencer (Managing)

A S Malone

M C Ramaphosa

R M Smith (Alternate)


INDUSTRIAL MINERALS


FLUORSPAR REVENUE

Fluorspar 13%

Other

FLUORSPAR: JULY 2006 – JUNE 2007

186

184

182

180

178

176

174

172

170Jul06

AVE (US$/ton)

Aug06

Sep06

Oct06

Nov06

Dec06

Jan07

Feb07

Mar07

Apr07

May07

Jun07


Vergenoeg Mining Company (Pty) Ltd (“Vergenoeg”)

Profile

Vergenoeg is the world’s largest fluorspar resource with a lifespan of 100 years at current production rates. Situated 150 kilometres north of Johannesburg, the company boasts a state-of-the-art concentrator enabling it to meet market demand. The company’s resources, excluding reserves, total 207,8 million tons. The Group’s partner, Spanish-based Minerales Y Productos Derivados SA, also provides the company with advice on metallurgical processes.

ManagementD A CookeGeneral Manager

Flip Opperman Finance and Administration Manager

Hugo Pretorius Engineering Manager

Hennie TerblancheMining Manager

Greg Brooker Metallurgical Manager

Gareth Thomson Divisional Financial Controller

Vergenoeg 2007 2006 2005 2004

Tons milled (t) 561 366 470 623 428 976 455 032CaF2 grade (%) 42,6 43,3 42,6 40,7CaF2 recovery (%) 70,9 73,7 70,8 68,8Fluorspar produced (all grades) (dmt) 183 199 156 692 143 086 128 660Fluorspar sold (all grades) (dmt) 181 286 158 285 141 438 139 946Average price (all grades) (R/dmt) 1 246 989 868 797Total cash cost/ton (R/t) 811 755 776 701EBITDA (R000) 83 683 44 600 22 642 15 932Capital expenditure (R000) 20 813 19 774 5 352 4 440Depreciation (R000) 9 002 8 171 7 130 6 526

Business reviewThe plant expansion at Vergenoeg completed in the previous financial year resulted in a 17% increase in production of fluorspar for the year. The plant performed efficiently and the unit cost of production increased largely in line with the inflation rate. The EBITDA for the year of R84 million increased by 88%, which was assisted by an increase in the fluorspar prices in Rand terms.

The capital expenditure for the year was largely applied to the plant improvements and to earth-moving equipment upgrades.

Future prospectsA study is in progress with regard to increasing the fluorspar production by a further 40% to position Vergenoeg as a supplier to a proposed hydrofluoric acid and aluminium fluoride plant to be located and erected in South Africa. Vergenoeg is involved in a feasibility study with two partners regarding the establishment of this plant. The fluorspar feed to this plant will be approximately 70 000 tons of acid-grade fluorspar per annum.


E W Legg (Managing)

J S Alonso

A Barrenechea

D A Cooke (Alternate)

A S Malone


INDUSTRIAL MINERALS


ANTIMONY REVENUEAntimony 8%

Other

ANTIMONY: JULY 2006 – JUNE 2007

5 550

5 500

5 450

5 400

5 350

5 300Jul06

Close (US$/ton)

Aug06

Sep06

Oct06

Nov06

Dec06

Jan07

Feb07

Mar07

Apr07

May07

Jun07


Consolidated Murchison Division ('Cons Murch') (“a div is ion of Metorex Limited”)

Profile

Situated at Gravelotte close to Phalaborwa in the Limpopo province, Cons Murch is the single largest antimony orebody known in the world, having produced in excess of nine million tons of high-grade stibnite ore. Gold is produced at Cons Murch as a co-product of antimony.

ManagementZieg Barnard General Manager

Alan Dods Divisional executive

Willem Bodenstein Financial Manager

Colin WilsonTechnical Service Manager

Koos Venter Metallurgical Manager

Cons Murch 2007 2006 2005 2004Tons milled (t) 420 381 447 547 437 798 475 601Produced: Sb (mtu) 377 998 576 317 502 194 522 238

Au (kg) 548 675 672 718Sold: Sb (mtu) 371 061 585 600 500 021 520 976

Au (kg) 546 669 671 706Average price: Sb ($/mtu) 54,0 44,2 30,7 24,9

Au ($/oz) 597 560 416 386Total cash cost/mtu sold* (R/mtu) 276 209 194 191EBITDA (R000) 16 991 43 829 (6 117) (12 892)Capital expenditure (R000) 23 155 10 124 2 877 1 133Depreciation (R000) 5 800 3 769 3 420 3 730

*Net of gold revenue

Business reviewConsolidated Murchison had a disappointing year with the gold and antimony grades having temporarily declined, resulting in reduced production. These grades resulted in an increase in unit costs of production and a reduction in the EBITDA from R44 million to R17 million for the year.

Capital expenditure for the year was applied to plant improvements and underground development to expose additional ore reserves.

Future prospectsA deep-level exploration drilling strategy has been initiated in order to prove up extensions of the orebody below the current shafts levels. In addition, exploration drilling is underway at the mothballed Alpha/Gravelotte shafts that are known to have been high in antimony.

Executive CommitteeC D S Needham (Chairman)

A S Malone

K C Spencer

A Dods (Managing)


CHIEF EXECUTIVE OFFICER’S REPORT

SUSTAINABLE DEVELOPMENT AND GROUP CORPORATE SOCIAL RESPONSIBILITY

Africa has many issues facing it today. The numerous social,

environmental and transformation considerations have placed

great importance on business’ ability to respond to these

issues and adapt their practices.

In the past year, we have paid close attention to the above

issues, and this report includes some of our achievements in

this regard.

Sustainable developmentThe term “sustainable development” refers to economic

development that “meets the needs of the present without

compromising the ability of future generations to meet their

own needs.”

At Metorex, we strive to ensure that our social, ethical

and environmental management practices contribute to our

sustainability. Sustainable development is embedded in each

of our strategies. To this end, we are continually finding ways

to balance the need for short-term corporate competitiveness

and financial return, with the need to continue as a going

concern in the long term.

From an operational point of view we have established a

diversified commodity portfolio of mining operations that

generates strong cashflows, thereby providing the platform

for the development of future growth targets. The Group’s

repositioning in focusing on long-life, high-margin projects,

together with continued internal expansion, reflected itself in

significantly increased earnings. This direction contributes to

the Group’s mission of sustainable development, reinforced

by the robust commodity environment.

Corporate Social Responsibility (“CSR”)At Metorex, we accept our responsibility to assist in addressing

the socio-economic challenges that face our continent. We

have undertaken numerous projects in order to provide

meaningful opportunities to previously disadvantaged

individuals, especially to those communities that are located

near our operations.

The following activities and projects by subsidiaries have been

undertaken during the past financial year:

Barberton Mines (Pty) Ltd

At Metorex, we strive to ensure that our social, ethical and environmental management practices contribute to our sustainability. Sustainable development is embedded in each of our strategies. To this end, we are continually finding ways to balance the need for short-term corporate competitiveness and financial return, with the need to continue as a going concern in the long term.

Project focus area

Locality of the project

Target groups(Beneficiaries)

Family housing at Consort Section

Infrastructure and job creation

Converting the single sex hostel at Consort into a cluster type security village for employees

Consort Section – Umjindi Municipal area

852 individuals

Assisting council with the establishment of formal roads in Verulam settlement

Infrastructure and job creation

Opposite Fairview Section in the Umjindi Municipal area

700families

Project focus areaProject focus area

Locality Locality of the of the projectproject

Target groupsTarget groups(Beneficiaries)(Beneficiaries)


Project focus area



ABET to the community

Education and job creation

Umjindi Municipal Area

• Spouses of employees working at the mine

Extend company’s in-house ABET programme

• Surrounding community (Sinqobile, Toronto and Sheba Siding)

Life skills centre at Verulam (sinqobile)

Education and job creation

Brick making, bread baking, sewing, fence making and welding

“Verulam” or Sinqobile Township

• All interested employees, medically incapacitated employees and spouses of employees staying in the married quarters at the mine

• The surrounding communities, i.e. Verulam, Toronto and Sheba Siding

Accommodation for parks board rangers

Infrastructure and tourism

Sheba and Fairview Sections

Parks board game rangers

Tourism venture

Infrastructure, job creation and tourism. Barberton Mines pays the salary of one Trainee Tourism Officer (Fikile Soko) employed at the local Tourism office

Management time spent at the office: 4 to 6 hours a month

Barberton and surrounds

Community

St John’s mission and care centrePalliative Care St John’s

Mission, Barberton

Mine employees and their immediate families, as well as members of the surrounding communities

Barberton Mines (Pty) Ltd continued

Project focus area



Primary schools at Consort, Sheba and Fairview SectionsEducation, infrastructure, maintenance and support

Fairview, Sheba and Consort Sections

Community

Pre-primary school at Consort, Sheba and Fairview SectionsEducation, infrastructure, maintenance, support and provision of food

Consort, Fairview and Sheba Sections

Employees’ children as well as the community

Ambulance and first aid serviceProvide service to local schools during sporting events

Barberton Community

Umjindi jewellery projectBeneficiation Barberton Community

Consolidated Murchison Division

Project focus area



Khomelelani community project• Three HDSA women

registered their own cc and also employ two other woman to assist (Total of five people)

• Provide food to possible 700 employees

Hostel kitchen Mine employees and their families. To later expand to the greater Gravelotte community

Greenery/food security gardens• This project will initially

create jobs for ten women

• The mine will supply infrastructure i.e.– 2,2 hectares of land– Tractor, driver and diesel– Water lines and water supply

(irrigation) – Seed

2,2 hectares of land on mine’s property (land behind the hostel and Piet Marais game farm)

Greater Gravelotte community

Barberton Mines (Pty) Ltd continued



Target groupsTarget groups(Beneficiaries)(Beneficiaries) Project focus areaProject focus area


Target groupsTarget groups(Beneficiaries)(Beneficiaries)


Locality Locality of the of the Locality Locality of the Locality Locality

projectprojectTarget groupsTarget groups(Beneficiaries)(Beneficiaries)Target groupsTarget groups(Beneficiaries)Target groupsTarget groups


Corporate social responsibility can be defined as “the commitment of business to contribute to sustainable development, working with employees, their families, the local community and society at large to improve the quality of their lives, in ways that are both good for business and good for development.”

SUSTAINABLE DEVELOPMENT AND GROUP CORPORATE SOCIAL RESPONSIBILITY: continued

Project focus area



BBR Nyathi healthcare – 24 hours clinic facilityWhile essentially providing medical (as opposed to surgical) beds, it can in addition become a community healthcare nucleus with the following facilities/services:• A clinic for

chronic diseases management

• Facilities for training, counselling and management e.g. HIV/Aids

• A base for homecare nursing

• Training of healthcare workers

• Primary healthcare clinic

• Maternity clinicThe clinic employs 12 people

On mine property

• Mine employees

• Greater Gravelotte community

Vision Fet College 2000• Employs 8 lecturers

who lecture Engineering N2 – N6;Mining N2 – N6;Computer Diploma and Grade 12 classes

Training centre • Mine employees

• Greater Gravelotte Community

Project focus area



Mine school bus to schools in Phalaborwa

• Bus driver At mine • Employees’ children

• Contractors’ children

• Private people renting houses’ children

Water supply to Ba-Phalaborwa municipality• A boilermaker,

1 fitter operative, 3 aids and 13 pump attendants employed in the water services department (19 employees)

• Supply ± 12 660 Kl water to Gravelotte reservoir @ R2,96 Kl (VAT incl)

• Maintenance of pumps, pipes, meters

Letaba River pump stationMulati pump stationMine

• Mine• All mine

residents• Farmers along

the pipeline from Letaba pump station

• Gravelotte residents

Consolidated Murchison Division continued








Consolidated Murchison Division continued

Project focus area



Busy-bodies pre-school

Consolidated Murchison Mine

Mine employees’ children and surrounding community

52 children:46 Mine6 Gravelotte

Leseding primary school

Consolidated Murchison Mine

Mine employees’ children and surrounding community

126 children:50 Gravelotte6 Farms70 Mine

Vergenoeg Mining Company (Pty) Limited

Project focus area



Training and education

Bethesda Outreach Ministries – Hammans-kraal

Aids orphans

Pfananani community Metspar production project (wages)

Vergenoeg Mine

Poverty stricken families in the Hammans-kraal area

SMME development – J.L. Maaga

Transport

Daily transport services to and from work

J.L. Maaga Transport and workers of the Pfananani project

Medical clinic Vergenoeg Mine

Company employees

SMME development– staff transportation

to Molotto

Daily transport services to and from work

Mabitsela Transport services

SMME development – subsidised canteen

services outsourced to local BEE group

Vergenoeg Mine

Company employees and local communities

SMME development– scrap removal and

sales awarded to F Dolo

Vergenoeg Mine

Witlaagte community

Project focus area



Education and training

Registration fees and study material for an electrical engineering course at Unisa

Company employee’s child

Occupational centre Donation made to the Kadimah occupational centre

Previously disadvantaged group

Erection of community hall

Witlaagte area

Khwalitho Witlaagte community

Staff transportation Hammanskraal

Daily transport to and from work

Company employees

SMME development – donation of ash

to brickmaker and buy back bricks

Witlaagte Community

Chibuluma Mines plc, Zambia

Project focus area



Mine hospital for employees and local community

Kalulushi Employees and local community

Repair (mending pot holes and grading) of key roads in Kalulushi

Kalulushi Local community and employees

Donations and support to sports and recreation activities

Kalulushi Employees and their families and local community

Donations and support to schools and community social projects

Kalulushi and Lufwanyama

Local schoolswith Kalulushi and Lufwanyama

Construction and tarring of access road from airport road

Junction Airport Road to the mine

The mine and the community

Anti-malaria spraying Kalulushi Employees and their families and local community

Police force assistance Kalulushi and Lufwanyama

Local community and employees

Vergenoeg Mining Company (Pty) Limited continued














Project focus area

Power supply• The mine has installed a 24 Mva transformer at the Zil

substation in town, of which we will ultimately not utilise more than 8 Mva. The balance will be distributed by SNEL to the community of Lubumbashi.

• The mine has donated a localised 500 kva transformer to the Ruashi Township, together with all the auxiliary equipment. This transformer has been installed in the Benakabindi substation, and is providing power to the communities in the immediate surrounding areas.

• A second transformer, also 500 kva, will be installed in the Kawamba substation within the Ruashi Township, and will also benefit the people living in the immediate vicinity.

• A joint project has been initiated with Anvil Mining for the power supply to the Ruashi II processing facility which will also provide power to the people of Lubumbashi. This will convene an additional 500 Mva of power into Lubumbashi, which will be available to SNEL for the distribution of power to the people of Lubumbashi.

Water supply• Power supply from our new supply has been extended

to provide power to the Water Authority of Ruashi for the supply of water to the Ruashi Township. This infrastructure has provided a reliable source of power.

• Boreholes are being drilled and equipped, which will provide an ample water supply to the Ruashi Township. Two holes out of five have been completed; the balance has been planned for the month of April 2008.

• Water is being trucked daily to the Ruashi Township in an attempt to supply the current shortfall of water.

Ruashi Mining sprl Ruashi Mining sprl continued

Project focus area

Environmental• We have planted numerous trees in Ruashi and

around the mine with the full involvement of the local communities and schools.

• We are compliant with international environmental guidelines.

• We have assisted with clean-ups and painting inside the Ruashi Township.

Social• We had the World Cup Soccer screened for the entire

series on a big screen inside the Ruashi Township.

• We have sponsored a local soccer tournament for the children in Ruashi Township.

Employment• We have an employment policy that gives preference to

people from the Ruashi Township.

• Where possible, we utilise manual labour as opposed to machines and in these cases, give preference to artisinal miners.

Economical• We have a policy that gives preference to locally owned

Congolese companies. This generally means that we have to coach and develop local companies, very often at our own short-term expense.

• We have donated funds to the repair of the airport, which will ensure access to Lubumbashi and in return that the economic growth is sustained.

SUSTAINABLE DEVELOPMENT AND GROUP CORPORATE SOCIAL RESPONSIBILITY: continued

Project focus areaProject focus area Project focus areaProject focus area


Project focus area

Values• We try to utilise the local religious missions wherever

possible. We have recently built a wall around the Catholic convent in Ruashi.

• We have assisted with the installation of a power supply to the local Pentecostal Mission.

• We are actively involved in providing schooling through NGOs for the under-privileged children.

• We regularly assist the local tribes in various areas.

Artisinal miners• We are in the process of compensating and relocating

our artisinal miners with a view to having the minimum social impact on the local community.

Sable Zinc, Kabwe

Project focus area

Schools• Financial assistance towards the construction of a

security fence at the Chipembi Girls’ Secondary School.Social• Donation towards the independence celebrations. Water supply• Assistance in the water project: installation of a pump,

erection of a tank and connection to pipework at the Old People’s Home.

• Donations towards the Kabwe District Independence Celebrations Organising Committee.

Culture• Donation towards the Kulamba Kubwalo Lenje Cultural

Ceremony.Women• Donation towards the Commemoration of International

Women’s Day celebrations.

Employee progression on skills development and trainingThe Group accepts its responsibility to assist in addressing the socio-economic challenges that face our country as well as sub-Saharan Africa, where most of our operations are based. We have undertaken numerous projects in order to provide meaningful and useful opportunities to previously disadvantaged individuals, especially to those communities that are located near our operations.

Ruashi Mining sprl continued Broad-based black economic empowerment and the Mining CharterMetorex is committed to the transformation of the South African community through black economic empowerment (“BEE”) and has embraced and accepts the principles of the Broad-based Socio-Economic Empowerment Charter for the Mining Industry (the Mining Charter), as contemplated in section 100 of the Minerals and Petroleum Resource Development Act, Act No. 28 of 2002. The Group is progressing well towards achieving the recommendations of the Mining Charter.

A summary of the South African operations' progress on compliance with BBBEE has been included. Progress is measured on a continual basis.

SCORECARD SUMMARY

Compliance with BEE

Barberton Mines (Pty) Limited

Quarter ending December 2006 71,00Quarter ending March 2007 72,90Quarter ending June 2007 72,90

Consolidated Murchison division


Vergenoeg Mining Company (Pty) Limited


0 – 40%: unacceptable/limited contribution to BEE41 – 65%: acceptable contribution to BEEAbove 65%: commendable contribution to BEE

The Company scorecards are verified on a continual basis. Focus areas are identified and improvements are being progressed.



Barberton Mines (Pty) LimitedBarberton Mines (Pty) Limited

Consolidated Murchison divisionConsolidated Murchison division

Vergenoeg Mining Company (Pty) LimitedVergenoeg Mining Company (Pty) Limited


SUSTAINABLE DEVELOPMENT AND

GROUP CORPORATE SOCIAL RESPONSIBILITY: continued

The road aheadIn order to maintain a sustainable organisation, it is essential that we continue to address our sustainability issues and engage effectively with our stakeholders.

HIV/AidsThe Group understands and recognises that the Human Immunodeficiency Virus (HIV) and the Acquired Immune Deficiency Syndrome (Aids) are serious public health problems. HIV/Aids has serious implications on society, the economy, employment and human rights.

The Group commits itself to the implementation and maintenance of an HIV/Aids programme and policy.

The Group has, therefore, adopted an HIV/Aids policy because it recognises that HIV/Aids is a serious threat to the Group and its employees. The purpose of this policy is to establish a clear frame work within which the Group will manage the HIV/Aids threat in the interest of all concerned.

The objectives of the policy are:

• To outline the HIV/Aids programme;

• To spell out details on employment policies (e.g. HIV testing, employee benefits, performance management and procedures to be followed to determine medical incapacity and dismissal);

• To express standards of behaviour expected of the Group and its employees and appropriate measures to deal with deviations from this standard;

• To spell out the grievance procedure;

• To set out the means of communication within the organisation on HIV/Aids issues;

• To define the details of employee assistance available to those affected by HIV/Aids;

• To provide details of implementation and co-ordination responsibilities; and

• To provide for monitoring and evaluation mechanisms.

The Group’s HIV/Aids policy is based on the following principles:

Legal frameworkThis policy has been compiled taking cognisance of all relevant legislation and specifically the “Code of Good Practice on Key Aspects of HIV/Aids and Employment” provided for in the Employment Equity Act of 1998.

Promoting a non-discriminatory work environmentNo person with HIV/Aids shall be unfairly discriminated against in respect of the employment relationship or within any employment policies or practices;

The Group will adopt appropriate measures to ensure that employees with HIV and Aids are not unfairly discriminated against and are protected from victimisation through positive measures such as:

• awareness, education and training on the rights of all persons with regard to HIV and Aids;

• mechanisms to promote acceptance and openness around HIV/Aids in the workplace;

• providing support for all employees infected with or affected by HIV and Aids; and

• grievance procedures and disciplinary measures to deal with HIV-related complaints in the workplace.


Counselling and testingThe Group rejects HIV testing as a prerequisite for recruitment, access to training or promotion. However, the Group promotes and facilitates access to voluntary counselling and testing (VCT) for all employees.

Confidentiality and disclosureThe Group guarantees confidentiality of any medical information relating to the HIV/Aids status of an employee. Where an employee chooses to voluntarily disclose his/her HIV status to the Group companies or to other employees, this information may not be disclosed to others without the employee’s express written consent.

Occupational health and safetyRisk of HIV infection at the workplace is managed through:

• Standard procedures are applied to reduce risk following injury at work involving blood, potential exposure to blood-borne pathogens, including HIV. Appropriate HIV/Aids information is included in Occupational Health Training, First-Aid Training and Induction Training.

• Emergency care and treatment for the Group’s medical personnel and people performing First Aid in and after medical HIV exposure will be provided.

Performance managementThe Group acknowledges the desire and the ability of HIV-positive employees to work. It, therefore, guarantees that employees living with HIV and Aids may continue to work as long as they are able to perform their duties in accordance with their job requirements.

When, due to medical reasons, employees are no longer capable of effectively performing their duties, the Group shall endeavour to find them alternative employment. Should this not be possible or the employees cannot fulfil their contractual obligations due to prolonged observation or physical incapacity, the Group rules regulating incapacity/boarding shall be applied.

Compensation for occupationally acquired HIVAn employee may be compensated if he/she becomes infected with HIV as a result of an occupational accident, in terms of the Compensation for Occupational Injuries and Diseases Act. The Group will take reasonable steps to assist employees with the application for benefits.

Implementation, co-ordination, monitoring and evaluationThe Group has established a governance structure to implement, co-ordinate, monitor and evaluate the HIV/Aids programme.

Stakeholders

ExternalCollaborative strategies and initiatives will be pursued jointly with other stakeholders (e.g. government departments, contractors, local communities, parastatals, etc) with the intention of having a positive impact on the prevention and management of the pandemic.

InternalThe structure and content of this policy and programme will be developed in association with the appropriate employee representatives.

Education and communication

The Group will provide updated information to all employees and their families to enable them to protect themselves against HIV infection and to cope with the effects of the infection.

The Group will train sufficient peer educators to conduct awareness campaigns and education sessions both at the workplace and in the communities where employees reside.

The Group will provide communication and education material to be used by peer educators.

Grievance procedure

Employees will be informed of their rights and the remedies available to them. The Group will create an awareness and understanding of the grievance procedure and how employees can utilise it.

The Group is committed to reviewing its policy and programme as and when deemed necessary to ensure its effectiveness.

We are also committed to working towards the 2013 milestones set by South Africa’s Mine Health and Safety Council (MHSC), which include a target of zero fatalities and injuries, through constant and continual improvement equivalent to current international benchmarks.

The performance highlights for financial year 2007 from a safety perspective were that the Group experienced no fatalities and commends mine, divisional management and employees for this achievement. For a more detailed analysis of the Group safety statistics refer to page 87, supplementary information.


Managing our impact on the environmentThe Metorex Group acknowledges that the process of mining and metallurgy has a direct impact on the mining site and its surrounds. It is therefore incumbent on the operating company to anticipate, prevent and, as far as possible, mitigate the effects of its actions. Three critical areas in this regard are air, water and land management.

The Group aims to effectively manage its safety, health and environmental relationship through an integrated approach to its stakeholders and the environment in which it operates.

Our operations uphold the Group’s safety, health and environmental policy which provides the framework for best practice. The key commitments of this policy are:• Compliance with all applicable laws, regulations and

standards.• Pollution control and prevention.

• Continual improvements in its safety, health and environmental performance.

The Group is committed to skills development and has training facilities at all its operations with a centralised centre, for more advanced training at Barberton. Use is also made of outside facilities for specialist training.

Environmental management programmes, which are regularly audited and updated, are in place at all the operations. Water management initiatives are in place to conserve water by recycling and eliminating wastage. In the DRC a project has been completed to provide the inhabitants of town with a water system so that they are no longer reliant on water from abandoned workings and perennial streams.

A closure programme has been prepared and implemented for the O’Okiep property and many of the former employees of this property have been involved in the rehabilitation of the site. It is the Group’s policy to continually rehabilitate its working operations during their lives to minimise the impact on the surroundings and reduce the funds required to finally close the operations at the end of their lives.

The Group has devised an audit programme to measure its compliance against the Mining Charter and has also engaged consultants to measure the operations’ progress against the Department of Trade and Industry Charter.

Enhancing the wellbeing of our peopleThe Metorex Group aims to optimise the health and wellness of its employees and their dependants by managing their health risks while simultaneously providing access to comprehensive occupational, preventative and curative healthcare facilities. The Group has responded pro-actively to the HIV/Aids epidemic by implementing a number of programmes to minimise the incidence of infection within the organisation and the communities in which it operates; as well as providing comprehensive care and treatment for those individuals who are infected with the virus. Refer to notes on the Group’s HIV/Aids policy under the Group’s Social Responsibility Report.

All employees undergo pre-placement annual and exit medical examinations in order to determine whether the employee is fit to perform the work that he/she is employed to do and to ensure that any occupational ill health is

ENVIRONMENTAL RESPONSIBILITIES AND

OCCUPATIONAL HEALTH AND HYGIENE

The Group aims to effectively manage its safety, health and environmental relationship through an integrated approach to its stakeholders and the environment in which it operates.


diagnosed early and treated as soon as possible. The three main occupational health challenges are noise (underground and in our surface operations), heat and pulmonary tuberculosis (TB). Airborne pollutants (especially above ground) and exposure to heavy metals and other chemicals pose occupational hygiene risks within specific work environments.

TuberculosisThe diagnosis, treatment and reporting of TB receives the highest health priority within the Group. An employee diagnosed with TB receives free treatment in accordance with World Health Organisation (WHO), directly observed treatment short-course (DOTS) guidelines and all cases are reported to the Medical Bureau of Occupational Diseases (MBOD) for assessment and possible compensation.

NoiseA comprehensive hearing conservation programme is in place, at all operations, that aims to reduce the risk of employees developing hearing loss in keeping with the legally required code of practice. All employees (including permanent contractors) who are at high risk of noise exposure are provided with personal hearing protection devices, known as noise clippers.

HeatAll underground employees undergo annual screening for heat intolerance. No cases of heat stroke were diagnosed during the review period.

Other occupational diseasesAirborne pollutants

Although there are currently no local guidelines, we are working towards achieving international guidelines by reducing DPM emissions. Diesel vehicles are serviced at regular intervals and ventilation is provided to dilute the DPM adequately.

Biological monitoring

Specific employees who work in areas where they could potentially be exposed to heavy metals and chemicals undergo biological monitoring. This has shown that the exposure levels are well within the occupational exposure limits set by the health authorities.

Kalulushi Hospital owned and maintained by Chibuluma Mines Plc in Zambia


IntroductionOur vision at Metorex is to grow our mining activities in southern Africa by acquiring, developing and managing a diversified portfolio of quality long-life mineral resources projects.

Our management philosophy is that of centralised strategic logic, combined with a strong decentralised profit centre concept at operational level, which gives management at our mines the confidence and flexibility to conduct their operations efficiently. The elements that contribute to the success of Metorex include a natural caution, operational leanness, controlled overheads, rigid cost control, strong accountability, efficient capital expenditure, utilisation of specialist consultants, and the quality of the orebody.

Best business practice in respect of corporate governance and internal controls throughout the Group were adhered to and specifically with regard to:

Compliance with the King II Report on Corporate GovernanceThe Metorex Group endorses the code of corporate governance as set out in the King II Report as well as in the Listings Requirements of the JSE. In the opinion of the directors, the Group has complied in all material aspects with the code of King II and JSE throughout the current financial year.

In supporting the code, the Board reviews and enhances the Group’s systems of internal control and governance on a continual basis to ensure that its business is managed ethically and in conformity with accepted standards of best practice. The directors of Metorex are committed to the principles of fairness, accountability, responsibility and transparency in all their dealings with our stakeholders.

The Metorex Group endorses the code of corporate governance as set out in the King II Report as well as the Listings Requirements of the JSE. In the opinion of the directors, the Group has complied in all material aspects with the code of King II throughout the current financial year.

Code of ethicsThe Group’s code of ethics requires all employees within the Group to act with the utmost good faith and integrity in all transactions and with all stakeholders with whom they interact. It commits Metorex and its employees to sound business practices and compliance with legislation.

Metorex is committed to operating in accordance with the highest standards of professional and business ethics by maintaining a Board of directors and management as well as the development of a community of employees with the highest ethical levels.

The Company has developed a code of ethics which complies with sound corporate governance principles, and has the full support of the Board of directors and senior management, as we believe that this is the only way to do business. The Company has also established a method for reporting fraud which is well communicated to all staff and management. Further insight regarding the company’s code of ethics can be obtained via our website: www.metorexgroup.co.za.

Amongst the principles to which the directors, management and employees dedicate themselves are:

• compliance with legislative and regulatory provisions;

• the protection of human life by following leading-edge safety, health and environmental practices;

• treating all employees and stakeholders with respect;

• not discriminating against any person;

• providing employees with equality of opportunity, based on merit;

CORPORATE GOVERNANCE


• ensuring that the quality of life of stakeholders is maintained by seeking to improve, rather than adversely affect, the environment;

• upholding the integrity of all stakeholders;

• respecting the cultural background of stakeholders;

• avoiding all potential conflicts of interest by being transparent in the declaration of all interests;

• only using company resources for the benefit of the company and its shareholders; and

• providing all employees with the opportunity to grow and advance.

The BoardThe Board of directors sets overall Group policy, which provides input and makes decisions on matters of strategic importance. The roles of the chairman and chief executive officer are separated to ensure that no one person has unfettered powers.

The main responsibilities of the Board are to:

• determine the Company’s purpose and values;

• determine the strategy to achieve its purpose;

• exercise leadership, enterprise, integrity and judgement in directing the Company so as to achieve continuing prosperity for its shareholders;

• ensure that procedures and practices are in place that protect the Company’s assets and reputation;

• monitor and evaluate the implementation of strategies, policies, management performance criteria and business plans;

• ensure that the Company complies with all the relevant laws, regulations and codes of best business practice;

• ensure that technology and systems used in the company are adequate to run the business properly and for it to compete through the efficient use of its assets, processes and human resources;

• identify key risk areas and key performance indicators of the business in order for the company to generate economic profit, so as to enhance shareholders’ value in the long term;

• regularly assess its performance and effectiveness as a whole; and that of individual directors, including the CEO; and

• ensure that the Company has developed a succession plan for its executive directors and senior management.

The Board of directors meets quarterly and is responsible for preparing financial statements, monitoring executive management and exercising control over Group activities.

Annual financial statementsIn accordance with the requirements of the Companies Act, 1973, the directors are responsible for the preparation of annual financial statements, which fairly present the state of affairs of the Company and the Group and that the accounting policies, supported by reasonable and prudent judgements and estimates, have been applied consistently. The directors are further responsible for ensuring that applicable accounting standards have been adhered to. The external auditors are responsible for carrying out an independent examination of the financial statements and reporting their findings thereon in accordance with statements of International Standards on Auditing.

Accountability and controlThe Board of directors recognises its responsibilities to retain full and effective control over the Group, review strategy, plan operational and financial performance, consider acquisitions, disposals and major capital expenditures, manage stakeholder communications and other material matters reserved for its decisions. There is also a provision in the Group’s articles of association for decisions to be taken between meetings by way of directors’ written resolutions.

The directors set standards and management implements systems of internal control to meet their responsibilities aimed at reducing the risk of error, fraud or loss in a cost-effective manner. This includes the proper delegation of responsibilities within a defined framework, accounting procedures and adequate segregation of duties. These controls are monitored throughout the Group, and all employees are required to maintain the highest ethical standards to ensure that business practices are conducted in a beyond-reproach manner under reasonable circumstances.

The directors are of the opinion, based on information obtained from management as well as internal and external auditors, that the internal accounting controls are adequate, and the financial records may be relied on for the preparation of the financial statements as presented.


Board composition

Mr Simon Malone ChairmanMr Charles Needham Chief executive officerMr Keith Spencer Operations directorMr Edward Legg Operations directorMr Alberto Barrenechea Non-executive directorMr Alistair Laughland Independent non-executive

directorMr Robert Still Non-executive director

Rotation and selection process of directorsThe retirement of directors follows a staggered process, with one-third of the directors retiring at the annual general meeting every three years, and no director serving for more than three years without being re-elected by the members in general meeting. Retiring directors are free to make themselves available for re-election and may, as such, be re-elected at the annual general meeting at which they retire. A summarised curriculum vitae of each retiring director is circulated to shareholders with the notice of annual general meeting, in terms of the Company’s articles of association.

The Company in general meeting may also from time to time increase or reduce the number of directors and may also determine in what rotation such increased or reduced number is to go out of office.

Non-executive directors are individuals of calibre and credibility, and have the necessary skill and experience to bring judgement to bear, independent of management, on issues of strategy,

performance, resources, transformation, diversity and they also maintain the balance of power between shareholders and management. Non-executive directors do not receive any remuneration from the Company for their services as directors other than the fees as reflected in the annual financial statements (refer to note 29 of the financial statements).

All non-executive directors receive remuneration in the form of share options in line with the company’s previous remuneration policies (refer to note 29 of the annual financial statements).

Executive directors

Executive directors are directors that are involved in the day-to-day management and running of the business and are in full-time salaried employment of the Company.

Non-executive directors

Non-executive directors are directors that are not involved in the day-to-day management of the business and are not full-time salaried employees of the Company and/or any of its subsidiaries.

CORPORATE GOVERNANCE: continued



Directors dealing in share options

2007 Share options

1 July 2006 Exercised

30 June 2007

Mr A S Malone 1 000 000 — 1 000 000Mr C D S Needham 1 000 000 (318 750) 681 250Mr K C Spencer 900 000 (350 000) 550 000Mr E W Legg 800 000 (75 000) 725 000Mr A Barrenechea 200 000 — 200 000Mr A J Laughland 200 000 — 200 000Mr R G Still 200 000 — 200 000

Total 4 300 000 (743 750) 3 556 250

Board Committees

In order to aid and assist the Board and its directors in discharging their duties and responsibilities, specific responsibilities have been allocated to three committees, namely: the Audit Committee, Hedging and Risk Committee, and the Remuneration and Nomination Committee.

All the Board committees are chaired by a non-executive director and these committees are free to seek independent, professional advice at the Company’s expense if so required.

Audit Committee

Messrs A J Laughland and C D S Needham serve as members of the Audit Committee, which meets quarterly.

The external and internal auditors have unrestricted access to the committee and representatives of the external auditors attend the committee meetings by invitation.

The principal functions of the committee, as set out in the formal terms of reference, are to review the financial statements and accounting policies, the effectiveness of internal controls and to review and discuss the risks facing the Group and the findings and recommendations of the internal and external auditors. The use of auditors for non-audit services is controlled by the committee.

Hedging and Risk Committee

Messrs A J Laughland, C D S Needham, A S Malone, K C Spencer, E W Legg and M Smith (Chief Financial Officer) serve as members of the Risk Committee, which meets on a monthly basis.

The main purpose of this committee is to discuss and assess the macro-economic environment, commodity prices, exchange rates and local and international interest rates and, based upon this information, to formulate and manage Group policies.

Furthermore, the Risk Committee is responsible for the formulation and management of the Group hedging policy.

The Group hedging policy entails the following:

Philosophy

Metorex is not in the business of speculating with financial instruments, nor is it actively seeking to generate profits through buying and selling financial instruments.

Risks

In the normal course of its mining operations, Metorex is exposed to commodity price and currency risk. Each of the Metorex operations has a unique risk profile related to its profit margin, debt profile and/or project development/growth status.

Risk management

In order to manage and mitigate these project-specific risks, Metorex recognises that commodity/currency hedging is a tool available for this purpose.

It is recorded that the following are indicators of commodity price/currency risk, which might require hedging:

A marginal operation

– The operation has low margins within the current price environment. The risk of negative cashflows is evident;

– Hedging of commodity price/currency in order to protect positive cashflows is appropriate.

A highly debt-geared operation

– The operations have a high debt gearing which is not adequately covered by free cashflow generation;

– Hedging of commodity price/currency in order to protect adequate cashflow generation for purposes of debt servicing is appropriate.

A capital-intensive expanding operation

– The operations are expanding/increasing capacity and require significant capital expenditure;

– Hedging of commodity price/currency in order to protect adequate cashflow generation which would cover capital expenditure during the expansion phase is appropriate.

A combination of the above

• Mitigating risks

In order to mitigate the risks identified, an adequate portion of production should be hedged at the minimum required price levels.

It is expressly recorded that hedging does not achieve its objective unless the volume and price of the related instrument significantly eliminates exposure to downside price volatility.

2007 2007 Share optionsShare options

1 July 1 July 20062006 ExercisedExercised

30 June 30 June 20072007


• Short-term earnings protection

It is recorded that, where prices have moved favourably higher, and management seeks to protect such prices in order to secure higher-than-budgeted/expected earnings for the current financial year, it is appropriate.

The tenure of such hedges is short term, and is not to mature beyond the close of the current financial year.

Remuneration and Nomination Committee

The committee, which comprises Messrs A S Malone, A Barrenechea and R G Still, meets quarterly and reviews directors’ and senior management's salaries. This is done by reviewing salaries in the marketplace to ensure that the Company is competitive and offers reward for individual contributions which enhance the performance and achievements of the Group. The directors’ remuneration and emoluments are disclosed in the annual financial statements (refer to note 29).

The committee also puts recommendations forward with regard to new share option grants in terms of the Group Share Incentive Plan. This is done by reviewing similar trends in the marketplace, assessment of management performance as well as Group and subsidiary performance.

Board and committee meetings’ attendance

Year ended 30 June 2007:

Board Audit Risk*Remu-

neration

A S Malone (Chairman) 4 3 4

C D S Needham (CEO) 4 4 10

K C Spencer 4 11

E W Legg 4 10

A Barrenechea 4 4

A J Laughland 4 4 10

R G Still 4 4

M Smith (CFO) 4# 4# 11

*Monthly meetings held#By invitation

Directors’ interestsThe declaration of directors’ interests is a standard item on the Board agenda. A register of interests is maintained and retained by the company secretary. When a director declares an interest in a specific matter, such director is recused from voting on such matter.


Effective risk management is about identifying the potential risks which can impact the enterprises’s objectives, improving understanding of the causes and consequences of those risks, and working to reduce uncertainty and/or increase the ability to control events or outcomes.

BoardBoard AuditAudit Risk*Risk*Remu-Remu-

nerationneration


Internal controlThe directors set policies and management implements systems of internal control to meet their responsibilities aimed at reducing the risk of error, fraud or loss in a cost-effective manner. This includes the proper delegation of responsibilities within a defined framework, accounting procedures and adequate segregation of duties. These controls are monitored throughout the Group, and all employees are required to maintain the highest ethical standards to ensure that business practices are conducted in a beyond-reproach manner under reasonable circumstances.


Internal auditThe internal audit function is currently performed by Moore Stephens MWM. This function provides management with an independent objective consulting and assurance service that reviews matters relating to control, risk management and corporate governance.

The function’s responsibility is to independently assess and appraise the systems of internal control and the policies and procedures of the Group, in order to monitor how adequate and effective they are in ensuring the achievement of organisational objectives, the relevance, reliability and integrity of management and financial information, the safeguarding of assets and compliance with relevant policies, procedures, laws and regulations.

The internal audit function reports directly to the Audit Committee. Bi-annual operational visits are undertaken to each of our operations and the results of these audits are tabled at Audit Committee meetings. A corporate governance review was also conducted by the internal audit function during the financial year.

Risk managementThe Board of directors accepts their accountability and responsibility for risk management and has delegated the Audit Committee responsibility for monitoring the strategic risks.

The Board of directors meets quarterly and is responsible for the Group’s system of internal financial and operational control. The Group’s internal controls are designed to provide reasonable, but not absolute, assurance with regard to the integrity and reliability of the financial statements and to safeguard, verify

and maintain accurate records of the Group’s assets and efficient management of the Group’s resources, and facilitate the early detection of potential fraud, liability, loss and material misstatement, whilst complying with applicable laws and regulations.

During the year under review, nothing has come to the attention of the directors to indicate that any material breakdown in the functioning of these controls, procedures and systems has occurred. A material breakdown is defined as a critical weakness in process or financial systems which could result in a material loss, contingency or uncertainty requiring disclosure in the published annual financial statements.

The Board of directors is responsible for the maintenance of proper disaster management policies at an operational and Group level, to ensure prompt effective action in case of any emergencies during the course of mining and business operations.

Effective risk management is about identifying the potential risks which can impact the enterprises’s objectives, improving understanding of the causes and consequences of those risks, and working to reduce uncertainty and/or increase the ability to control events or outcomes.

Some of the risks associated with our entities and to which they, to the best of their abilities, attempted to mitigate directly, are:

Financial

– volatility in commodity prices, which are subject to normal supply and demand pressures as well as, increasingly, speculative activity;

– foreign exchange rate volatility, as a result of product sales and costs being dollar denominated;

– interest-rate risk;– inflation;– credit and liquidity risks;– rising labour, commodity input costs, sourcing

bottlenecks and financing costs; and– risk financing.

Political

– changes in National Regulatory Environment and associated costs;

– potential political instability in countries in which they operate; and

– security of tenure of their operations.


Operational

– unexpected events which may impact on production targets being met;

– ore reserves – forecasting and delivery; and– exploration and project development risks, due to long lead-

times and uncertainty inherent in these activities.

Environmental and social

– the cost impact of increasingly stringent environmental and social requirements and potential unexpected changes to these requirements;

– infrastructure development and reliability can significantly impact on costs; and

– climate/weather can have an important bearing on the consistency of operating results.

Health and safety

– HIV, Malaria, TB and other dread diseases;– occupational health and safety risks; and– risk of changes to health and safety legislation and the

potential costs of these.

Human resources

– the cost of training and retaining, employees due to a lack of skills and experience in the industry.

Within Metorex Limited it is the Board’s responsibility to ensure that the Company maintains a system of internal financial controls to provide reasonable assurance regarding the reliability of the

financial information used within the business and for publication and that assets are safeguarded. The Board has discharged this duty to the audit and risk committee which regularly reviews risk identification and mitigation procedures and reports back to the Board.

Economic risk is the danger that the economy as a whole will perform poorly. When the whole economy experiences a downturn, it affects stock prices, the job market, and the prices of consumer products.

Market risk is the chance that the entire market will decline, thus affecting the prices and values of securities. Market risk in turn, is influenced by outside factors such as interest-rate changes.

Inflation risk is the danger that the currency invested in will buy less in the future because prices of consumer goods rise. When the rate of inflation rises, investments have less purchasing power. This is especially the case with investments that earn fixed rates of return. For as long as investments are held at constant rates, they are threatened by inflation. Inflation risk is tied to interest-rate risk, because interest rates often rise to compensate for inflation.

Industry risk is the chance that a specific industry will perform poorly. When problems plague one industry, they affect the individual business involved, as well as the securities issued by those businesses. They may also cross over into other industries.

The Group’s financial risk management activities are also discussed in note 25 to the financial statements.


The Group is committed to providing fair and equitable treatment for all employees and creating a workplace in which individuals of ability and application can develop rewarding careers at all levels, regardless of ethnicity or gender, and is in the process of executing an employment equity programme that focuses strongly on providing training and development opportunities for historically disadvantaged groups.


Company secretary and professional adviceThe company secretary is appointed by the Board. The company secretary’s statement of compliance is set out on page 54 of the financial statements.

All directors have access to the advice and services of the company secretary, who is responsible to the Board for ensuring compliance with procedures and regulations of a statutory nature. Furthermore, all directors are entitled to seek independent professional advice concerning the affairs of the Group at the Group’s expense, should they believe that course of action would be in the best interests of the Group.

The company secretary is also responsible for alerting directors to any relevant changes to the Companies Act, the Insider Trading Act and the JSE Listings Requirements, as well as any other statutory regulations or laws affecting them in their capacity as directors.

Employment equityThe Group is committed to providing fair and equitable treatment for all employees and creating a workplace in which individuals of ability and application can develop rewarding careers at all levels, regardless of ethnicity or gender, and is in the process of executing an employment equity programme that focuses strongly on providing training and development opportunities for historically disadvantaged groups.

In compliance with the Employment Equity Act (1998), the Group submitted a report and future action plan to government and has been working towards achieving those targets set out in the report and action plan.

Safety, health and environmental managementThe Group’s safety record for the year is set out in the supplementary information on page 87.

The Group strives to conduct its activities with due regard to the health and safety of its employees.

Going concernThe directors are satisfied that the Group will continue in operation for the foreseeable future. On this basis, the “going concern” concept is used when preparing the annual financial statements.

Stakeholder communicationThe Group is committed to transparency and to ensuring regular and open communication with its various stakeholders. The members of the Group’s executive committee, and more specifically the executive directors, are available at all times to address shareholder queries and concerns. All communication takes full cognisance of the obligations placed on the Group by its listing and the regulatory environment in which it operates.

The Group’s communication with its shareholders is premised on a clear understanding of shareholders’ desire to maximise returns on investment and that, in order to do so, they and/or their advisers require equitable, timeous access to operating, financial and other information relevant to the health of the Group.

Information defined or deemed to be influential on the Group’s share price is first released to the market via the JSE Limited’s Stock Exchange News Service (“SENS”) and, as soon as possible thereafter, to local and international media and to the addressees on the Group’s electronic shareholder database. These addressees include shareholders, fund managers, and analysts. All information is also available on the Group’s website.

Information relating to the Group’s operating and financial performance is released pro-actively to the market at least bi-annually in the same way, and sometimes more frequently, as determined by circumstances. The Group disseminates its results by means of a leaflet which is distributed to all shareholders on the database.

The Group hosted frequent analysts’ briefings during the year under review and will be hosting such briefings on a regular basis in the future.


Fluorspar Copper/Cobalt Antimony/Gold Other Group

2007 2006 2007 2006 2007 2006 2007 2006 2007 2006

R000 % R000 % R000 % R000 % R000 % R000 % R000 % R000 % R000 R000

External sales 225 959 13 156 546 15 886 703 52 295 313 30 591 095 35 561 469 55 — — — — 1 703 757 1 013 328

Mining profit before depreciation 82 164 14 43 947 16 426 735 70 133 684 49 89 782 15 93 956 35 (655) 1 548 — 598 026 272 135

Depreciation 9 002 9 8 201 15 57 816 56 17 066 32 35 856 35 28 221 53 125 — 110 — 102 799 53 598

Capital expenditure* 20 813 1 19 774 5 1 394 363 92 371 161 89 105 885 7 23 357 6 180 — 170 — 1 521 241 414 462

Assets† 148 384 4 107 131 7 2 426 562 65 892 617 60 487 912 14 393 890 26 401 146 12 93 522 7 3 464 004 1 487 160

Liabilities# 45 571 7 23 545 5 238 740 39 201 191 47 118 349 19 141 111 33 204 901 35 65 982 15 607 561 431 829

Secondary segmental information

Africa Switzerland USA Other Group

2007 2006 2007 2006 2007 2006 2007 2006 2007 2006

R000 % R000 % R000 % R000 % R000 % R000 % R000 % R000 % R000 R000

Total sales by customer location 1 056 924 62 683 101 67 315 109 18 16 237 2 161 939 10 161 146 16 169 785 10 152 844 15 1 703 757 1 013 328

Assets† 3 464 004 100 1 487 160 100 — — — — — — — — — — — — 3 464 004 1 487 160

Liabilities# 607 561 100 431 829 100 — — — — — — — — — — — — 607 561 431 829

Capital expenditure* 1 521 241 100 414 462 100 — — — — — — — — — — — — 1 521 241 414 462

SEGMENTAL ANALYSIS: for the year ended 30 June 2007

Primary segmental information

FluorsparFluorspar Copper/CobaltCopper/Cobalt

AfricaAfrica SwitzerlandSwitzerland


Fluorspar Copper/Cobalt Antimony/Gold Other Group

2007 2006 2007 2006 2007 2006 2007 2006 2007 2006

R000 % R000 % R000 % R000 % R000 % R000 % R000 % R000 % R000 R000

External sales 225 959 13 156 546 15 886 703 52 295 313 30 591 095 35 561 469 55 — — — — 1 703 757 1 013 328

Mining profit before depreciation 82 164 14 43 947 16 426 735 70 133 684 49 89 782 15 93 956 35 (655) 1 548 — 598 026 272 135

Depreciation 9 002 9 8 201 15 57 816 56 17 066 32 35 856 35 28 221 53 125 — 110 — 102 799 53 598

Capital expenditure* 20 813 1 19 774 5 1 394 363 92 371 161 89 105 885 7 23 357 6 180 — 170 — 1 521 241 414 462

Assets† 148 384 4 107 131 7 2 426 562 65 892 617 60 487 912 14 393 890 26 401 146 12 93 522 7 3 464 004 1 487 160

Liabilities# 45 571 7 23 545 5 238 740 39 201 191 47 118 349 19 141 111 33 204 901 35 65 982 15 607 561 431 829

Secondary segmental information

Africa Switzerland USA Other Group

2007 2006 2007 2006 2007 2006 2007 2006 2007 2006

R000 % R000 % R000 % R000 % R000 % R000 % R000 % R000 % R000 R000

Total sales by customer location 1 056 924 62 683 101 67 315 109 18 16 237 2 161 939 10 161 146 16 169 785 10 152 844 15 1 703 757 1 013 328

Assets† 3 464 004 100 1 487 160 100 — — — — — — — — — — — — 3 464 004 1 487 160

Liabilities# 607 561 100 431 829 100 — — — — — — — — — — — — 607 561 431 829

Capital expenditure* 1 521 241 100 414 462 100 — — — — — — — — — — — — 1 521 241 414 462

†Excludes taxation (Current and Deferred) and assets held-for-sale.#Excludes interest-bearing debt and taxation (Current and Deferred).

* Includes increases in mineral rights due to minority acquisitions in subsidiary companies.

Antimony/GoldAntimony/Gold OtherOther GroupGroup

USAUSA OtherOther GroupGroup


ANNUAL FINANCIAL STATEMENTS: for the year ended 30 June 2007

Contents

54 Group secretary's certifi cation

54 Directors' approval

55 Independent auditor's report

56 Directors’ report

58 Income statements

59 Balance sheets

60 Cash fl ow statements

61 Notes to the cash fl ow statements

62 Statements of changes in equity

63 Notes to the annual fi nancial statements


TO THE MEMBERS OF METOREX LIMITEDThe directors of the Company are responsible for the preparation and integrity of the annual financial statements and related financial information included in this report. The financial statements have been prepared in accordance with International Financial Reporting Standards and incorporate full and responsible disclosure in line with the accounting philosophy of the Group.

The directors are satisfied that the Group has adequate resources to continue in operation for the foreseeable future and the financial statements have accordingly been prepared on a going-concern basis.

It is the responsibility of the external auditors to express an opinion on the financial statements.

The annual financial statements, set out on pages 58 to 86, were approved by the Board of Directors on 18 October 2007 and are signed on its behalf by:

A S MALONEChairman

C D S NEEDHAMManaging Director

I hereby certify that Metorex Limited has lodged with the Registrar of Companies all such returns as are required of a public company in terms of section 268G(d) of the Companies Act, 1973. All such returns are true, correct and up to date.

per

MOORE STEPHENS MWM INC.Secretary

18 October 2007

GROUP SECRETARY’S CERTIFICATION

DIRECTORS’ APPROVAL


making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements 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 principles used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall financial statement presentation.

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

OpinionIn our opinion, the financial statements present fairly, in all material respects, the financial position of the company and of the group as at 30 June 2007, and of their financial performance and their cash flows for the year then ended in accordance with International Financial Reporting Standards, and in the manner required by the Companies Act of South Africa.

DELOITTE & TOUCHEPer I MarshallPartner

18 October 2007

Buildings 1 and 2, Deloitte PlaceThe Woodlands Office Park Woodlands DriveSandton

National Executive: G G Gelink Chief Executive, A E Swiegers Chief Operating Officer, G M Pinnock Audit, D L Kennedy Tax, L Geeringh Consulting, L Bam Strategy, C R Beukman Finance, T J Brown Clients & Markets, N T Mtoba Chairman of the Board, J Rhynes Deputy Chairman of the Board.

We have audited the Company and Group annual financial statements of Metorex Limited, which comprise the directors' report, the Company balance sheet and the consolidated balance sheet as at 30 June 2007, the Company income statement and the consolidated income statement, the Company statement of changes in equity and the consolidated statement of changes in equity and Company cash flow statement and the consolidated cash flow statement for the year then ended, a summary of significant accounting policies and other explanatory notes, as set out on pages 58 to 86.

Directors' responsibility for the financial statementsThe Company's and Group's directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and in the manner required by the Companies Act of South Africa. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor's responsibilityOur responsibility is to express an opinion on these financial statements 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 whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risk of material misstatement of the financial statements whether due to fraud or error. In

INDEPENDENT AUDITOR'S REPORT


DIRECTORS’ REPORT

Nature of businessMetorex is an established mid-tier mining company, listed on the JSE Limited (“JSE”) and the London Stock Exchange (“LSE”). In addition, Metorex has a level 1 ADR programme sponsored by the Bank of New York. The Company owns and manages quality mining projects on a decentralised-profit-centre basis, and provides technical, administrative and financial support to operational management.

Financial resultsThe results for the year are set out in the audited annual financial statements which appear on pages 58 to 86.

Share capitalThe authorised and issued share capital of the Company is detailed in Note 16 to the annual financial statements.

Shares issued1) 31 August 2006: 7,5 million shares at R11,25 per share – acquisition of 20% interest held by Crew Gold (Pty) Ltd in

Barberton.2) 27 March 2007: 12,7 million shares at R13,10 per share – acquisition of 35% interest held by the IDC in Chibuluma South.3) 3 April 2007: 12,5 million shares at R21,35 per share – acquisition of 16% interest held by Sentinelle Global Investment

(Pty) Ltd in Ruashi Holdings.4) July 2006 – June 2007: 2,9 million shares at average R2,52 per share – share option implementations.

A cumulative amount of 10,6 million (2006: 11,1 million) share options are available for implementation in terms of the Metorex Limited Share Incentive Scheme. Share options are offered at the ruling market price and implementation may only commence two years after the date of acceptance of the offer. Options of 2,4 million shares at a weighted average price of R16,05 per share were offered to Group employees during the year and 2,9 million share options were exercised at an average price of R2,62 per share.

DirectorsThe board of directors at the date of this report comprised:A S Malone (Chairman); C D S Needham (Chief Executive); A Barrenechea*^, A J Laughland*~ˇ; K C Spencer; E W Legg; R G Still*; G A Forrest*†

*non-executive; ~British; ^Spanish; †Belgian; ˇIndependent

In terms of the articles of association of the Company, Messrs A S Malone, K C Spencer and A J Laughland are due to retire. However, being eligible, they offer themselves for re-election.

Special resolutions adoptedAt the annual general meeting held on 16 November 2006, the Company’s members approved a special resolution, which provided the Company with a general authority to acquire its own securities.

The special resolution contained in the notice of the general meeting dated 20 June 2007 to increase the authorised share capital to 500 000 000 shares and amendments to the articles of association were passed by the requisite majority of shareholders.

Group Company SecretaryMoore Stephens MWM Inc7 West Street, Houghton 2198, South Africa(PO Box 1574, Houghton 2041)

Directors' interests in the companyThe interests of the directors in the issued share capital of the Company at the end of the financial year were:

Beneficial 2007 Beneficial 2006Direct Indirect Direct Indirect

A S Malone — 15 101 511 — 15 745 923C D S Needham 1 910 086 — 1 409 012 501 074A Barrenechea — 757 491 — 494 857K C Spencer — 122 500 — 22 500E W Legg 74 500 — 74 500 —R G Still — 478 403 — 200 000

1 984 586 16 459 905 1 483 512 16 964 354

DividendsIn view of the funding requirements of the new projects, the Board considers it inappropriate to declare a dividend for the year ended 30 June 2007 (2006: Rnil).

SubsidiariesRefer to Note 13 of the annual financial statements for details of subsidiary companies.

Beneficial 2007 Beneficial 2007 Beneficial 2006DirectDirect IndirectIndirect Direct Indirect


Subsequent eventsSubsequent to year-end, the following events occurred:

On 12 July 2007, the authorised share capital of 350 000 000 shares was increased to 500 000 000 shares. The special resolutions relating to the increase in the authorised share capital and amendments to the articles of association were passed by the requisite majority of shareholders.

On 27 July 2007, the reverse acquisition of Pan African Resources (Pty) Ltd ("PAR") was finally completed. PAR was re-admitted to trading on AIM in the United Kingdom on 4 July 2007 and listed on the alternative exchange ("AltX") in South Africa on 27 July 2007.

A definitive, unconditional share purchase agreement ("SPA") was signed between Metorex and the Forrest Group on 14 September 2007. The SPA encapsulates the acquisition by Metorex of all the Forrest Group’s interests in Copper Resources Corporation ("CRC") to be settled by way of the issue of 21,3 million new Metorex shares and includes the purchase of certain options and warrants to subscribe for a further 4 049 929 shares in CRC for cash, which collectively represents 39% of CRC. Metorex is proceeding with an offer to the minority shareholders of CRC. The offer consideration will be 73 new Metorex shares for every 100 CRC shares held by minorities with a cash alternative of £1.25 per CRC share.

On 31 August 2007, the ordinary resolutions relating to the general authority to issue shares for cash, were passed by the requisite majority shareholders.

On 27 September 2007, G A Forrest was appointed to the Metorex Limited Board. Mr Forrest is president of the Forrest Group of Companies, which holds substantial interests in the DRC.

Aggrieved former parties to RuashiDuring the year, Ruashi Holdings (Pty) Limited reached agreement with Sentinelle Global Investments (Pty) Limited whereby an amount of R29 million due in terms of the shareholders’ agreement be advanced so as to allow Sentinelle to settle certain claims from former parties to the Ruashi site.

Major shareholders (unaudited)At 30 June 2007 the following shareholders held more than 5% of the 324 540 835 ordinary shares in issue:

Shareholder Number of shares %

Allan Gray Asset Managers 68 159 509 21,0Minerales Y Productos Derivados S.A. 23 556 839 7,3JPMorgan 20 282 403 6,3Rand Merchant Bank 17 221 082 5,3Sepiol SA 16 300 000 5,0

As far as can be ascertained from the register of members, and to the best of the directors’ knowledge, there were no other holders of 5% or more in the capital of the Company at that date.

Analysis of shareholders (unaudited):

Range of shareholding

Number of shareholders

% of shareholders

Number of shares % of shares

0 – 1 000 2 297 30,1 1 277 922 0,4 1 001 – 5 000 3 312 43,3 9 043 437 2,8 5 001 – 10 000 917 12,0 7 031 939 2,2

10 001 – 50 000 791 10,4 17 153 360 5,3 50 001 – 100 000 110 1,4 7 715 311 2,4 100 001 – 1 000 000 168 2,2 54 387 866 16,71 000 001 and above 45 0,6 227 931 000 70,2

7 640 100,00 324 540 835 100,00Individuals 7 008 91,7 34 359 844 10,6

Banks & Trust funds 210 2,7 131 370 845 40,5Companies 334 4,4 135 306 957 41,7

Corporate bodies 88 1,2 23 503 189 7,27 640 100,00 324 540 835 100,00

Non-public shareholders: 6 0,1 85 536 672 26,4

Directors 4 0,1 17 207 163 5,3Associates 1 — 170 000 0,1

10%+ holdings 1 — 68 159 509 21,0Public shareholders 7 634 99,9 239 004 163 73,6

7 640 100,00 324 540 835 100,00

ShareholderShareholder Number of sharesNumber of shares %%

Range of Range of shareholdingshareholding

Number of Number of shareholdersshareholders

% of% of shareholders shareholders

Number of Number of sharesshares % of shares% of shares


Group Company

2007 2006 2007 2006

Notes R000 R000 R000 R000

Revenue

Mineral sales

Copper 867 916 295 313 — —

Cobalt 18 787 — — —

Fluorspar 225 959 156 546 — —

Gold 446 509 395 544 74 256 71 142

Antimony 144 586 165 925 144 586 165 925

Gross revenue 1 703 757 1 013 328 218 842 237 067

Realisation costs 162 753 111 668 31 341 39 704

On-mine revenue 1 541 1004 901 660 187 501 197 363

Cost of production 2 1 045 777 683 123 199 793 173 820

Mining profit/(loss) 495 227 218 537 (12 292) 23 543

Other income, net 4 41 673 6 141 124 355 69 170

Operating income before finance costs 536 900 224 678 112 063 92 713

Finance income 10 713 6 307 47 872 14 414

Finance costs 6 (11 920) (7 640) (13 527) (3 483)

Profit before taxation 535 693 223 345 146 408 103 644

Income tax expense 7 132 709 63 875 19 767 18 867

Profit for the year from continuing operations 402 984 159 470 126 641 84 777

Profit after tax on disposal of Wakefield 191 768 — 237 934 —

Income after tax from Wakefield operations 31 50 987 50 186

Profit for the year 645 739 209 656 364 575 84 777

Attributable to:

Equity holders of the parent 555 713 155 394 364 575 84 777

Minority interests 90 026 54 262

645 739 209 656 364 575 84 777

From continuing and discontinued operations:

Earnings per share (cents) 8 183,5 54,3

Diluted earnings per share (cents) 8 177,5 53,1

From continuing operations:

Earnings per share (cents) 8 107,9 39,7

Diluted earnings per share (cents) 8 104,4 38,8

INCOME STATEMENTS: for the year ended 30 June 2007

Group Group Company Company

20072007 2006 20072007 2006

Notes R000R000 R000 R000R000 R000



Group Company

2007 2006 2007 2006Notes R000 R000 R000 R000

ASSETSNon-current assetsProperty, plant and equipment 10 1 389 668 797 887 47 003 26 913Mineral rights 10 1 160 751 302 385 — —Goodwill 11 11 514 11 514 11 514 11 514Investments 12 929 929 929 929Deferred tax asset 22 1 887 262 — —Subsidiaries 13 1 879 836 935 599Rehabilitation trust fund 21 35 340 33 864

2 600 089 1 146 841 1 939 282 974 955

Current assets Inventories 14 81 118 42 952 9 974 7 423Trade and other receivables 15 390 654 202 616 31 319 26 743Wakefield proceeds receivable 338 575 — 338 575 —Derivative financial instruments 25 897 599 177 398Group companies 16 477 16 704Current tax assets 3 536 3 592 — —Bank balances and cash 54 558 78 952 3 677 17 448

869 338 328 711 400 199 68 716Assets held-for-sale, net 31 12 423 145 902 — —

Total assets 3 481 850 1 621 454 2 339 481 1 043 671

EQUITY AND LIABILITIESCapital and reservesShare capital 16 32 454 28 903 32 454 28 903Share premium 1 293 733 773 135 1 293 733 773 135Hedging and translation reserve 17 (115 130) (145 202) 5 135 (2 081)Retained earnings 834 537 278 824 593 273 228 698Share option reserve 30 10 340 7 536 5 603 3 884Equity reserve (121 922) (128 066) (108 378) (108 378)Equity attributable to equity holders of parent 1 934 012 815 130 1 821 820 924 161

Minority interest 18 69 691 153 438Total equity 2 003 703 968 568 1 821 820 924 161

Non-current liabilitiesLong-term liabilities 20 379 250 58 002 354 756 39 156Long-term provisions 21 84 464 61 881 — —Deferred tax liabilities 22 416 050 125 072 29 307 9 540Post-retirement medical aid 23 8 997 9 148 2 565 2 538

888 761 254 103 386 628 51 234

Current liabilitiesTrade and other payables 393 214 158 669 81 773 18 803Shareholder loans 19 — 2 754 — 2 754Short-term borrowings 20 22 228 29 848 — 12 834Short-term provisions 21 29 122 33 005 10 017 8 780Bank overdraft 24 — 3 421 — —Derivative financial instruments 25 91 764 161 479 11 346 18 562Taxation 53 058 9 607 27 897 6 543

589 386 398 783 131 033 68 276Total equity and liabilities 3 481 850 1 621 454 2 339 481 1 043 671Net asset value per share (cents) 596 282Net tangible asset value per share (cents) 592 276

BALANCE SHEETS: as at 30 June 2007

GroupGroup CompanyCompany

20072007 2006 20072007 2006Notes R000R000 R000 R000R000 R000



Group Company

2007 2006 2007 2006

Notes R000 R000 R000 R000

CASH INFLOWS FROM OPERATING ACTIVITIES 575 282 292 630 132 093 100 552

Cash generated by operations A 638 434 317 588 20 128 47 255

Dividends received 79 820 41 118

Dividends paid (42 131) (15 132) — —

Taxation (paid)/refunded (19 814) (6 408) (2 200) 1 248

Finance income 10 713 8 158 47 872 14 414

Finance costs (11 920) (11 576) (13 527) (3 483)

CASH OUTFLOWS FROM INVESTING ACTIVITIES (872 522) (428 011) (452 375) (313 509)

Additions to property, plant and equipment and mineral rights (877 080) (477 431) (26 015) (10 294)

Proceeds on disposal of property, plant and equipment 4 558 5 530 — —

Proceeds on issue of shares in subsidiary — 43 890

Loans to subsidiaries (426 587) (307 705)

Movement in group companies 227 4 490

CASH INFLOWS FROM FINANCING ACTIVITIES 311 430 34 562 306 511 54 417

Borrowings raised 374 223 64 125 354 756 51 989

Borrowings repaid (69 292) (66 404) (54 744) (34 413)

Shares issued 6 499 36 841 6 499 36 841

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 14 190 (100 819) (13 771) (158 540)

Cash and cash equivalents at the beginning of the year 75 531 189 066 17 448 175 988

Effect of foreign exchange rate changes (939) (78)

Wakefield disposal (34 224) (12 638)

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR B 54 558 75 531 3 677 17 448

CASH FLOW STATEMENTS: for the year ended 30 June 2007


20072007 2006 20072007 2006

Notes R000R000 R000 R000R000 R000


Group Company

2007 2006 2007 2006

R000 R000 R000 R000

A RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED BY/(UTILISED IN) OPERATIONS

Profit before taxation – continuing operations 535 693 223 345 146 408 103 644

Adjusted for: 132 183 128 503 (106 521) (46 090)

Dividends received (79 820) (41 118)

Profit for the year from subsidiary sold/discontinued operations 73 684 70 550 — —

Profit on disposal of mining assets (71) (1 014) — —

Share option costs 3 496 4 036 1 719 2 080

Net finance costs/(income) 1 207 1 333 (34 345) (10 931)

Impairment reversal (48 932) — — —

Depreciation 102 799 53 598 5 925 3 879

Operating profit before working capital changes 667 876 351 848 39 887 57 554

Working capital changes (29 442) (34 260) (19 759) (10 299)

(Increase)/decrease in inventories (46 500) (9 645) (2 551) 137

Increase in trade and other receivables (210 119) (110 427) (81 442) (7 809)

Increase/(decrease) in trade and other payables and provisions 227 177 85 812 64 234 (2 627)

Cash generated by operations 638 434 317 588 20 128 47 255

B CASH AND CASH EQUIVALENTSBank balances and cash 54 558 78 952 3 677 17 448Bank overdraft — (3 421) — —

54 558 75 531 3 677 17 448

NOTES TO THE CASH FLOW STATEMENTS: for the year ended 30 June 2007


20072007 2006 20072007 2006

R000R000 R000 R000R000 R000


Group Company

2007 2006 2007 2006

Notes R000 R000 R000 R000

Share capital 32 454 28 903 32 454 28 903

– Balance at beginning of year 28 903 27 993 28 903 27 993

– Issue of shares 3 551 910 3 551 910

Share premium 1 293 733 773 135 1 293 733 773 135


– Issue of shares 520 598 35 931 520 598 35 931

Foreign exchange translation reserve (41 312) (38 588) 16 480 16 480

– Balance at beginning of year (38 588) (52 353) 16 480 16 480

– Foreign exchange reserve 3 822 (17 969)

– Translation profit on foreign monetary item (8 728) 44 430

– Tax effect of translation profit on foreign monetary item 2 182 (12 696)

Hedging reserve (73 818) (106 614) (11 345) (18 561)

– Balance at beginning of year (106 614) (8 278) (18 561) (304)

– Fair value profits/(losses) for the year 59 221 (146 772) 7 216 (18 257)

– Minority interests (26 425) 48 436

Equity reserve (121 922) (128 066) (108 378) (108 378)

Balance at beginning of year (128 066) (128 066) (108 378) (108 378)

Sale of Wakefield 6 144 — — —

Share option reserve 10 340 7 536 5 603 3 884


– Sale of Wakefield (508) — — —

– Expense for the year 3 312 4 036 1 719 2 080

Retained income 834 537 278 824 593 273 228 698


– Profit for the year attributable to equity holders of parent 555 713 155 394 364 575 84 777

Equity attributable to equity holders of parent 1 934 012 815 130 1 821 820 924 161

Minority interest 18 69 691 153 438

Total equity 2 003 703 968 568 1 821 820 924 161


20072007 2006 20072007 2006

Notes R000R000 R000 R000R000 R000

STATEMENTS OF CHANGES IN EQUITY: for the year ended 30 June 2007


NOTES TO THE ANNUAL FINANCIAL STATEMENTS: for the year ended 30 June 2007

1. ACCOUNTING POLICIES

The annual financial statements have been prepared under the historical-cost basis, except for certain financial instruments which are stated at fair value, and in accordance with International Financial Reporting Standards. The principal accounting policies are set out below and are consistent in all material respects with those applied in the previous year.

New and revised International Financial Reporting Standards At the date of authorisation of these financial statements, the following Standards and Interpretations were in issue but not yet

effective:

IFRS 6 Exploration for an Evaluation of Mineral Resources

IFRS 7 Financial Instruments Disclosure

IFRS 8 Operating Segments

IAS 1 Presentation of Financial Statements – Amendments

IAS 23 Borrowing Costs – Amendments

IFRIC 4 Determining whether an Arrangement contains a Lease

IFRIC 5 Right to Interest Arising from Decommissioning, Restoration and Environmental Rehabilitation Funds

IFRIC 10 IAS 34, Interim Financial Reporting

IFRIC 11 IFRS 2, Group and Treasury Share Transactions

IFRIC 12 Service Concession Arrangements

IFRIC 13 Customer Loyalty Programmes

IFRIC 14 IAS 19 – The limit on a defined benefit asset, minimum funding requirements and their interaction

The directors anticipate that the adoption of these Standards and Interpretations in future periods will not have a material impact on the financial statements of the Company other than additional disclosures.

Judgements made by management The following judgements, apart from those involving estimates (as mentioned below) have been made by management in the

process of applying the Group's accounting policies that have the most significant effect on the amounts recognised in the financial statements:

• In applying IFRS 5, Non-current Assets Held-for-Sale and Discontinued Operations, management had to make judgements as to which non-current assets and discontinued operations fall within the scope of the standard and had to be reclassified and measured in terms of IFRS 5 (refer note 31);

• In applying IFRS 2, Share-based Payments, management had to make certain judgements in respect of the fair value option-pricing models to be used in determining the various share-based arrangements in respect of employees, as well as the variable elements used in these models (refer note 30);

• In applying IFRIC 4, Determining whether an Arrangement contains a Lease, and IAS 17, Leases, contractual agreements were assessed to determine whether they convey the right to use an asset and their classification as either an operating or finance lease.

Key assumptions made by management in applying accounting policies The following key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet

date, have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year:

• Estimates made in determining the present obligation of environmental provisions;

• Estimates made in determining the recoverable amount of assets where there is an indication that an asset may be impaired, this includes the estimation of cash flows and the discount rates used;

• Estimates made in determining the probability of future taxable income thereby justifying the recognition of a deferred tax asset;

• Estimates made in determining changes in the estimated useful lives of assets and their residual values;

• Estimates made of legal or constructive obligations resulting in the raising of provisions, and the expected date of probable outflow of economic benefits to assess whether the provision should be discounted;

• Estimates made of contingent liabilities disclosed; and

• Estimates of mineral resources and ore reserves in accordance with the SAMREC code (2000) for South African properties. Such estimates relate to the category for the resource (measured, indicated or inferred), the quantum and the grade.


NOTES TO THE ANNUAL FINANCIAL STATEMENTS: for the year ended 30 June 2007continued

1. ACCOUNTING POLICIES (continued) Business combinations Acquisitions of subsidiaries and businesses are accounted for using the purchase method. The cost of the business combinations

is measured as the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions, for recognition under IFRS 3 Business Combinations are recognised at their fair values at the acquisition date, except for non-current assets (or disposal groups) that are classified as held-for-sale in accordance with IFRS 5 Non-current Assets Held-for-Sale and Discontinued Operations, which are recognised and measured at fair value less costs-to-sell.

Mineral rights arising on acquisition are recognised as an asset, and initially measured at cost, being the excess of the cost of the business combination over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in profit or loss.

The interest of minority shareholders in the acquiree is initially measured at the minority's proportion of net fair value of the assets, liabilities and contingent liabilities recognised.

1.1 Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and enterprises controlled by

the Company (its subsidiaries) to 30 June each year. Control is achieved where the company has the power to govern the financial and operating policies of an investee enterprise so as to obtain benefits from its activities.

On acquisition, the assets and liabilities of a subsidiary are measured at their fair values at the date of exchange of assets given, liabilities incurred or assumed and equity instruments issued by the Group in exchange for control of the acquiree plus any costs directly attributable to the business combination. The interest of minority shareholders is stated at the minority’s proportion of the fair values of the assets and liabilities recognised.

The results of the subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Inter-company transactions and balances between group enterprises are eliminated on consolidation.

1.2 Property, plant and equipment

1.2.1 Mining assets Mining assets, including mine development costs and mine plant facilities, are recorded at cost of acquisition.

Expenditure incurred to develop new ore bodies, to define mineralisation in existing ore bodies, to establish or expand productive capacity and expenditure designed to maintain productive capacities, are capitalised until commercial levels of production are achieved.

1.2.2 Mineral and surface rights Mineral and surface rights are recorded at cost of acquisition.

1.2.3 Land Land is shown at cost and is not depreciated.

1.2.4 Gain or loss on disposal or retirement of assets The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined

as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

1.3 Depreciation

1.3.1 Depreciation of mining assets and mineral and surface rights Mining assets, mine development costs, mineral and surface rights and plant mine facilities are depreciated over

the lives of the mines using the units-of-production method based on estimated proved and probable ore reserves or where impractical, directors’ estimates subject to a maximum life of mine of 20 years.

The assets of the underlying mines are depreciated over the following periods: Consolidated Murchison Mine 10 years Vergenoeg Mine 20 years Chibuluma South 15 years Barberton Mines 15 years Ruashi 20 years Sable 10 years



1. ACCOUNTING POLICIES (continued)

1.3 Depreciation (continued)

1.3.1 Depreciation of mining assets and mineral and surface rights (continued)

Other mining plant and equipment is depreciated on the straight-line basis over the shorter of the life of the mine or their estimated useful lives.

1.3.2 Depreciation of non-mining assets Buildings and other non-mining assets are recorded at cost and depreciated on the straight-line basis over their

expected useful lives, which vary between 4 to 10 years.

1.3.3 Mining exploration Expenditure on exploration activities is capitalised until the viability of the mining venture has been proven. If the

mining venture is subsequently considered non-viable the expenditure is charged against income as and when that fact becomes known.

1.4 Impairment (except for goodwill) At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine

whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Impairment losses are immediately recognised as an expense. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.5 Goodwill Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s interest in the

fair value of the identifiable assets and liabilities of a subsidiary, associate or jointly controlled entity at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated impairment losses.

For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

On disposal of a subsidiary, associate or jointly controlled entity, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

1.6 Taxation The charge for current tax is based on the results for the year as adjusted for items which are non-assessable or disallowed.

It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit. In principle, deferred tax liabilities are recognised for all taxable temporary differences, and deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than a business combination) of other assets and liabilities in a transaction, which affects neither tax nor accounting profit.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled. Deferred tax is charged or credited to the income statement, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt within equity.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or parts of the asset to be recovered.



1. ACCOUNTING POLICIES (continued) 1.7 Provisions Provisions are recognised when the Group has a legal or constructive obligation resulting from past events and it is

probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

1.8 Foreign currencies Transactions in currencies other than Rands are initially recorded at the rates of exchange ruling on the dates of the

transactions. Monetary assets and liabilities denominated in such currencies are retranslated at the rates ruling at the balance sheet date. Profits and losses arising on exchange are dealt with in the income statement.

In order to hedge its exposure to foreign exchange risks, the Group may enter into forward contracts (see note 1.18 for details of the Group’s accounting policies in respect of such derivative financial instruments).

On consolidation, the assets and liabilities of the Group’s foreign operations are translated at exchange rates ruling at the balance sheet date. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising from the translation of foreign operations are classified as equity and are recognised as income or expenses in the period in which the operation is disposed of. Translation differences on foreign loans to subsidiaries which are classified as equity loans are accounted for as non-distributable reserves.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the reporting entity and are recorded using the exchange rate at the date of the transaction.

1.9 Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets

that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the cost of those assets.

All other borrowing costs are recognised in net profit or loss in the period in which they are incurred.

1.10 Consumable stores and product inventories

Consumable stores are valued at the lower of cost, determined on a weighted average basis, and estimated net realisable value. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. Obsolete and slow-moving consumable stores are identified and are written down to their economic or realisable values. Product inventories are valued at the lower of cost, determined on a weighted-average basis, and net realisable value. Costs include direct mining costs and mine overheads.

1.11 Retirement benefits

Payments to defined contribution retirement benefit plans are charged as an expense as they fall due. Payments made to state-managed schemes are dealt with as defined contribution plans where the Group’s obligations under the schemes are equivalent to those arising in a defined contribution retirement benefit plan.

1.12 Post-retirement benefits other than pension Certain companies within the Group provide retirement benefits by way of medical-aid schemes for employees. Charges

to the income statement are based on an accrual basis. The estimated cost for retiree health-care is accrued during the participants’ actual service periods, up to the date they become eligible for full benefits.

1.13 Equity participation plan The Group provides equity participation plans in the form of share options issued at the then ruling market price. Refer

to note 30 for the accounting policy.

1.14 Provision for environmental rehabilitation costs Long-term environmental obligations are based on the Company’s environmental plans, in compliance with current

environmental and regulatory requirements.

Full provision is made based on the net present value of the estimated cost of restoring the environmental disturbance that has occurred up to the balance sheet date. Increases due to additional environmental disturbances are capitalised and amortised over the remaining lives of the mines. Annual increases in the provisions relating to the change in the net present value of the provision and inflationary increases are shown separately in the income statement.

The estimated cost of rehabilitation is reviewed annually and adjusted as appropriate for changes in legislation or technology. Cost estimates are not reduced by the potential proceeds from the sale of assets or from plant clean-up at closure, in view of the uncertainty of estimating the potential future proceeds.



1. ACCOUNTING POLICIES (continued)

1.15 Provision for closure costs The Group provides for closure costs other than rehabilitation costs when the directors have prepared a detailed

plan for closure of the particular operation, the remaining life of which is such that significant changes to the plan are unlikely; and the directors have raised a valid expectation in those affected that it will carry out the closure by starting to implement that plan or announcing its main features to those affected by it.

1.16 Revenue recognition Revenue represents the value of minerals sold, excluding value-added tax and is recognised when goods are delivered

and risk and reward has passed, and is measured at the fair value of the consideration received or receivable.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the interest rates applicable.

Dividend income from investments is recognised when the shareholders’ rights to receive payment have been established.

1.17 Financial instruments Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group has become a party

to the contractual provisions of the instrument.

Financial assets The Group’s principal financial assets are bank balances and trade receivables.

Trade receivables are initially recorded at fair value and subsequently measured at amortised cost, using the effective-interest-rate value as reduced by appropriate allowances for estimated irrecoverable amounts.

Financial liabilities Significant financial liabilities include interest-bearing loans, overdrafts and trade and other payables.

Interest-bearing bank loans and overdrafts are initially recorded at the proceeds received and subsequently measured at the amortised cost using the effective-interest-rate method. Finance charges, including premiums payable on settlement or redemption, are accounted for on the accrual basis and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. Trade and other payables are initially recorded at fair value and subsequently measured at amortised cost using the effective-interest-rate method.

Equity instruments Equity instruments are recorded at the proceeds received, net of direct issue costs.

1.18 Derivative financial instruments Derivative financial instruments are initially recorded at cost and are remeasured to fair value at subsequent reporting

dates.

Changes in the fair value of derivative financial instruments that are designated as and are effective as cash flow hedges are recognised directly in equity. Amounts deferred in equity are recognised in the income statement in the same period in which the hedged firm commitment or forecast transaction affects net profit or loss.

1.19 Leases Assets held under finance leases are recognised as assets of the Group at their fair value at the date of acquisition. The

corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are charged to the income statement over the term of the relevant lease. Operating leases are accounted for on a systematic basis over the period of lease.

1.20 Non-current assets held-for-sale Non-current assets and disposal groups are classified as held-for-sale if their carrying amount will be recovered

principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

1.21 Cash and cash equivalents Cash and cash equivalents comprise cash-on-hand and demand deposits, and other short-term highly liquid investments

that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.



Group Company

2007 2006 2007 2006

R000 R000 R000 R000

2. COST OF PRODUCTION

Mining 131 804 89 358 32 162 29 029

Salaries and wages 320 451 262 239 106 148 87 046

Processing 282 688 129 543 29 832 29 490

Engineering and technical 135 065 107 654 12 549 11 220

Administration 84 563 37 751 15 599 12 125

Inventory movement (11 593) 2 980 (2 422) 1 031

Depreciation 102 799 53 598 5 925 3 879

1 045 777 683 123 199 793 173 820

3. OPERATING LEASES

At the balance sheet date, the Group had outstandingcommitments under non-cancellable operating leases mainly in respect of office equipment, security cameras, building rentals and compressors, which fall due as follows:

Within one year 10 115 9 313 6 725 7 200

Years 2 to 5 10 344 7 650 8 330 5 053

20 459 16 963 15 055 12 253

4. OTHER INCOME

Management and technical fees 987 946 33 091 26 156

Dividends received – subsidiaries 79 820 41 118

Foreign exchange gains/(losses) 147 4 230 (293) 4 050

Impairment reversal – Chibuluma South 48 932 — — —

Profit on disposal of assets 71 1 014 — —

Share option expense (3 496) (4 036) (1 719) (2 080)

Rehabilitation (649) (626) (49) (425)

Royalties (9 054) (1 672) — —

Sundry other 4 735 6 285 13 505 351

41 673 6 141 124 355 69 170

5. OPERATING PROFIT BEFORE FINANCE COSTS

Is stated after charging:

Audit fee

– current year 1 907 1 783 784 619

– prior year 205 (4) — —

Operating leases and rentals– equipment and buildings 8 024 4 398 4 776 3 066

Exploration expenditure 5 149 4 508 1 455 1 896

6. FINANCE COSTS

Interest paid (11 920) (7 640) (13 527) (3 483)

(11 920) (7 640) (13 527) (3 483)


20072007 2006 20072007 2006

R000R000 R000 R000R000 R000



Group Company

2007 2006 2007 2006

R000 R000 R000 R000

7. INCOME TAX EXPENSE

South African normal taxation

– current year 35 692 14 348 — 5 769

– prior year (87) 247 — —

Deferred taxation

– current year 89 248 48 482 19 767 13 098

– prior year 6 981 (16) — —

Secondary taxation on companies

– current year 875 814 — —

Total taxation charge – continuing operations 132 709 63 875 19 767 18 867

Profit before taxation – continuing operations 535 693 223 345 146 408 103 644

Taxation at the domestic taxation rate of 29% 155 351 64 770 42 458 30 057

Secondary taxation on companies 875 814

Underprovision – prior year 6 894 231

(Exempt income)/non-deductible expenses (23 199) 1 801 863 (11 190)

Taxation rate differentials (7 212) (3 741) (23 554) —

Taxation expense for the year – continuing operations 132 709 63 875 19 767 18 867

Effective taxation rate for the year – continuing operations 24,8% 28,6% 13,5% 18,2%

South African Revenue Services, in their latest revised assessments, assessed Maranda Mines (Pty) Limited for R5,1 million on imputed interest and also assessed unrealised foreign exchange gains and losses on a capital loan to Chibuluma Mines plc. Maranda Mines (Pty) Limited is in the process of contesting these assessments and is confident of a favourable outcome. As a result, no provision has been made for the additional assessments.

Unredeemed capital expenditure/assessable tax loss available and recognised in deferred taxation 196 018 250 843 1 126 1 071

STC credit recognised in deferred taxation 543 543 543 543


20072007 2006 20072007 2006

R000R000 R000 R000R000 R000



8. EARNINGS PER SHARE AND HEADLINE EARNINGS PER SHARE

Earnings per share (“EPS”)

EPS is based on the Group’s net profit for the year attributable to equity holders of the parent, divided by the weighted average number of shares in issue during the year.

2007 2006

Net profit Shares Per share Net profit Shares Per shareR000 (000) (cents) (R000) (000) (cents)

From continuing and discontinued operations

Basic EPS 555 713 302 810 183,5 155 394 286 147 54,3

Share options 555 713 10 291 (6,0) 155 394 6 308 (1,2)

Diluted EPS 555 713 313 101 177,5 155 394 292 455 53,1

From continuing operationsBasic EPS 326 732 302 810 107,9 113 600 286 147 39,7

Share options 326 732 10 291 (3,5) 113 600 6 308 (0.9)

Diluted EPS 326 732 313 101 104,4 113 600 292 455 38,8

Headline earnings per share

Headline earnings per share is based on the Group’s headline earnings divided by the weighted average number of shares in issue during the year.

Reconciliation between earnings and headline earnings from continuing and discontinued operations

Earnings as reported 555 713 302 810 183,5 155 394 286 147 54,3

Adjustments

– Discontinued operations 1 998 0,7 2 244 0,8

– Profit on sale of mining assets, net of tax (71) — (1 014) (0,4)

– Impairment reversal after tax and minorities (31 159) (10,3)

– Profit after tax on disposal of Wakefield shares (191 768) (63,4) (20 152) (7,0)

Headline earnings per share 334 713 302 810 110,5 136 472 286 147 47,7

Share options 334 713 10 291 (3,6) 136 472 6 308 (1,0)

Diluted headline earnings per share 334 713 313 101 106,9 136 472 292 455 46,7

The profit on sale of mining assets, net of tax amounts to less than 0,1 cent per share.

9. DIVIDENDS

In view of the funding requirements of the new projects and capital-intensive expansion plans in three of the four divisions, no dividend is declared for the 12 months ended 30 June 2007 (2006 – nil).

20072007 2006

Net profitNet profit SharesShares Per sharePer share Net profit Shares Per shareR000R000 (000)(000) (cents)(cents) (R000) (000) (cents)



Group Company

2007 2006 2007 2006

R000 R000 R000 R000

10. PROPERTY, PLANT, EQUIPMENT AND MINERAL RIGHTS

Land

Cost and net book value 3 913 3 898 82 82

Building and infrastructure

Cost 92 023 79 496 30 716 30 550

Accumulated depreciation 75 707 73 430 26 590 26 553

Net book value 16 316 6 066 4 126 3 997

Plant, machinery and shafts

Cost 1 438 817 1 102 699 125 102 110 662


Net book value 780 857 514 302 24 283 11 555

Other

Cost 54 795 40 586 6 589 6 041


Net book value 17 120 2 191 2 409 2 176

Capital work in progress – cost 571 462 271 430 — —

Property, plant and equipment

Aggregate cost 2 161 010 1 498 109 220 198 194 120

Aggregate accumulated depreciation 771 342 700 222 173 195 167 207

Aggregate net book value 1 389 668 797 887 47 003 26 913

Mineral rights

Cost 1 183 205 346 462 195 195

Accumulated depreciation and impairments 22 454 44 077 195 195

Net book value 1 160 751 302 385 — —

Following the revisions to IAS 16 Property, Plant and Equipment in 2003, the Group has reviewed the residual values used for the purposes of depreciation calculations in the light of the amended definition of residual value in the revised Standard. The review did not highlight any requirement for an adjustment to the residual values used in the current or prior periods. In line with the new requirements, these residual values are reviewed annually.


20072007 2006 20072007 2006

R000R000 R000 R000R000 R000



Balance30 June

2006 Transfers Additions Disposals

Foreigncurrency

translation

Impair-ment

reversalDepre-ciation

Balance at30 June

2007

2007 R000 R000 R000 R000 R000 R000 R000 R000

10. PROPERTY, PLANT, EQUIPMENT AND MINERAL RIGHTS (continued)

Group*Land 3 898 — 15 — — — — 3 913Mineral rights 302 385 108 341 730 822 — (2 400) 47 978† (26 375) 1 160 751Building and infrastructure 6 066 9 991 2 552 — (1) — (2 292) 16 316Plant, machinery and shafts 514 302 151 076 194 754 (3 925) (3 980) — (71 370) 780 857Capital work in progress 271 430 (270 392) 575 834 — (5 410) — — 571 462Other 2 191 984 17 264 (562) 5 — (2 762) 17 120

Total 1 100 272 — 1 521 241 (4 487) (11 786) 47 978 (102 799) 2 550 419

Company*Land 82 — — — — — — 82Building and infrastructure 3 997 — 166 — — — (37) 4 126Plant, machinery and shafts 20 658 — 25 089 — — — (5 361) 40 386Other 2 176 — 760 — — — (527) 2 409

Total 26 913 — 26 015 — — — (5 925) 47 003

Balance30 June

2005Transfers/Wakefield Additions Disposals

Foreigncurrency

trans-lation

Impair-ment

Depre-ciation

Balance at30 June

2006

2006 R000 R000 R000 R000 R000 R000 R000 R000

Group*Land 207 — 3 691 — — — — 3 898Mineral rights 250 748 (6 869) 66 074 — 8 818 — (16 386) 302 385Building and infrastructure 5 597 213 2 080 — — — (1 824) 6 066Plant, machinery and shafts 519 788 (117 275) 162 366 (3 675) 9 153 (1 172) (47 477) 514 302Capital work in progress 41 431 (15 116) 241 748 — 3 367 — — 271 430Other 1 704 (19) 2 774 — — — (2 268) 2 191

Total 819 475 (139 066) 478 733 (3 675) 21 338 (1 172) (75 361) 1 100 272Company*Land 82 — — — — — — 82Building and infrastructure 2 387 — — 1 695 — — (85) 3 997Plant, machinery and shafts 16 321 — — 7 758 — — (3 421) 20 658Other 1 708 — — 841 — — (373) 2 176Total 20 498 — — 10 294 — — (3 879) 26 913* Details of land are maintained in a register at the Company’s registered office, which may be inspected by a member or their duly

authorised agents.† The impairment charge recorded in Chibuluma South in 2002 has been reversed on the basis of a significantly increased net asset

value.

Certain property, plant and equipment is encumbered (refer to note 20).

BalanceBalance30 June30 June

20062006 TransfersTransfers AdditionsAdditions DisposalsDisposals

ForeignForeigncurrencycurrency

translationtranslation

Impair-Impair-mentment

reversalreversalDepre-Depre-ciationciation

Balance atBalance at30 June30 June

20072007 R000R000 R000R000 R000R000 R000R000 R000R000 R000R000 R000R000

BalanceBalance30 June30 June

20052005Transfers/Transfers/WakefieldWakefield AdditionsAdditions DisposalsDisposals

ForeignForeigncurrencycurrency

trans-trans-lationlation

Impair-Impair-mentment

Depre-Depre-ciationciation

Balance atBalance at30 June30 June

2006

2006 R000 R000 R000 R000 R000 R000 R000 R000



Group Company

2007 2006 2007 2006

R000 R000 R000 R000

11. GOODWILL

Goodwill acquired in a business combination is allocated at acquisition to the cash-generating units (CGUs) that are expected to benefit from that business combination. Goodwill is allocated as follows:

Cost

Arising on acquisition of business: Metorex Limited 11 514 11 514 11 514 11 514

11 514 11 514 11 514 11 514

The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired.

The recoverable amounts of the CGUs are determined from value-in-use calculations. The key assumptions for the value-in-use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. Management estimates discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs. The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market.

The Group prepares cash-flow forecasts derived from the most recent financial budgets approved by management for the next five years and extrapolates cash flows for the following five years based on an estimated growth rate. This rate does not exceed the average long-term growth rate for the relevant markets.

12. INVESTMENTS

Unlisted sundry investments at cost 929 929 929 929

Directors’ valuation 929 929 929 929


20072007 2006 20072007

R000R000 R000 R000R000



13. SUBSIDIARIES

Details of the Company’s subsidiaries and investments therein at 30 June 2007 are as tabled below.

Place ofincorporation

Proportion ofownership and voting

power held%

Principalcommodity

Abbey Commodities Switzerland 100 Dormant

Chibuluma Mines Plc Zambia 85 Copper

Maranda Mines (Pty) Ltd South Africa 100 Dormant

Sable Zinc Kabwe Ltd Zambia 100 Copper/Cobalt

O’Okiep Copper Company (Pty) Ltd South Africa 100 Dormant

Vergenoeg Mining Company (Pty) Ltd South Africa 70 Fluorspar

Barberton Mines (Pty) Ltd† South Africa 74 Gold

Ruashi Holdings (Pty) Ltd# South Africa 100 Copper/Cobalt†Prior year percentage of shareholding was 54%

#Prior year percentage of shareholding was 84%

INVESTMENTS IN SUBSIDIARIES

LoansCost

(net of impairment)

2007 2006 2007 2006

R000 R000 R000 R000

Abbey Commodities (3 964) (4 027) 37 37

Chibuluma Mines Plc 297 636 304 094 121 121

Maranda Mines (Pty) Ltd (2 279) (2 279) 53 498 53 498

Sable Zinc Kabwe Ltd 105 723 98 786 692 692

O’Okiep Copper Company (Pty) Ltd (1 789) 4 188 — —

Vergenoeg Mining Company (Pty) Ltd — — 52 500 52 500

Wakefield Investments (Pty) Ltd — — — 30 000

Barberton Mines (Pty) Ltd — — 137 846 93 533

Ruashi Holdings (Pty) Ltd/Ruashi Mining Sprl 858 472* 250 867* 381 343 53 589

1 253 799 651 629 626 037 283 970

Loans to subsidiaries 1 253 799 651 629

1 879 836 935 599

*Interest-bearing at market-related rates.

Loans to/(from) subsidiaries carry no fixed terms of repayment and are interest-free, except where noted otherwise.

Place ofPlace ofincorporationincorporation

Proportion ofProportion ofownership ownership and voting and voting

power heldpower held%%

PrincipalPrincipalcommoditycommodity

LoansLoansCostCost

(net of impairment)(net of impairment)

20072007 2006 20072007 2006

R000R000 R000 R000R000 R000



Group Company

2007 2006 2007 2006

R000 R000 R000 R000

14. INVENTORIES

Consumable stores 41 843 20 878 6256 6 128

Product inventories 39 275 22 074 3 718 1 295

81 118 42 952 9 974 7 423

No inventory (2006: Rnil) is carried at net realisable value, and no inventory (2006: R1,4 million) is pledged as security.

15. TRADE AND OTHER RECEIVABLES

Trade receivables 322 543 139 766 18 398 19 918

Other receivables 68 111 62 850 12 921 6 825

390 654 202 616 31 319 26 743

The directors consider that the trade and other receivables approximate their fair value. Certain Group companies have ceded their trade receivables as security for banking and overdraft facilities. As at year-end amounts totalling R147,9 million (2006: R156,5 million) included in receivables were pledged. Included in Group trade and other receivables are uncovered Dollar-denominated receivables of $15,6 million (2006: $16,3 million).

16. SHARE CAPITAL

Authorised

350 000 000 (2006: 350 000 000) ordinary shares of 10 cents each 35 000 35 000 35 000 35 000

Issued and fully paid

324 540 835 (2006: 289 026 203) ordinary shares of 10 cents each 32 454 28 903 32 454 28 903

Shares issued31 August 2006: 7,5 million shares at R11,25/share – Acquisition of minority interests from Crew in Barberton.

27 March 2007: 12,7 million shares at R13,10/share– Acquisition of minority interests from IDC in Chibuluma South.

3 April 2007: 12,5 million shares at R21,35/share – Acquisition of minority interests from Sentinelle in Ruashi Holdings.

During the year 2,9 million shares were issued at an average price of R2,52 per share in terms of the Metorex Share Incentive Scheme.

The unissued shares of the Company have been placed under the control of the directors until the next annual general meeting.


20072007 2006 20072007 2006

R000R000 R000 R000R000 R000



Group Company

2007 2006 2007 2006

R000 R000 R000 R000

17. HEDGING AND TRANSLATION RESERVE

Hedging reserve (73 818) (106 614) (11 345) (18 561)

Foreign exchange translation reserve (24 414) (28 246) — —

Translation (loss)/gain on foreign monetary item (16 898) (10 342) 16 480 16 480

(115 130) (145 202) 5 135 (2 081)

18. MINORITY INTEREST

Retained income attributable to minorities 94 711 120 115

Share in hedging reserve (27 707) (54 132)

Preference shares 2 687 28 457

Equity loan — 58 998

69 691 153 438

The equity loan is interest-free, unsecured and has no fixed terms of repayment.

The preference shares issued in Barberton Mines (Pty) Ltd are entitled to a cumulative variable rate preferential dividend at the directors’ discretion. The preference shares are fully redeemable at the option of Barberton Mines (Pty) Ltd.

19. SHAREHOLDER LOANS

Interest rate

Metallica Trust Fixed 8% — 2 754 — 2 754

— 2 754 — 2 754

Less: repayable within the next 12 months — 2 754 — 2 754

Total current portion — 2 754 — 2 754

The Metallica Trust loan was unsecured.


20072007 2006 20072007 2006

R000R000 R000 R000R000 R000



Group Company

2007 2006 2007 2006

R000 R000 R000 R000

20. LONG-TERM LIABILITIES

Term loansBridging loan – Ruashi Phase II development. The loan is to roll into project finance approved by Standard Bank and the Export Credit Insurance Corporation of South Africa. The facility terms are: Capital moratorium ends 31 December 2008, repayment period four years at an average interest rate of Libor + 1,5% and secured by underlying assets and Metorex guarantee until project completion 354 756 — 354 756 — Secured by a pledge of Barberton Mines shares and a cession of the Sable Zinc loan account and is repayable in 48 monthly instalments commencing on 30 June 2006. The loan bears interest at prime less 1% — 49 927 — 49 927Mortgage bond over Farm Kromdraai JR 209. The loan bears interest at prime less 2% and is repayable in 60 monthly instalments from 19 August 2005 2 347 3 110 — —Instalment finance and lease agreementsSecured by the underlying assets with a net book value of R9 million. Bears interest at 7,3% to 7,5%, is US dollar-denominated and repayable quarterly in arrears over 36 months. 951 3 767 — —Secured by the underlying assets with a net book value of R15 million. Bears interest at a variable rate of 8% and repayable in 36 monthly instalments in arrears and the loan is US value + rate-denominated 15 937 14 428 — —Secured by the underlying assets, the loan is repayable in 36 monthly instalments and bears interest at prime less 1% to prime less 2% 10 037 — — —Secured by the underlying asset with a net book value of R3,5 million. Bears interest at a fixed rate of 9,6%, is US value + rate-denominated and repayable monthly in arrears over 36 months 2 024 3 231 — —Bears interest at a fixed rate of 10%, is Euro-denominated and repayable monthly in arrears over 36 months — 1 965 — —Loan bearing interest at the South African prime rate and is repayable in 24 equal monthly instalments from 1 October 2004, secured by underlying assets — 2 063 — 2 063 Secured by the underlying assets. The loan is repayable in 36 monthly instalments and bears interest at prime less 1% to prime less 2% 7 622 2 039 — —Secured by the underlying assets with a net book value ofR3 million and repayable in 36 monthly instalments. The loan is US value + rate-denominated and bears interest at 8,6% per annum 625 1 775 — — Unsecured, bears interest at prime less 1,5% and is repayable in 36 monthly instalments 4 051 4 146 — —Value by the underlying assets, the loan is repayable in 36 monthly instalments from 30 June 2004 and bears interest at 10% per annum 2 461 — — — Secured by the underlying assets with a net book value ofR2 million and repayable in 36 monthly instalments from30 April 2005. The loan is US value + rate-denominated and bears interest at a fixed rate of 9% per annum 667 1 399 — —

401 478 87 850 354 756 51 990


20072007 2006 20072007 2006

R000R000 R000 R000R000 R000



Group Company

2007 2006 2007 2006

R000 R000 R000 R000

20. LONG-TERM LIABILITIES (continued)Less: repayable within the next twelve months from operating activities:– term loans 741 11 836 — 10 771– instalment finance and lease agreements 21 487 18 012 — 2 063Total current portion 22 228 29 848 — 12 834Net long-term liabilities 379 250 58 002 354 756 39 156Net long-term liabilities are all repayable within five years. The Company’s Articles of Association do not restrict the level of borrowings.

21. PROVISIONSLong-term provisionsTerminal benefits 19 520 18 168 — —Rehabilitation provision 64 944 43 713 — —

84 464 61 881 — —Current provisionsTerminal benefits — 2 504 — —Pension fund shortfall 1 979 6 053 — —Rehabilitation provision — 1 365 — —Leave pay and bonuses 24 779 21 740 8 674 7 437Other 2 364 1 343 1 343 1 343

29 122 33 005 10 017 8 780Total provisions 113 585 94 886 10 017 8 780Balance at beginning of year 94 886 81 377 8 780 8 355Utilised during the year (19 081) (20 377) (7 599) (7 179)Foreign currency reserve (560) 1 179 — —Provided during the year 38 340 32 707 8 836 7 604Balance at end of year 113 585 94 886 10 017 8 780Deferred income is grouped under provisions

Terminal benefitsThe terminal benefits provision represents the directors estimate of the portion of the terminal benefits liability outstanding relating to the period of employment of certain employees of Chibuluma Mines plc.

Pension fund shortfallThe pension fund shortfall provision is the full provision made by O'Okiep for all the estimated remaining costs of the indicated actuarial deficit, as established by independent actuaries on the prescribed minimum basis method in the defined benefit plan, operated by the Group on behalf of the previous employees.

Rehabilitation trust fundThe Group is exposed to environmental liabilities relating to its mining operations. Estimates of the cost of environmental and other remedial work such as reclamation costs, close down and restoration and pollution control are made on an annual basis, based on the estimated life of the mine, following which payments are made to a rehabilitation trust set up as required by the Minerals Act and Regulations.

The individual companies in the Group contribute, for their own account, to the Metorex Rehabilitation Trust Fund. The directors of the Company are satisfied that sufficient funds will be available to complete the rehabilitation required on cessation of mining activities.

Leave payThe provision for leave pay is provided for, based on the total cost of employment of employees and the amount of leave days owing to them.


20072007 2006 20072007 2006

R000R000 R000 R000R000 R000



Group Company

2007 2006 2007 2006

R000 R000 R000 R000

21. PROVISIONS (continued)

Rehabilitation trust fund (continued)

The balance of the environmental rehabilitation trust fund, which is represented by cash, was as follows:

Balance at beginning of the year 33 864 43 033

Transferred to assets held-for-sale — (7 192)

Withdrawals, net (877) (4 354)

Interest earned during the year 2 353 2 377

Balance at end of the year 35 340 33 864

22. DEFERRED TAX

22.1 Deferred tax liabilities

Property, plant and equipment 438 492 153 214 12 138 7 415

Leave pay provision (5 838) (5 188) (2 515) (2 157)

Other provisions (5 760) (5 343) (744) (735)

Foreign exchange (17 794) (10 182) — —

Assessed tax losses (10 106) ( 6 469) — (311)

STC credit (543) (543) (543) (543)

Other 17 599 (417) 20 971 5 871

Net deferred tax liabilities 416 050 125 072 29 307 9 540

Reconciliation of deferred tax liabilities

Net deferred tax liabilities at the beginning of the year 125 072 74 456 9 540 —

Transfer from deferred tax asset opening balance (262) (16 170) — (3 558)

Transferred to assets held-for-sale — 2 874 — —

Deferred tax charge for the year 98 150 48 729 19 767 13 098

Deferred tax on equity loan included in non-distributable reserve (2 182) 12 696 — —

Translation difference (2 788) 2 487 — —

Deferred tax raised on additional mineral rights 198 060

Net deferred tax liabilities at end of the year 416 050 125 072 29 307 9 540

22.2 Deferred tax asset

Property, plant and equipment 39 169 — — —

Leave pay provision (319) — — —

Other provisions (300) — — —

Foreign exchange 346 (262) — —

Assessed tax losses (34 687) — — —

STC credit/other (6 096) — — —

Net deferred tax asset (1 887) (262) — —


20072007 2006 20072007 2006

R000R000 R000 R000R000 R000



Group Company

2007 2006 2007 2006

R000 R000 R000 R000

22. DEFERRED TAX (continued)

22.2 Deferred tax asset (continued)

Reconciliation of deferred tax asset

Net deferred tax asset at the beginning of the year (262) (16 170) — (3 558)Transfer to deferred tax liability opening balance 262 16 170 — 3 558Deferred tax charge for the year (1 921) (262) — —Translation difference 34 — — —

Net deferred tax asset at the end of the year (1 887) (262) —

Deferred tax asset not recognised

Property, plant and equipment 5 322 4 880 — —

5 322 4 880 — —

The following table shows the movement in the unrecognised deferred tax asset for the year:

Opening balance 4 880 5 042 — —

Net unrecognised deferred tax asset raised/(released) during the current year 442 (162) — —

Closing balance 5 322 4 880 — —

23. POST-RETIREMENT MEDICAL AID

The Group sponsors defined benefit post-retirement plans that provide certain health-care benefits to eligible employees. Full provision is made for the liability and is based on internal assessments. The following table provides the changes in the obligation:

Benefit obligation at beginning of year 9 148 9 470 2 538 2 469

Transferred in 278 — — —

Interest cost 509 69 27 69

Benefits paid (455) (226) — —

Released to income statement (483) (165) — —

Benefit obligation at end of year 8 997 9 148 2 565 2 538

Discount rate to estimate accumulated benefit (%) 12 12 12 12

Health-care cost inflation (%) 12 12 12 12

24. GENERAL BANKING FACILITIES

R000

The Group has the following banking facilities at 30 June 2007:

Metorex Limited 44 000

Barberton Mines (Pty) Limited 8 000

Consolidated Murchison Division 1 000

Vergenoeg Mining Company (Pty) Limited* 15 000

Ruashi Mining Sprl 704

Sable Zinc Kabwe Limited 3 520

* Secured by trade receivables

The banking facilities are revised on an annual basis 72 224

R000R000


20072007 2006 20072007 2006

R000R000 R000 R000R000 R000



25. FINANCIAL INSTRUMENTS

25.1 Risk management objectives and policies

In the normal course of its operations the Group is exposed to commodity price, currency, interest-rate, liquidity and credit risk. In order to manage these risks, the Group has developed a comprehensive risk management process to facilitate control and monitoring of these risks. General corporate hedging unrelated to any specific project is not undertaken. The Group also does not issue or acquire derivative instruments for speculative purposes.

Credit risk

The Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables, estimated by the Group’s management based on the current economic environment. The Group has no concentration of credit risk in any specific country or specific commodity.

The credit risk on liquid funds is limited because the counter-parties are banks with high credit ratings.

Foreign currency commodity price risk

The Group enters into forward contracts in order to hedge their exposure to fluctuations in mineral prices and exchange rates on specific transactions. The contracts are matched with anticipated future cash flows from mineral sales.

In the normal course of business, the Group primarily enters into transactions for the sale of its commodities, denominated in US Dollars. In addition, the Group has some investments and liabilities in US Dollars and Euros. As a result, the Group is subject to transactions and translation exposure from fluctuations in foreign currency exchange rates.

Interest rate and liquidity risk

Fluctuations in interest rates impact on the value of short-term investment and financing activities, giving rise to interest rate risk.

In the ordinary course of business, the Group receives cash proceeds from its operations and is required to fund working capital and capital expenditure requirements. The cash is managed to ensure that surplus funds are invested to maximise returns whilst ensuring that capital is safeguarded to the maximum extent by only investing with reputable financial institutions.

Contractual arrangements for committed borrowing facilities are maintained with several banking counter-parties to meet the Group’s normal and contingency funding.

25.2 Fair value of financial instruments25.2.1 Derivative financial instruments

2007Commodity hedges – On balance sheetCommodity Maturity Volume Average Fair value

forwardrate

lossR000

Gold – Consolidated Murchison* 14 months 299 kg R115 668/kg (11 346)Copper – Chibuluma South 3 months 1 610 tons US$7 678/ton 720Copper – Ruashi (Zero cost collars) 12 months 2 400 tons US$3 000/ton

– US$3 511/ton (64 113) – Ruashi (Zero cost collars) 12 months 1 200 tons US$6 500/ton

– US$8 040/ton (817)Gold – Barberton 4 months 330 kg R102 334/kg (15 488)

(91 044)Foreign currency hedges – On balance sheetCurrency Maturity Amount Average Fair value

forward rate profit US Dollar 1–2 months US$1 169 318 R7,21/US$ 177Total (90 867)

Commodity Maturity Volume Average Fair value forward

rateloss

R000

Currency Maturity Amount Average Fair valueforward rate profit



25. FINANCIAL INSTRUMENTS (continued)25.2 Fair value of financial instruments (continued)

25.2.1 Derivative financial instruments (continued)2006Commodity hedges – On balance sheetCommodity Maturity Volume Average Fair value

forwardrate

lossR000

Gold – Consolidated Murchison* 9 months 478 kg R105 700/kg (18 562)Copper – Chibuluma South 12 months 2 375 tons US$5 308/ton (32 340)Copper – Ruashi 12 months 2 400 tons US$3 568/ton (56 508)Gold – Barberton 12 months 1 110 kg R90 300/kg (54 069)

(161 479)Foreign currency hedges – On balance sheetCurrency Maturity Amount Average Fair value

forward rate

lossR000

US Dollar 1–6 months US$7 882 000 R7,24/US$ 599Total (160 880)* Represents the Company

25.2.2 Other financial assets and liabilitiesTrade and other receivables, trade and other payables and cash equivalentsThe carrying amount approximates fair value due to the short maturity of these instruments. Included in trade and other payables on the face of the balance sheet, is uncovered foreign currencies amounting to US Dollars 28,1 million (2006: US Dollar 12,6 million).InvestmentsThe carrying amount of these instruments approximates fair value due to the nature of the instrument.Long-term loansThe significant long-term loans all have variable interest rates. The carrying amounts are considered to approximate fair value.

Group Company

2007 2006 2007 2006

R000 R000 R000 R000

26. CAPITAL COMMITMENTS

Authorised by directors but not contracted for 31 223 38 032 — 7 090

Authorised by directors and contracted for 716 546 33 151 12 645 —

747 769 71 183 12 645 7 090

Capital commitments mainly relate to the Ruashi Phase II project and will be financed by a combination of a $155 million project finance facility and internal resources.

27. RETIREMENT BENEFIT INFORMATION Contributions are made by the Group to independent pension and provident funds which are defined contribution retirement

benefit plans governed by the Pension Fund Act 1956. All eligible employees are required to become members of either of these schemes. The assets of the schemes are held separately from those of the Group in funds under the control of the trustees.

Ex-ZCCM employees at Chibuluma Mines Plc ceased to contribute to the Zambian state-managed defined benefit scheme. Various options are currently being considered.

Costs charged to income of R21,1 million (2006: R17,7 million) represent contributions payable to these defined contribution schemes, excluding the O’Okiep defined benefit plan, by the Group at rates specified in the rules of the schemes.

28. STAFF COMPLEMENT At 30 June 2007: 3 918 (2006: 4 522) people were employed by the Group.


20072007 2006 20072007 2006

R000R000 R000 R000R000 R000

Commodity Maturity Volume Average Fair value forward

rateloss

R000

Currency Maturity Amount Average Fair valueforward

rateloss

R000



2007 2006R000 R000

29. DIRECTORS’ EMOLUMENTSEx ecutive directorsEmoluments 7 561 5 473Company contributions 700 671Share options 10 060 407Total 18 321 6 551Non-executive directorsEmoluments 370 370Total 370 370TOTAL 18 691 6 921

Individual directors’ emoluments

Shareoptions

exercisedand sold

R000

Basic salaryR000

BonusesR000

Vehicle allowances

R000

Subsistence allowances

R000

Companycontributions†

R000

2007TotalR000

2006TotalR000

ExecutiveMr A S Malone — 792 598 168 12 178 1 748 1 450Mr C D S Needham 5 535 1 358 876 180 40 172 8 161 2 161Mr E W Legg 1 428 930 561 139 96 175 3 329 1 450Mr K C Spencer 3 097 1 057 567 141 46 175 5 083 1 490Total 10 060 4 137 2 602 628 194 700 18 321 6 551

Fees forservices

R0002007R000

2006R000

Non-ExecutiveMr A Barrenechea 110 110 110Mr A J Laughland 110 110 110Mr R G Still 150 150 150Total 370 370 370The directors have no fixed term service contracts.†Pension and medical aid

2007 Share options

Total options

1 July 2006Options granted

Options exercised

Averageoption

pricecents

Totaloptions30 June

2007Mr A S Malone 1 000 000 — — 278 1 000 000Mr C D S Needham 1 000 000 — (318 750) 291 681 250Mr K C Spencer 900 000 — (350 000) 290 550 000Mr E W Legg 800 000 — (75 000) 260 725 000Mr A Barrenechea 200 000 — — 695 200 000Mr A J Laughland 200 000 — — 695 200 000Mr R G Still 200 000 — — 695 200 000Total 4 300 000 — (743 750) 3 556 250

2006 Share options

Total options


Options exercised

Averageoption

pricecents

Totaloptions30 June

2006Mr A S Malone 1 000 000 — — 278 1 000 000Mr C D S Needham 1 200 000 — (200 000) 291 1 000 000Mr K C Spencer 900 000 — — 290 900 000Mr E W Legg 800 000 — — 260 800 000Mr A Barrenechea — 200 000 — 695 200 000Mr A J Laughland — 200 000 — 695 200 000Mr R G Still — 200 000 — 695 200 000Total 3 900 000 600 000 (200 000) 4 300 000

Fees forservices

R00020072007R000R000

2006R000

2007 Share options2007 Share options

TotalTotal options options

1 July 20061 July 2006OptionsOptions granted granted

OptionsOptions exercised exercised

AverageAverageoption option

pricepricecentscents

TotalTotaloptionsoptions30 June30 June

2007 2007

2006 Share options

Total options


Options exercised

Averageoption

pricecents

Totaloptions30 June

2006

20072007 2006R000R000 R000



30. SHARE-BASED PAYMENTS

Equity-settled share option scheme

The Company has a share incentive scheme for eligible employees of the Group. Options are offered at a price equal to the average quoted market price of the Company’s shares on the business day preceding the offer date. The vesting period is between two and five years and is subject to Board approval. Options lapse if not implemented within 10 years of the option date. Options are forfeited if the employee leaves the Group before the options vest.

Details of the share options outstanding during the year are:

30 June 2007 30 June 2006

Number ofshare

options

Weightedaverageexercise

priceR

Number ofshare

options


priceR

Outstanding at the beginning of the year 11 107 500 2,54 12 765 402 2,70

Granted during the year 2 378 750 16,05 1 235 000 7,49Cancelled on resignation, retrenchment or retirement — — — —Exercised during the year (2 884 875) 2,62 (2 892 902) 2,54Outstanding at the end of the year 10 601 375 6,54 11 107 500 2,70Exercisable at the end of the year 2 345 150 3 100 000 —Options exercisable between 3 and 9 years.

The weighted average share price at the date of exercise for share options exercised during the year was R18,00. During 2007, the following options were granted:

SharesOption

price

15 November 2006 1 478 750 15,39

4 December 2006 150 000 15,00

2 January 2007 150 000 15,87

8 January 2007 200 000 14,50

1 February 2007 150 000 17,18

22 March 2007 250 000 21,25

2 378 750 16,05

The fair values were calculated using the American-Binomial option-pricing model. The inputs into the model were as follows:

30 June 2007

Weighted average share price (R) 6,03

Weighted average exercise price (R) 6,02Expected volatility 47%Expected life 2 to 5 yearsRisk-free rate 8,4%Expected dividend yield 2,5% to 4,6%

Expected volatility was determined by calculating the historical volatility of the Company’s share price over the previous eight years. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

The Group recognised total expenses of R3,5 million (2006: R4 million) related to equity-settled share-based payment transactions during the year.

30 June 200730 June 2007 30 June 2006

Number ofNumber ofshareshare

optionsoptions

WeightedWeightedaverageaverageexerciseexercise

pricepriceRR

Number ofshare

options


priceR

30 June 200730 June 2007

SharesOption

price



31. NON-CURRENT ASSETS HELD-FOR-SALE

During the 2007 financial year, the Group signed a definitive sale-of-shares agreement to dispose of the Group’s entire 74% shareholding in the Coal division, Wakefield Investments (Pty) Limited for R338 million. The disposal is in line with the Group’s strategy of investing in high-quality, long-life mining projects.

The proceeds from the sale of the Coal division, of which the definitive sales agreement was signed on 4 September 2006, significantly exceeded the net carrying amount of the relevant assets and liabilities.

The fixed assets of O'OKiep have been classified to assets held-for-sale as this entity is classified as a discontinued operation and fixed asset sales are progressing.

The operating results relating to Wakefield and O'OKiep are detailed below:

Year ended30 June 2007

R000


R000

Revenue – coal sales 582 778 440 779

Realisation costs 7 344 16 722

Cost of production 475 911 352 607

Other income/(expenditure) (25 257) (2 429)

Finance costs, net 629 2 085

Profit before taxation 73 637 66 936

Income tax expense 22 650 16 750

Profit after tax 50 987 50 186

The major classes of assets and liabilities comprising Wakefield and O'OKiep are as follows:


R000


R000

Property, plant and equipment 4 714 132 197

Mineral rights — 6 869

Goodwill — 6 796

Investments 7 709* 40 004

Current assets — 98 628

Total assets 12 423 284 494

Deferred tax liability — (10 913)

Long-term provisions — (40 582)

Long-term liabilities — (8 328)

Current liabilities — (78 769)

Liabilities — (138 592)

Net assets of disposal group – assets held-for-sale 12 423 145 902

* The rehabilitation trust funds held in the Metorex Group Rehabilitation Trust Fund relating to Wakefield Investments (Pty) Ltd would only be transferred to the new owner once approved by the Department of Minerals and Energy.

Year endedYear ended30 June 200730 June 2007

R000R000


R000

Year endedYear ended30 June 200730 June 2007

R000R000


R000



32. RELATED PARTIES

The immediate parent and ultimate controlling party of the Group is Metorex Limited (incorporated in the Republic of South Africa).

Transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed separately.

Furthermore, the Group did not enter into any significant transactions during the year with related parties that are not members of the Group.

The remuneration of directors, who are defined as key management of the Group, is determined by the remuneration committee having regard to their performance and market trends, is disclosed under note 29.

33. CONTINGENT LIABILITIES

The Board of Directors is of the opinion that no significant contingent liabilities exist as at 30 June 2007.


SUPPLEMENTARY INFORMATION

GROUP SAFETY STATISTICS

The Group conducts its activities with due regard to the safety and health of its employees and runs approved training programmes through its respective training centres. Barberton Mines (Pty) Limited was awarded a Million Fatality-Free Shifts trophy for which the management and staff are to be commended. The Group is pleased to report that it experienced no fatalities during the past year and commends mine and divisional managements for this achievement.

Sable Ruashi Barberton Chibuluma Cons Murch Vergenoeg

Dressing cases 1 52 245 5 30 17

Lost time accidents 4 6 44 10 25 2

Reportables 3 — 15 10 11 —

Lost shifts 47 167 495 193 722 2

Fatalities — — — — — —

Cumulative fatality free shifts 148 920 219 792 1 761 045 576 921 628 215 593 289

Chibuluma reportables are for a period in excess of three days and all other companies’ reportables are for periods of fourteen days or longer.The following operations were recognised by the Department of Minerals & Energy and were awarded the following:Barberton The Fairview Section achieved 1 million fatality free shifts on 14 October 2006. Fairview Section also

achieved “The Mine Health and Safety Achievement Flag” for an improved safety record, for the period, July 2003 to 30 June 2006 in the shallow mines category.

MINERAL TITLE

Mine or Prospect Farm name Type of title Hectares

Barberton Mines (Pty) Limited

Fairview Mine Worral 352 JU Old order mining rights

Bickenhall 346 JU Old order mining rights

Hayward 310 JU Old order mining rights

Various lots Old order mining rights

Sheba Mine Camelot 320 JU Old order mining rights


New Consort Mine Dublin 302 JU Old order mining rights

Tinto 300 JU Old order mining rights

Segalla 306 RU Old order mining rights

Whitewick 301 JU Old order mining rights


Old order prospecting 1,899

Prospecting Bickenhall 346 JU

Dycedale 368 JU

Colombo 365 JU

Wonderscheur 362 JU

Covington 345 JU

Various lots Section A Kaap Block 1,900


MINERAL TITLE (continued)

Mine or Prospect Farm name Type of agreement Hectares

Chibuluma Mines plc

Large-scale mining licence LML23 4 440

Large-scale mining licence LML24 960

Consolidated Murchison Division

Farrell 781LT Old order mining rights 663

Josephine 777LT Old order mining rights 792

Claimland 780LT Old order mining rights 502

Begin 765LT Old order mining rights 840

Prospecting: Old order prospecting permit 12/2004 – applied for new order licence 13,823

Converted prospecting rights 29/06/2007 9,454

O’Okiep Copper Company (Pty) Ltd

Melkboschkuil 132 Old order mining rights

Nigramoep 136 Old order mining rights

Nababeep 134 Old order mining rights

Brakkefontein 133 Old order mining rights

Plaatjiesfontein 135 Old order mining rights

Steinkopf Rural Area Old order mining rights

Vergenoeg Mining Company (Pty) Ltd

Kromdraai 209JR Old order mining rights 393

Sable Zinc Kabwe Ltd

Small-scale mining licence SML1 80

Ruashi Mining sprl

Permits d’exploitation PE No 578 900

SUPPLEMENTARY INFORMATIONcontinued



MINERAL RESERVES AND RESOURCES

The tabulation below presents the Group’s mineral reserves and resources at 30 June 2007. The estimates are based on the SAMREC code.

BARBERTON MINES (PTY) LTD

Mineral reserves Tons g/t Au kg Au

Proved 1 077 282 8,01 8 632

Probable 601 807 9,33 5 613

Total mineral reserves 1 679 089 8,48 14 245

Mineral resources (inclusive of reserves)

Measured 2 793 922 8,44 23 591

Indicated 3 899 489 5,61 21 895

Inferred 2 553 480 5,55 14 165

Total mineral resources 9 246 891 6,45 59 651

PAN AFRICAN RESOURCES

Mineral resources – Manica project Tons g/t Au kg Au

Measured 3 120 000 2,98 9 300

Indicated 4 260 000 2,46 10 400

Inferred 8 900 000 3,20 28 400

Total mineral resources 16 280 000 2,96 48 100

CHIBULUMA MINES PLC

Mineral reserves – Chibuluma South Tons % Cu

Proved 908 831 2,69

Probable 4 781 000 3,43

Total mineral reserves 5 689 831 3,34

Mineral resources (exclusive of reserves)

Inferred Chifupu Prospect 1 936 000 3,05

Total mineral resources 1 936 000 3,05

CONSOLIDATED MURCHISON DIVISION

Mineral reserves Tons % Sb g/t Au

Proved and probable 1 466 000 1,60 2,29

Total reserves 1 466 000 1,60 2,29


Measured 181 566 1,99 0,71

Indicated 2 124 955 1,85 3,41

Inferred 4 760 000 2,44 2,20

Total mineral resources 7 066 521 2,25 2,52



MINERAL RESERVES AND RESOURCES (continued)

RUASHI MINING SPRL

Mineral reserves Tons % Cu % Co

Probable – Ruashi I, II, III 24 120 000 3,78 0,79

Total mineral reserves 24 120 000 3,78 0,79

Mineral resources (inclusive of reserves)

Indicated – Ruashi I, II, III 35 530 000 3,74 0,46

Ruashi/Etoile Stockpiles 2 720 000 1,86 0,35

Total mineral resources 38 250 000 3,61 0,45

The sulphide orebody extension has not yet been quantified.

COPPER RESOURCES CORPORATION ("CRC")#

Miniére de Mushoshi et Kinsenda SARL ("MMK")

Mineral reserves – Kinsenda Tons % Cu

Proved 560 000 5,74

Probable 10 700 000 4,88


Inferred mineral resources

Mushoshi 24 000 000 2,40

Lubembe 47 500 000 2,20

Total inferred mineral resources 71 500 000 2,27#Source: CRC website



MINERAL RESERVES AND RESOURCES (continued)

VERGENOEG MINING COMPANY (PTY) LTD

Mineral reserves Tons % CaF2

Proved 12 800 000 37,9

Probable 6 100 000 41,6



Indicated 138 200 000 27,5

Inferred 69 600 000 12,7

Total mineral resources 207 800 000 22,5

SABLE ZINC KABWE

Mineral resources – Zinc stockpiles Tons %ZN

Washing plant 411 500 9,78

Leach plant residue 4 900 000 4,47

Total mineral resources – Zinc stockpiles 5 311 500 4,88

FACTORS APPLIED TO RESERVE ESTIMATES

Chibuluma Consolidated

Ruashi Vergenoeg Barberton South Murchison

Cut-off grade 1% Cu 20% 4g/t 1% Cu 1% Sb, 1g/t Au

Mining extraction factor (%) 95% 100% — 70% —

Metallurgical recovery factor (%) 82% Cu, 63% Co 75% 92% 90% 87%

Block factor (%) — — 95% — 85%

Mine call factor (%) — — 91% 94% 85%

Notes1. All factors above are based on historical results.2. The competent person designated in terms of the SAMREC Code and taking responsibility for the reporting of the

Group's resources and reserves is the Group-based Mineral Resource Manager and Geologist. Corporate governance on the overall compliance of these statements has been overseen by T Williams – Project Manager – Exploration, Registered Natural Scientist (Registration number 400387/04), 17 years of experience. The named person is a permanent employee of Metorex.


NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the seventy-third annual general meeting of members of Metorex Limited will be held in the Teak Room, 2nd Floor, The Grace Hotel, Bath Avenue, Rosebank, Johannesburg, South Africa on Wednesday, 16 January 2008 at 10:00 for the following purposes:

1. To present the annual financial statements for the year ended 30 June 2007;

2. To elect directors. In terms of the Articles of Association of the Company, Messrs A S Malone, K C Spencer and A J Laughland retire by rotation but, being eligible, offer themselves for re-election. Brief CVs of these directors are set out on pages 6 and 7 of this annual report;

3. To approve the directors’ remuneration;

4. To re-appoint the auditors;

5. To consider and, if deemed fit, to pass, with or without modification, the following ordinary resolutions:

5.1 Ordinary resolution number 1

“Resolved that, subject to the provisions of the Companies Act, 1973 (Act 61 of 1973), as amended, the authority given to the directors to allot and issue, at their discretion, the unissued share capital of the company for such purposes as they may determine, be extended until the company’s next annual general meeting.”

5.2 Ordinary resolution number 2

“Resolved that, subject to the passing of ordinary resolution number 1, in terms of the Listing Requirements of the JSE Limited (“JSE”), the mandate given to the directors of the company in terms of a general authority to issue securities for cash, as and when suitable opportunities arise, be renewed subject to the following conditions:

• That this general authority be valid until the company’s next annual general meeting provided that it shall not extend beyond fifteen months from the date of the passing of this ordinary resolution (whichever period is shorter);

• That the securities be of a class already in issue;

• That securities be issued to public shareholders and not to related parties;

• That a paid press announcement giving full details, including the impact on net asset value and earnings per share, be published at the time of any issue representing, on a cumulative basis within a financial year, 5% or more of the number of securities in issue prior to the issue/s;

• That issues in the aggregate in any one financial year shall not exceed 15% of the company’s issued share capital of that class; and

• That, in determining the price at which an issue of securities will be made in terms of this authority, the maximum discount permitted shall be 10% of the weighted average traded price of those securities over the 30 business days prior to the date that the price of the issue is determined or agreed by the directors.”

NOTE

In terms of the Listing Requirements of the JSE, the approval of a 75% majority of the votes of all shareholders, present or represented by proxy, is required to approve ordinary resolution number 5.2.

6. To consider and, if deemed fit, to pass, with or without modification, the following special resolution:

Special resolution number 1

“Resolved, as a special resolution, that the company (or one of its wholly owned subsidiaries) be given a mandate providing authorisation, by way of a general approval, to acquire the company’s own securities, upon such terms and conditions and in such amounts as the directors may from time-to-time decide, but subject to the provisions of the Companies Act, 1973 (Act 61 of 1973), as amended, (“the Act”), the company’s Articles of Association and the Listings Requirements of the JSE Limited (“JSE”), and subject to the following terms and conditions:

• Any repurchase of securities must be effected through the order book operated by the JSE trading system and done without any prior understanding or arrangement between the company and the counter-party;

• At any point in time, the company may only appoint one agent to effect any repurchase;

• This general authority be valid until the company’s next annual general meeting, provided that it shall not extend beyond fifteen months from date of passing of this special resolution (whichever period is shorter);

• An announcement be published as soon as the company has cumulatively repurchased 3% of the initial number (the number of that class of share in issue at the time that the general authority is granted) of the relevant class of securities and for each 3% in aggregate of the initial number of that class acquired thereafter, containing full details of such repurchases;


NOTICE OF ANNUAL GENERAL MEETING:continued

• Repurchases by the company in aggregate in any one financial year may not exceed 20% of the company’s issued share capital as at the date of passing of this special resolution or 10% of the company’s issued share capital in the case of an acquisition of shares in the company by a subsidiary of the company.

• Repurchases may not be made at a price greater than 10% above the weighted average of the market value of the securities for the five business days immediately preceding the date on which the transaction was effected;

• Repurchases may not be undertaken by the company or one of its wholly owned subsidiaries during a prohibited period and may also not be undertaken if they will impact negatively on shareholder spread as required by the JSE; and

• The company may not enter the market to proceed with the repurchase of its ordinary shares until the company’s sponsor has confirmed the adequacy of the company’s working capital for the purpose of undertaking a repurchase of shares in writing to the JSE.”

The directors are of the opinion that, after considering the effect of the maximum repurchase permitted and for a period of 12 months after the date of this annual general meeting:

• the company and the Group will be able, in the ordinary course of business, to pay their debts;

• the assets of the company and the Group will be in excess of the liabilities of the company and the Group, the assets and liabilities being recognised and measured in accordance with the accounting policies used in the latest audited annual group financial statements;

• the working capital of the company and the Group will be adequate for ordinary business purposes; and

• the share capital and reserves are adequate for the ordinary business purposes of the company and the Group.

The effect of the special resolution and the reason therefor is to extend the general authority given to the directors in

terms of the Act and the Listings Requirements of the JSE for the acquisition by the company of its own securities, which authority shall be used at the directors’ discretion during the course of the period so authorised.

In terms of the Listings Requirements of the JSE, the following disclosures are required with reference to the general authority to repurchase the company’s securities set out in the special resolution above, some of which are set out elsewhere in the Annual Report of which this notice forms part (“this Annual Report”).

Directors – refer pages 6 and 7;

Major shareholders of the company – refer page 57;

Directors’ interests in the company’s securities – refer page 56;

Share capital – refer page 75.

Litigation statement

The directors of the company, whose names are given on pages 6 and 7 of this Annual Report, are not aware of any legal or arbitration proceedings, pending or threatened against the Group, which may have or have had, in the 12 months preceding the date of this notice, a material effect on the Group’s financial position.

Directors’ responsibility statement

The directors, whose names are given on pages 6 and 7 of this Annual Report, 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 Annual Report contains all the information required by law and the JSE Listings Requirements.

Material change

Other than the facts and developments reported on in this Annual Report, there have been no material changes in the affairs, financial or trading position of the Group since the signature date of this Annual Report and the posting date hereof.

7. To conduct such other business as may be conducted at an annual general meeting.


Voting and proxies

On a show of hands every shareholder present in person or by proxy and, if a member is a body corporate, its representative shall have one vote and on a poll every shareholder present in person or by proxy and, if the person is a body corporate, its representative shall have one vote for every share held or represented by him/her.

A form of proxy is attached for completion by registered certificated shareholders and dematerialised shareholders with own name registration who are unable to attend the annual general meeting in person but wish to be represented thereat. Forms of proxy must be completed and received by the transfer secretaries at least 48 hours excluding Saturday, Sunday and Public Holidays, before the time appointed for the meeting. Registered certificated shareholders and dematerialised shareholders with own name registration who complete and lodge forms of proxy will, nevertheless, be entitled to attend and vote in person at the annual general meeting to the exclusion of their appointed proxy/(ies) should such member wish to do so. Dematerialised shareholders, other than with own name registration, must inform their CSDP or broker of their intention to attend the annual general meeting and obtain the necessary authorisation from their CSDP or broker with their voting instructions should they not be able to attend the annual general meeting in person but wish to be represented thereat. This must be done in terms of the agreement entered into between the shareholder and the CSDP or broker concerned by the cut-off time stipulated therein.

Certificated shareholders whose shares are held through a nominee or broker, must inform their nominee or broker of their intention to attend the annual general meeting and obtain the necessary letter of representation from their nominee or broker or provide their nominee or broker with their voting instructions should they not be able to attend the annual general meeting in person.

Each shareholder is entitled to appoint one or more proxies (who need not be a shareholder of the company) to attend, speak and to vote in his/her stead.

By order of the board

MOORE STEPHENS MWM INC.

OA Barbeau

Secretaries

NOTICE OF ANNUAL GENERAL MEETINGcontinued


Metorex Limited(Incorporated in the Republic of South Africa) • (Registration Number 1934/005478/06)

Share code: MTX • ISIN: ZAE000022745 • Issuer code: MEMTX

I/We(full name and surname in block letters)

of(full address)

as a member of

being the registered holder of shares in the Company hereby appoint:

1. or

2. or3. the Chairman of the meeting as my/our proxy to attend and vote on my/our behalf, as indicated below, at the annual general meeting of the shareholders

of the Company, to be held at The Grace Hotel, Teak Room, 2nd Floor, Bath Avenue, Rosebank, Johannesburg, South Africa, at 10:00 on 16 January 2008 and any adjournment thereof.

(Please indicate instructions to proxy in the space provided above by the insertion therein of the relevant number of votes exercisable). Indicate with an X in the appropriate block.

Signed this day of 2007

Signed (normal signature)

Capacity and authorisation (see note 6)

To be completed by certificated shareholders and dematerialised shareholders with own name registration only.

For use in respect of the annual general meeting to be held on 16 January 2008 at The Grace Hotel in the Teak Room, 2nd Floor, Bath Avenue, Rosebank, Johannesburg, South Africa. Shareholders who have dematerialised their shares with a CSDP or broker, other than with own name registrations, must arrange with the CSDP or broker concerned to provide them with the necessary authorisation to attend the annual general meeting or the shareholders concerned must instruct their CSDP or broker as to how they wish to vote in this regard. This must be done in terms of the agreement entered into between the shareholder and the CSDP or broker concerned.

Resolutions For Against Abstain

Ordinary resolution – adoption of annual financial statements

Ordinary resolution – re- election of A S Malone as a director

Ordinary resolution – re-election of K C Spencer as a director

Ordinary resolution – re-election of A J Laughland as a director

Ordinary resolution – to approve the directors’ remuneration

Ordinary resolution – to re-appoint the auditors

Ordinary resolution – to place the unissued shares under the control of the directors

Ordinary resolution – to provide the directors with a general authority to issue shares for cash

Special resolution – to provide the company with a general authority to acquire its own securities

PROXY FORM: for the Annual General Meeting


1. Shareholders who have dematerialised their ordinary shares with a CSDP or broker, other than own name registrations, must arrange with the CSDP or broker concerned to provide them with the necessary authorisation to attend the annual general meeting or the shareholders concerned must instruct them as to how they wish to vote in this regard. This must be done in terms of the agreement entered into between the shareholder and the CSDP or broker concerned.

2. A deletion of any printed matter and the completion of any blank spaces need not be signed or initialled. Any alteration must be signed, not initialled.

3. A shareholder may insert the name of a proxy or the names of two alternate proxies of the shareholder’s choice in the space provided, with or without deleting “the chairman of the annual general meeting”. The person whose name stands first on the form of proxy and who is present at the annual general meeting will be entitled to act as proxy to the exclusion of those whose names follow.

4. A shareholder’s instructions to the proxy must be indicated by the insertion of the relevant number of votes exercisable by that shareholder in the appropriate space provided. Failure to comply with the above will be deemed to authorise the proxy to vote or to abstain from voting at the annual general meeting as he deems fit in respect of all the shareholder’s votes exercisable thereat. A shareholder or his/her proxy is not obliged to use all the votes exercisable by the shareholder or by his/her proxy, but the total of the votes cast and in respect of which abstention is recorded may not exceed the total of the votes exercisable by the shareholder or his/her proxy.

5. Where there are joint holders of ordinary shares and if more than one of such joint holders is present or represented, then the person whose name appears first in the register in respect of such ordinary shares or his/her proxy, as the case may be, shall alone be entitled to vote in respect thereof.

6. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity must be attached to this form, unless previously recorded by the transfer secretaries of the company or waived by the chairman of the general meeting.

7. The completion and lodging of this form of proxy will not preclude the signatory from attending the annual general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof should such signatory wish to do so.

8. The chairman of the annual general meeting may reject or, provided that he/she is satisfied as to the manner in which a member wishes to vote, accept any form of proxy which is completed other than in accordance with these instructions.

9. Proxies will only be valid for the purpose of the annual general meeting if received by the company’s transfer secretaries, Link Market Services South Africa (Proprietary) Limited, 11 Diagonal Street, Johannesburg, 2001 (PO Box 4844, Johannesburg, 2000) at least 48 hours excluding Saturday, Sunday and Public Holidays, before the time appointed for the meeting.

NOTES

Inside front



1: 2007 highlights




6: Directorate




16: Base metals

24: Gold









Insideback


95: Proxy

Contents

Contact details


Telephone (+27 11) 880-3155

Facsimile (+27 11) 880-3322









COMPANY PROFILE

Company profile




BASTION GRAPHICS
















Mission statement



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