🕐25.05.10 - 10:12 Uhr

Chromex Mining plc - Company Update: US$5m funding secured for growth; DMS to do
uble chrome production in Q410



News Chromex Mining plc ("Chromex") has secured US$5 million funding, on a pre-payment for product basis (based on market prices), for a Dense Media Separation ("DMS") circuit and ancillary plant improvements at the Stellite opencast chrome mine ("Stellite"), located on the western limb of the Bushveld Complex in South Africa. The US$5m funding has been secured in the form of a pre-payment from Suzhou Kaiyuan Chemical Co.

Ltd ("Suzhou"), a Chinese steel manufacturing company.

After the initial six month construction period, all lumpy chrome product will be sold to Suzhou for a period of two years.

During this period a percentage of each lumpy chrome consignment will be used to offset the pre-payment.

Pricing will be market driven and negotiated on a monthly basis. Implications Production growth... The DMS circuit which is expected to be completed in Q410, will double chrome production capacity to 40,000 run-of-mine ("ROM") tonnes per month ("tpm") as well as improve recovery margins and economic efficiencies at the plant. The construction of the DMS has already commenced with cold commissioning planned for Oct10.

Other capital projects, which include the construction of a tailings thickener and spirals upgrade, are expected to be commissioned during the early part of Jun10.

The thickener will significantly reduce the Stellite processing plants make-up water requirements, and the spirals upgrade, which includes two additional scavenger spiral banks, are also being installed to optimise chrome recoveries. With the US$5m now secure, Chromex is now positioned without funding risk to significantly increase both its production profile and its profit per tonne of production which will result in a step change in cash flows in the next six months.

In addition, this provides a guaranteed off-take to China and is not dilutive to existing shareholders.

Chromex will shortly be in a position to market a sized lumpy chrome product in addition to the chemical and metallurgical grade concentrates that it currently produces and take advantage of the increasing demand for chrome. ...and a new business model Last week (May 17th) Chromex announced the shift from a contractor based model to an in-house business model and the recruitment of two new operations personnel, Jean du Plessis and Anson Gilbert, as the Company looks to expand its operations at Stellite and is building/assembling its portfolio of chrome production assets across southern Africa following the recent acquisition of Waylox Mining Limited (Waylox) and the agreement late last year to acquire 49% of Falvect Mining Ltd ("Falvect"). To this end we are also encouraged by the calibre of recent recruits to Chromex as announced last week and believe they will be a key component of Chromexs aim to grow and convert existing projects into profits in the next 12 months. Key Events / Newsflow 2009 was a difficult period for Chromex as the operation largely just washed its face.

We expect news flow in the next six months to be extremely positive for Chromex, as the Company begins to capitalise on the improving Chrome price, expand operations, promote the Company once again and we expect to shortly provide a more detailed company update research report ahead of a European and Asian road show. In Zimbabwe, Chromex has initiated a feasibility study on Wayloxs Trixie claims which is expected to be completed in 3Q10 and work to increase the resource is ongoing.

The Company remains comfortably funded for its ongoing activities in both South Africa and Zimbabwe. Key catalysts for Chromex: South Africa * The Stellite DMS plant is expected to be commissioned in 3Q10; doubling of production to 40,000tpm in 4Q10; * Test work results from the Stellite chrome tailings for PGEs and scoping study results; and * Increased value-add from beneficiation of internal and 3rd party ore at Stellite. Zimbabwe * Revised Resource Statement and initial test work results at the Trixie claims; * Results from the Feasibility Study on the Trixie claims in 3Q10; and * Results from the technical review of the combined mineralisation at Shurugwi and Ngezi.
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