To the Shareholders of Merafe Resources Limited

Report on the Audit of the Consolidated and Separate Financial Statements Opinion

We have audited the consolidated and separate financial statements of Merafe Resources Limited and its subsidiaries (the Group and Company) set out, which comprise the consolidated and separate statement of financial position as at 31 December 2024; and the consolidated and separate statement of profit or loss and other comprehensive income; the consolidated and separate statement of changes in equity; the consolidated and separate statement of cash flows for the year then ended; and notes to the consolidated and separate financial statements, including material accounting policy information.

In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of Merafe Limited and its subsidiaries as at 31 December 2024, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended, in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board and the requirements of the Companies Act of South Africa.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated and Separate Financial Statements section of our report. We are independent of the Group and Company in accordance with the Independent Regulatory Board for Auditors' Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performing audits of financial statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent with the corresponding sections of the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (including International Independence Standards). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

In terms of the IRBA Rule on Enhanced Auditor Reporting for the Audit of Financial Statements of Public Interest Entities, published in Government Gazette No. 49309 dated 15 September 2023 (EAR Rule), we report:

Final Materiality

We define materiality as the magnitude of misstatement in the consolidated and separate financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the nature and extent of our audit work and in evaluating the results of our work.

Based on our professional judgement, we determined materiality for the consolidated and separate financial statements as a whole as follows:

	Financial statements – group	Financial statements – company
Overall materiality	R90 million (2023: R100 million).	R9 million (2023: R9.3 million).
How we determined it	It represents 6.16% of normalised profit before tax.	It represents 1% of net assets.
Rationale for benchmark applied	A key judgement in determining materiality is the appropriate benchmark to select, based on our perception of the needs of shareholders. We considered which benchmarks and key performance indicators have the greatest bearing on shareholder decisions. We determined that profit before tax remained the key benchmark and is generally accepted for listed entities. In the current year, profit before tax was normalised for unusual impairment charges.	A key judgement in determining materiality is the appropriate benchmark to select, based on our perception of the needs of shareholders. We considered which benchmarks and key performance indicators have the greatest bearing on shareholder decisions. We determined that net assets remained the key benchmark as it is of particular interest to users as it depicts the value available to shareholders after the liabilities have been settled.

Scope of our Audit

Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the structure and organisation of the Group, and assessing the risks of material misstatement at the Group level.

We selected components at which audit work in support of the group audit opinion needed to be performed in order to provide an appropriate basis for undertaking audit work to address the risks of material misstatement. Our selection was informed by taking into account the component's contribution to relevant classes of transactions, account balances or disclosures.

Based on our assessment, we performed work at 3 components (2023: 3 components). The following audit scoping was applied:

• 3 components (2023: 3 components) were subject to an audit of components financial information.

Residual values were addressed by risk assessment and analytical procedures performed at a group level.

These 3 components account for 99% of the Group's revenue (2023: 99%), and 99% of the Group's total assets (2023: 99%).

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated and separate financial statements of the current period.

These matters were addressed in the context of our audit of the consolidated and separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined that there are no key audit matters to communicate in respect of the separate financial statements.

In terms of the EAR Rule, we are required to report the outcome of audit procedures or key observations with respect to the key audit matters and these are included below:

Key Audit Matter – Group			How the matter was addressed in the audit?
Impairment assessment of the Merafe Resources Limited (Group)
As disclosed in note 37 of the consolidated financial statements, the Merafe Resources Limited market capitalisation value at 31 December 2024 was R3.5 billion in comparison to a net asset value of R5.3 billion. Based on this share price, the market capitalisation was R3.5 billion, which was R1.8 billion lower than the net asset value (NAV) of R5.3 billion. In addition, there was a significant decrease in the ferrochrome price, which when combined with the level of operating costs has put strain on the profitability of certain assets. These were indicators that the Group net asset value may be impaired in accordance with the requirements of IAS 36: Impairments of Assets. The Glencore Merafe Chrome Venture (Venture) is the only cash-generating unit of the Group. The directors performed an impairment assessment using value in use where the Groups net asset carrying value was compared to the recoverable amount. The recoverable amount is based on the cash flow forecasts of the Venture and the weighted average cost of capital of Merafe Resources Limited and the assessment is dependent on macro-economic factors, which include foreign currency exchange rates, commodity price forecasts as well as internal assumptions and estimates related to production levels, operating costs and customer demand. The assumptions with the most significant impact on the cash flow forecast were: Forecasted ferrochrome production levels and customer demand for both ferrochrome and chrome ore; Forecasted foreign currency exchange rates; Forecasted ferrochrome commodity prices; Forecasted Earnings before Interest, Tax and Depreciation ("EBITDA") of the Venture; and Real weighted average cost of capital to discount the future cash flows. Critical judgement is required by the directors in determining the forecasted South African Rand/US Dollar exchange rates and forecasted ferrochrome commodity prices. The impairment assessment and resulting impairment of R574 million recognised by the Group was identified as a key audit matter due to the significance of the directors' judgement involved in determining the value in use of the Venture, together with the sensitivity of the forecasted South African Rand/US Dollar exchange rate, forecasted commodity prices and other operational and economic assumptions applied in the value in use.			In evaluating the impairment assessment of the Group's net asset value, we tested the value in use calculations prepared by directors, with a particular focus on the cash flow forecast (including the production input factors, forecasted South Africa/US Dollar exchange rates), commodity prices and the discount rate applied. Our procedures included the following: Assessed the design and implementation of the Group's controls relating to the determination of the assumptions used in the determination of the cash flow forecasts; Engaged our internal specialists in evaluating the reasonableness of forecasted sales volume estimates and forecasted production levels against strategies and the Life of Mine ("LOM") derived from the Reserve and Resources Statement; Engaged our internal specialists to assist with assessing the reasonability of the following key assumptions: Forecasted production levels; Real average weighted cost of capital used to discount the cash flows; South African Rand/US Dollar exchange rate used as the forecasted exchange rate; Forecasted ferrochrome, chrome ore and related commodity prices; and Specific operating costs and impact of other economic factors. Re-computed the recoverable amount based on inputs and assumptions adopted by the directors; Performed and re-computed the director' sensitivity analyses on the forecasted ferrochrome and chrome ore commodity prices including challenging management on the ferrochrome prices; Evaluated the judgement applied by the directors in evaluating qualitative factors and judgement applied in the impairment assessment; Assessed management's view on the qualitative factors provided; and Assessed the EBITDA and budget processes to determine if budgets can be relied on. At year end, there were grounds pointing to the likely impairment of some of the smelting operations. After considering several critical factors which included the state of the ferrochrome market and the level of the operating costs, management concluded that the Boshoek smelter should be fully impaired resulting in an impairment write off of R574 million relating thereto at year end. Based on the audit procedures performed, we found the impairment of R574 million, as disclosed in note 37, to be reasonable. We considered the disclosures relating to impairment assessment to be appropriate.

Other Information

The directors are responsible for the other information. The other information comprises the information included in the document titled "Merafe Resources Limited Audited Consolidated and Separate Annual Financial Statements for the year ended 31 December 2024", which includes the Directors' Report, the Audit Committee's Report, and Certificate by the Company Secretary, as required by the Companies Act of South Africa. The other information does not include the consolidated or the separate financial statements and our auditor's reports thereon.

Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon.

In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements, or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Consolidated and Separate Financial Statements

The directors are responsible for the preparation and fair presentation of the consolidated and separate financial statements, in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated and separate financial statements, the directors are responsible for assessing the Group and Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group and/or Company or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Consolidated and Separate Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit 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 Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors' use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group and/Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated and separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group and/or Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether the consolidated and separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the consolidated financial statements. We are responsible for the direction, supervision and review of the audit work performed for the purposes of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the consolidated and separate financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report, unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

Audit Tenure

In terms of the IRBA Rule published in Government Gazette No. 39475 dated 4 December 2015, we report that Deloitte & Touche has been the auditor of Merafe Resources Limited for eight years.

Deloitte & Touche