Interim Results

Chromex Mining plc / Epic: CHX / Market: AIM / Sector: Mining & Exploration 3 June 2009 Chromex Mining plc ("Chromex" or "the Company") Interim Results Chromex Mining plc, the AIM listed chrome mining company focused in Southern Africa, is pleased to announce its results for the six months ended 31 March 2009. OVERVIEW * Inaugural profit achieved despite difficult trading conditions * Strong cash position of approximately GBP 2.3 million * Processing plant at Stellite constructed on time and within budget, with offtake agreement in place * Granted a Mining Right to extract Platinum Group Metals and gold at Stellite CHAIRMAN'S STATEMENT I am delighted to announce that Chromex has achieved a first profit in the six months to 31 March 2009, a time which has been an especially difficult one for the mining sector, combining general economic uncertainty with unprecedented turbulence in demand and price. As far as Chromex is concerned it was also a period where sales have been restricted to semi beneficiated product pending completion of the Stellite processing facility. I believe that this initial profit indicates the potential of the Company when fully beneficiated product is available and the predicted improvement in the chrome market takes place. Stellite The construction of the processing plant at Stellite is complete, on time and within budget. It is currently in the commissioning phase and first sales of beneficiated product are expected at the end of June 2009. The primary product will be a 44% Cr2O3 concentrate, which is expected to command a premium price in the market. Mining has been put on hold to allow existing stockpiles to be used up during plant commissioning. Both the operation of the plant and the mining itself are being undertaken by contractors rather than by owner operated labour. This has already proved invaluable in enabling Chromex to react quickly to market changes in a way which would not be possible if we had a substantial labour force. It remains our strategy to retain ore in the ground when prices are low rather than depleting our resource. We remain confident that we can be cash flow positive on low volumes, thus preserving our ore resource for sale at a more appropriate point in the price cycle. Importantly, we secured a positive amendment to our Mining Right over Stellite to include the extraction of Platinum Group Metals and gold from the Stellite plant tailings stream. Test work to confirm the economics of extraction and treatment will commence as soon as plant commissioning has been completed. Mecklenburg We remain confident that the challenge by Samancor Chrome Ltd against our Mining Right at Mecklenburg will be unsuccessful. The process requires the Department of Minerals and Energy in South Africa, Samancor and Chromex to submit affidavits to the High Court, which has proved to be a lengthy and drawn out process. For this reason, no date for the Court hearing has been set and our best estimate is that the case may not be settled before early 2010. Following this, a decision will be made as to the timing of development of the Mecklenburg mine. It is notable that independent analysts value Stellite alone at more than the Company's market capitalisation, so that Mecklenburg is wholly discounted in the current share price. Finance Chromex is pleased to announce a profit before tax for the six months ended 31 March 2009 of GBP 81,000 (2008 - loss GBP 282,000) on a turnover of GBP 1,613,000 (2008 - nil). No tax is payable on this profit, but there is a charge of GBP 34,000 relating to an adjustment of deferred tax. For the year ended 30 September 2008 the loss was stated at GBP 1,406,000, but this was after a charge of GBP 790,000 relating to share options, so that the loss on a comparable basis was GBP 616,000. The plant construction has been financed in part by a convertible loan facility of ZAR 30 million (GBP 2,199,000), which has not been fully drawn down. Directors Phoevos Pouroulis and Guy Gibbons have stepped down from the Board with immediate effect. Phoevos, who was responsible for marketing and sales, is establishing a new multi commodity trading company, which will include chrome. He will remain responsible for Chromex's sales through his new company and his resignation is solely to avoid any potential conflicts of interest. Finance Director Guy Gibbons, who was employed by Chromex for one third of his time, has decided to seek a full time position, which Chromex was unable to offer. To compensate for Guy's resignation, Chromex has strengthened the accounting function in South Africa, where all operations take place. I will assume overall responsibility for finance. The position will be reviewed when mine construction begins at Mecklenburg, but, should we decide to recruit a dedicated finance director at that time, he is likely to be based in Johannesburg rather than London. I would like to thank both Phoevos and Guy for their contributions to the successful development of Chromex. Russell Lamming, Nigel Wyatt and I remain as executive Directors of the Company, while James Burgess, Vusi Nkosi and Robert Sinclair are Non-executive Directors. Future prospects The Stellite plant is now in its commissioning stage. It is expected that 44% concentrate, which commands a premium price, will be available for commercial sales at the end of June 2009. Chromex is receiving a number of enquiries for supply of product in addition to the Metalmin offtake agreement previously announced. Despite the delays caused by legal disputes we expect to be in a position to progress the development of the Mecklenburg mine by mid 2010, subject to market conditions. We believe that the turbulence in the market for chrome will result in further resources becoming available for acquisition, and we are actively pursuing opportunities to increase the 41 million tonnes of chrome resource presently under our control. Within the junior mining sector Chromex stands out as having positive cash flow as well as healthy cash resources. All these factors enable the Directors to look forward to the future with confidence Brian Moritz Chairman 3 June 2009 Unaudited consolidated income statement For the six months ended 31 March 2009 6 Months ended 6 Months ended Year ended 30 31 March 2009 31 March 2008 September 2008 £'000 £'000 £'000 Revenue 1,613 - 440 Cost of sales (1,068) - (204) Gross profit 545 - 236 Administrative expenses (500) (331) (956) Cost of bankable (27) (8) (46) feasibility study Fair value of share - - (790) options issued Profit / (loss) from 18 (339) (1,556) operations Finance income 63 57 151 Finance expense - - (1) Profit / (loss) before 81 (282) (1,406) tax Taxation (34) - - Profit / (loss) for the 47 (282) (1,406) period Profit / (loss) per share: 0.06p (0.44)p (1.94)p Basic Diluted 0.05p (0.44)p (1.94)p The operating profit for the period arises from the Group's continuing operations Unaudited consolidated balance sheet As at 31 March 2009 31 March 31 March 30 September 2008 2009 2008 £'000 £'000 £'000 Assets Non-current assets Property, plant and equipment 6,824 2 5,480 Deferred tax 79 - 106 Intangible assets 886 400 886 7,789 402 6,472 Current assets Inventories 134 - 123 Trade and other receivables 407 9 590 Cash and cash equivalents 2,270 2,009 2,566 2,811 2,018 3,279 Total assets 10,600 2,420 9,751 Equity and liabilities Equity attributable to equity holders of the company Share capital 850 636 847 Share premium 9,120 2,440 9,071 Accumulated losses (1,118) (867) (1,165) Exchange reserve 423 81 29 Total equity 9,275 2,290 8,782 Non-current liabilities Provisions 399 - 286 Loans and borrowings 734 - 1 1,133 - 287 Current liabilities Trade and other payables 192 130 682 192 130 682 Total equity and liabilities 10,600 2,420 9,751 Unaudited consolidated cash flow statement For the six months ended 31 March 2009 6 Months ended 6 Months Year ended 30 31 March 2009 ended 31 September 2008 £'000 March 2008 £'000 £'000 Net cash generated from / 263 (234) (806) (used in) operating activities Cash flows from investing activities Purchase of property, plant (1,407) (2) (25) and equipment Acquisition of subsidiaries - - (3,977) Financing income 63 57 151 Financing costs - - (1) Net cash (used in) / from (1,344) 55 (3,852) investing activities Cash flows from financing activities Proceeds of issues of share 52 - 4,817 capital Net cash acquired with - - 219 subsidiary Proceeds from borrowings 733 - - Net cash from financing 785 - 5,036 activities Net (decrease)/ increase in cash and cash equivalents (296) (179) 378 Cash and cash equivalents at the beginning of the period 2,566 2,188 2,188 Cash and cash equivalents at the end of the period 2,270 2,009 2,566 Notes: 1. The financial information set out above does not comprise full accounts as defined in the Companies Act 1985. 2. The Company has applied same accounting policies in preparation of this financial information as were applied in its annual financial statements at 30 September 2008. 3. Profit per share is calculated on the basis of profits of £47,000 (2008 - loss of £282,000) and a weighted average of 84,960,000 ordinary shares in issue (2008 - 63,580,000 shares). Warrants and share options outstanding were not included in the calculation of prior period diluted losses per share, as in the opinion of the directors, they were anti-dilutive. 4. No dividend is proposed in respect of the period. **ENDS** For further information please visit or contact: Russell Lamming Chromex Mining plc Tel: +44 (0) 7810 870 587 Brian Moritz Chromex Mining plc Tel: +44 (0) 7976 994300 William Vandyk Blue Oar Securities plc Tel: +44 (0) 20 7448 4400 Guy Wilkes Ocean Equities Limited Tel: +44 (0) 20 7786 4370 St Brides Media & Finance Ltd Tel: +44 (0) 20 7236 Hugo de Salis 1177 Felicity Edwards St Brides Media & Finance Ltd Tel: +44 (0) 20 7236 1177 ---END OF MESSAGE--- This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.