On 15 March 2024, the Board approved the audited consolidated annual financial statements of the Group and the Company for the year ended 31 December 2023.

These summarised consolidated financial statements have been prepared under the supervision of Ditabe Chocho CA(SA) (Financial Director), in accordance with the framework concepts and the measurement and recognition requirements of the International Financial Reporting Standards ("IFRS"), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and the Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, and containing the information required by IAS 34: Interim Financial Reporting, the JSE Limited Listings Requirements and the Companies Act of South Africa, No. 71 of 2008.

The summarised consolidated financial statements are extracted from audited information but is not itself audited and the board is responsible for the accuracy of the extraction.

The audited consolidated annual financial statements from which the summarised consolidated financial statements were derived have been audited by the Group's auditors, Deloitte & Touche. Their unmodified audit report along with the audited consolidated annual financial statements can be obtained from the Company on written request from Merafe's company secretary, CorpStat Governance Services Proprietary Limited (w.somerville@mweb.co.za), or are available on the Company's website at https://www.meraferesources.co.za/results/annuals-2023/index.php.

Any reference to future financial performance included in these summarised consolidated financial statements has not been audited or reported on by the Company's auditors.

Several of the accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities.

Fair values have been determined for measurement and/or disclosure purposes based on the methods as indicated below.

Through its wholly-owned subsidiary, Merafe Ferrochrome, the Group agreed with GOSA to acquire a participation interest in the Eastern PGMs Plant located at Thorncliffe Mine. The new joint operation relates to all associated minerals produced pursuant to the Eastern Mining Right and is incorporated into the Venture in terms of the Venture agreement. The acquisition of the Eastern PGMs operation was part of the Group's growth strategy. Joint control was obtained in accordance with the Venture agreement.

Effective 6 September 2023, the new joint operation consists of an Eastern PGMs Plant and a second plant (PGM X) that will treat PGM-bearing materials to extract and produce PGMs concentrate. The PGMs East plant is classified as a business combination as defined by IFRS 3, and the values for the assets acquired and liabilities assumed approximate fair value at the acquisition date. The Group acquired the assets and liabilities of PGM X, which is under construction at book value. The participation interest was acquired for no consideration.

Merafe Ferrochrome incurred acquisition-related costs of R0.8 million, comprising of advisory and legal expenses. These costs are included in other expenses.

The table below summarises the net asset value at the date of acquisition:

From the date of acquisition, the Eastern PGMs plant contributed R60 million of revenue and R37 million of EBITDA of the Group. If the combination had taken place at the beginning of 2023, the revenue would have been R194 million and EBITDA of R140 million.

Related party transactions and balances

During the current financial year, management performed a re-assessment of its related party relationships in accordance with IAS 24, Related Party Disclosures. The Glencore plc Group is a related party taking into consideration the shareholding and related significant influence coupled with the substance of the relationship. Significant transactions and balances with all entities within the Glencore plc Group are therefore disclosed together with the comparative figures.

All related party transactions relate to Merafe's attributable 20.5% interest in the Venture. There are no outstanding commitments at year end.

The Group's effective tax rate is 25.50% (2022: 27.67%) for the year ended 31 December 2023.

There was no impairment raised against assets in the current year (2022: R0.2 million).

During the reporting period, inventory was written down to its net realisable value due to low commodity prices at the reporting date. This resulted in a loss of R2 million (2022: R1 million).

On 16 August 2022, the Group decided to dispose of the mineral rights and land that form part of Boshoek Mine. The environmental rehabilitation obligation is the liability directly associated with the asset held for sale. The Group considered that the sale of Boshoek Mine meets the criteria for it to be classified as held for sale.

The Department of Mineral Resources and Energy approved Section 11 of the Mineral and Petroleum Resources Development Act, No. 28 of 2002 on 7 December 2023. Further regulatory approvals to finalise the sale are expected in 2024. As the transaction is expected to be effective within the next 12 months, Boshoek Mine continues to be classified as held for sale.

No impairment loss has been recognised as the mineral right and land have been measured at their carrying amount.

During the current period, the discount rate applied in calculating the environmental rehabilitation provision was increased from 3.8% to 7.3%. This resulted in a change in estimate of R114 million (2022: R92 million credit). The decrease in the environmental rehabilitation provision was applied to property, plant and equipment and the remainder to the statement of financial performance.

There were no changes to share capital during the reporting period.

The Group is subject to direct and indirect tax in the South African jurisdiction. As a result, significant judgment is required to determine the Group's income tax provision. The Group's subsidiary undertakes various cross-border transactions within the Venture, subject to the Group's transfer pricing policies.

On 31 December 2023, the previously reported transfer pricing matter with SARS was ongoing. The Group has a deadline of 30 April 2024 to respond to SARS letter of audit findings for the 2016 and 2017 years of assessment, which the Group is contesting with SARS. Management still relies on opinions obtained from external legal and tax advisers to inform and support the significant judgement required in interpreting relevant tax legislation. The matter has been disclosed as a contingent liability as its outcome remains uncertain and any potential tax exposure cannot be reliably estimated. Accordingly, no adjustment for any effects on the Group has been made in the consolidated financial statements.

As reported above, on 15 March 2024, the Board resolved to declare a final cash dividend of 22 cents (2022: 13 cents) per share for the 2023 financial year. The total gross cash dividend for the year amounted to 42 cents (2022: 25 cents) per share.

On 18 January 2024, the Group appointed Mr Ditshebo Stephen Phiri as an independent non-executive director of the Board, effective 1 February 2024.

The directors of Merafe are unaware of any material events that occurred after the reporting period and up to the date of authorisation of this report that may require adjustment or disclosure in these annual financial statements.

Notice is hereby given that a gross final cash dividend of 22 cents per share (December 2022: 13 cents per share) has been declared by the Board on Friday, 15 March 2024, payable to holders of ordinary shares.

The dividend will be paid out of income reserves.

The ordinary dividend will be subject to a local dividend tax rate of 20%. The net local ordinary dividend to those shareholders who are not exempt from paying dividend tax is therefore 17.6 cents per share. Merafe's income tax number is 9 550 008 602. The number of ordinary shares issued at the date of the declaration is 2 499 126 870.

The important dates pertaining to the dividend are as follows:

Shareholders will not be permitted to dematerialise or rematerialise their ordinary shares between Wednesday, 10 April 2024 and Friday, 12 April 2024, both days inclusive.