ANNUAL REPORT 2007 - ShareData Online

1 AssoreAnnual REPORT 2007 Assore House15 Fricker RoadIllovo BoulevardJohannesburg profile2 Highlights for the year3 Group structure of operating companies4 Group at a glance6 Board of directors10 Chairman s review16 Review of operations20 Mineral resources and reserves32 Corporate governance report36 Black economic empowerment38 Five-year summary40 Corporate information41 Consolidated financial statements contents42 Approval of ANNUAL financial statements andCertificate by company secretary43 Independent auditors REPORT to the members of Assore Limited44 Directors report50 Consolidated balance sheet51 Consolidated income statement52 Consolidated cash flow statement53 Consolidated statement of changes in equity54 Notes to the consolidated financial statements85 Company financial statements contents86 Company balance sheet87 Company income statement and Company cash flow statement88 Company statement of changes in equity89 Notes to the company financial statements94 Notice to membersLooseForm of proxyCONTENTSA ssore| ANNUAL REPORT 20071 GROUP PROFILEA ssore

2 Limited(Assore) is a miningholding companyengaged principallyin ventures involvingbase minerals group s principal investment is a 50% interest inAssmang Limited (Assmang) which it controls jointlywith African Rainbow Minerals Limited (ARM).The group,through its various joint venture entitiesand subsidiary companies,is involved in the mining ofmanganese, iron and chrome ores together with otherindustrial minerals and the production ofmanganeseand chrome group is also responsibleformarketing all products produced,the bulk of whichis exported and the remainder either used in thegroup s beneficiation processes or sold company was incorporated in 1950 and its sharesare listed on the JSE Limited under Assore in thegeneral mining required by the Charter to the Mineral andPetroleum Resources Development Act,15,02%of thecompany s shares are held by black empowermententities.

3 Shanduka Resources (Proprietary) Limited(11,76%) and the BokamosoTrust (3,26%) a broad-based black empowerment community profitR1 118,8mAttributable profitR774,7mHeadline earningsR736,0mTurnoverR4 293,0mAssore| ANNUAL REPORT 2007 North AmericaSouth AmericaEuropeScandinaviaIndiaChinaKoreaJ apanSouth AfricaHigher US dollar prices andincreased sales volumes forproductsHeadline earnings increased by127,2% to R736,0 millionDividends for the year increasedfrom 230 cents to 350 cents pershareCapacity of new khumani IronOre Mine increased during theyear from 8,4 to 10.

4 0 million tonsand construction on scheduleGlobal export destinations of group productsStrong relationships have been established with customers in Europe,North America, South America, India and the Far East and productswith a market value of approximately R6,3 billion (R2006: R4,5 billion)were marketed and distributed in these regions during the FOR THE YEARA ssore| ANNUAL REPORT 2007 GROUP STRUCTURE OF OPERATING LLCM arketing ofminerals andalloys inUSA*RustenburgMineralsDevelopmentCompa ny(Proprietary)LimitedMiningof chromeZeerustChromeMines LimitedMining of chrome Xertech(Proprietary)LimitedManufacture of syntheticdiamondsAfrican Mining& TrustCompanyLimitedExplorationand technicaladvisersWonderstoneLimitedMinin g ofWonderstoneand manufactureofceramicproductsCato RidgeAlloys(Proprietary)

5 LimitedProducerofrefinedferromanganeseCa to RidgeDevelopmentCompany(Proprietary)Limi tedProperty owningOre & MetalCompanyLimitedMarketingand shippingofgroupproducts52,28%11,76%3,26% 32,70%50%50%100%51%56%* Black economic empowered entity On care and maintenance100%Assmang LimitedMining of manganese, iron and chrome oresProducer of manganeseand chrome alloysOresteel Investments(Proprietary) Limited*Shanduka Resources(Proprietary) LimitedBEEpartner*Bokamoso Trust Broad-basedBEE community trustOther shareholdersAssore Limited Mining Holding(Listed on the JSE)

6 3 Assore| ANNUAL REPORT 2007 MaputoMachadodorpDWARSRIVIERO ttosdalRMDCJ ohannesburgRichards BayZeerustRustenburgDurbanCato RidgeBLACK ROCKNCHWANINGGLORIAKHUMANIBEESHOEKP ostmasburgPort ElizabethCape TownSaldanha BayEast LondonFeCrCrFeCrFeCrMnMnW/SFeMnGROUP AT A GLANCEA ssore| ANNUAL REPORT 20074 MineProcessing plantCity/TownCrChrome see page 16 FeIron ore see page 17 MnManganese see page 16 FeCrFerrochrome see page 16 FeMnFerromanganese see page 16W/SWonderstone see page 18 The profit/(loss) contributions for the various classes of businessofthe group were as follows.

7 20072006R 000R 000 Mining and beneficiation655 098310 868 Marketing and shipping120 55392 706 Profit on disposal of available-for-sale investments (net of capital gains tax)36 786129 086 Discount on BEE transaction (35 752)Other operations(9 082)(17 086)Profit per income statement803 355479 822 The activities of the group were conducted through its jointlycontrolled entities and subsidiary companies which are illustratedin the group structure chart set out on page of operations in South Africa5 Assore| ANNUAL REPORT 2007 OPERATINGTYPE OFRESOURCESCOMMODITYOPERATIONOPERATIONDE SCRIPTIONJOINT VENTURE ENTITY (ASSMANG)Manganese DivisionManganese Nchwaning MineMine,washing and Manganese ore is mined in the Black Rock area of the Northern(see page 16)

8 Screening Cape province and manganese alloys are produced at theGloria MineMine,washing and Cato Ridge Works in Ridge Alloys,screeninga joint venture with Japanese partners,produces refinedCato Ridge WorksFerromanganese smelterferromanganese at the Cato Ridge for the Cato Ridge Works is derived from Assmang s manganese minesCato Ridge AlloysRefined ferromanganese and the bulk of both ore and alloy production is DivisionChrome Dwarsrivier MineMine and concentratorChrome ore is mined at Dwarsrivier Mine near Lydenburg (see page 16)

9 Machadodorp WorksSmelter and pelletisingin Mpumalanga province and production is used mainly to plantsupply the group s Machadodorp Ferrochrome Ore DivisionIron ore Beeshoek MineMine and dense mediumIron ore is mined at the Beeshoek open-cast operations (see page 17)jiggingwhich are located outside Postmasburg in the Northern Mine Construction of surface Detrital iron ore from the new khumani iron Ore Mine near (Bruce-King/Mokaning infrastructure in progressKathu is being transported to Beeshoek by road for processingProject)while the khumani plant is under COMPANIESR ustenburg Minerals Chrome Rustenburg MineMine and concentratorThe group also mines chrome ore near Rustenburg Development Company(see page 16)(Rustenburg Minerals Development Company (Proprietary)Limited) (RMDC) in open-cast operations and production is supplied mainly to the local Wonderstone Wonderstone MineMining ofWonderstoneThe group mines a type of pyrophyllite,which,for trade purposes,(see page 18)

10 And manufacture ofis referred to as deposit is located outside ceramic productsOttosdal,approximately 300 kilometres west of bulk of the material mined is exported to the United Statesof America,the United Kingdom and the Far East,and thebalance beneficiated to produce high precision componentsmanufactured to customers Chrome mines Chrome Zeerust ChromeMining of chromeOn care and diamondsXertechManufacture of syntheticThe group s synthetic diamond production facility operates(see page 18)diamondsfrom premises in Linbro Park on the outskirts of Johannesburgunder the name of are concluded both locallyand for & Metal CompanyMarketing and Ore and metalN/AOre and Metal Company Limited is responsible for the shipping of productsmarketing and shipping of all the group s products,including(see page 19)