Keeping people safe is of paramount importance to Tharisa. Mining and processing safely is a key performance indicator for all executives and managers at Tharisa.

• Disruptions to operations pending root cause investigations
• Potential section 54 and section 55 instructions from the DMR in terms of the South African Mine Health Safety Act

• Strive for zero harm working environment
• Comprehensive training on standard operating procedures
• Implement culture of safety risk intolerance
• Transparent and open relationships with DMR inspectorate
• Key performance indicator in Group cash bonus scheme to incentivise safe behaviour

South Africa - the recent proposals concerning land expropriation without compensation coupled with burgeoning unemployment, increasing government debt and negligible GDP growth have led to a negative response to political certainty.

Negative business confidence.

Zimbabwe - international sanctions still exist and may affect the stability of the economy.

Negative business confidence.

Lack of currency liquidity.

• Unattractive investment destination for international investors
• Potential for sovereign credit rating downgrade
• Political civil unrest adversely impacting on mine production

• The political uncertainty has stabilised with the inauguration of Cyril Ramaphosa as president and the replacement of the boards of state-owned enterprises
• Pledges by global concerns to invest in the country; which will serve to improve business confidence, unlock investment by local concerns and build GDP growth
• National elections in 2019 which will instil fiscal discipline once there is election certainty
• The political uncertainty and volatility in Zimbabwe has stabilised with the inauguration of President Mnangagwa
• Lifting of certain indigenisation restrictions
• The President's willingness to attract international investment by his declaration that "Zimbabwe is open for business"
• Investor friendly laws and dispensations

Tharisa Minerals' right to mine is dependent on strict adherence to various legal and legislative requirements.

Non-compliance with the MPRDA and/or Mining Charter and/or the Group's Social and Labour Plan. Routine audits are carried out by the DMR to ensure compliance.

The Group is required to comply with a range of health and safety laws and regulations in connection with its mining, processing and on mine logistics activities. Regular inspections are conducted by the DMR to ensure compliance. Any perceived violation of the regulations could lead to a temporary shutdown of all or a portion of the Group's mining activities.

• Cost of compliance to changes in the Mining Charter
• Non-compliance resulting in potential legal sanction and risks to the right to mine
• Capital raising hindered

• Ensure compliance with current MPRDA and applicable legislation
• Proposed amendment to the MPRDA has been abolished
• Mining Charter has been published and is certain
• Ensure compliance with the terms of the Mining Charter while making use of the phasing in period
• Ensure compliance with the Group's Social and Labour Plan
• Engagement with regulatory authorities and industry organisations
• Ongoing communication and awareness with investors

Tharisa currently owns and operates a single asset in a single jurisdiction.

The Group has made early entry investments into Zimbabwean exploration projects, however the Group is still exposed to the potential of political risk and instability within the country of its operation.

• Exposure to potential macroeconomic, social and sociopolitical risks and instability
• Sovereign ratings downgrades of the country of operation can limit the Group's ability to raise financing and increase the cost thereof
• Exposure to only two commodities

• Third-party operations such as the operations of Lonmin's K3 UG2 chrome plant, provides additional revenue from an alternate operation
• Exploration projects in Zimbabwe provide geographic diversification as well as higher grade chrome products
• Considering opportunities to diversify commodities as they arise

The Group's revenues, profitability and future rate of growth depend on the prices of PGMs and chrome.

The state of the world's economies impact on demand and market prices for PGMs and chrome.

Volatility in the ZAR:US$ exchange rate affects the Group's profitability of which South Africa's technical recession, land reform uncertainty and effects of other emerging markets are contributing factors.

• A downward pressure on the prices of PGMs and/or chrome may negatively affect the Group's profitability and cash flows
• The Group's reporting currency is US dollar. The Group's current operations are predominately based in South Africa, with a ZAR cost base while the majority of the revenue stream is in US dollar, exposing the Group to the volatility and movement in the currencies
• Risk of competitor product dumping and undercutting market prices

• Monitor costs closely to ensure that the Group remains in the lowest cost quartile
• Stringent cost control
• Improved operating efficiencies and production driving down unit costs
• Service providers appointed to manage the Group foreign exchange and PGM hedging policy
• Production of higher value-add specialty grade chrome concentrates comprising 25% of Group chrome concentrate production

The activities of the Group expose it to a variety of financial risks including market, commodity prices, credit, foreign exchange and interest rate risks.

Static share price trading.

• Significant changes in the financial assumptions made by the Group could impact on its ability to continue operating and jeopardise its ability to raise financing in the future
• Adverse impact on the ability to raise capital for growth and acquisitions

• Position as a low-cost producer of both PGM and chrome concentrates
• Production of higher value-add specialty grade chrome concentrates
• Leveraging third-party operations
• Diversified customers and markets
• Stable Group performance assisted by free cash flows generated from operating activities
• Undrawn banking facilities
• Trade finance facilities assist with working capital requirements
• Secondary listing on the LSE provides an additional trading platform and increased liquidity
• Marketing and roadshow efforts have enhanced the Group's profile and investor awareness

The bulk of Tharisa's chrome production is exported to China. This gives the Group a significant exposure to a single market.

• Customer base largely located in China with accompanying exposure to Chinese markets

• No reliance on a dominant customer within that market
• Tharisa has strategically diversified its production through the increase of specialty grade chrome concentrates, which make up approximately 25% of Tharisa's total chrome production
• Chemical and foundry grade chrome concentrates sold into diversified global markets
• Exploration project in Zimbabwe is focusing on higher grade chrome products
• PGM concentrate sold to leading precious metal refiners on a long-term offtake basis

Tharisa is obliged in terms of its undertaking to stakeholders, including government, providers of capital and the community, to monitor, minimise and mitigate our impact on the physical environment and not to infringe on the rights to a safe and healthy environment. Non-compliance with this undertaking may infringe on the terms of the mining licence and the ability to continue mining.

• Harm to the environment
• Increased costs of remediation and rehabilitation due to legislative changes
• Potential legal sanction and class action suits
• Poor image of mining companies

• Conduct all mining and processing operations in an environmentally responsible manner
• Compliance with applicable national and local laws and regulations
• Monitor compliance against Equator Principles
• Financial provision for rehabilitation and mine closure
• Ongoing environmental impact monitoring

Tharisa Minerals' neighbours are impacted by its operations in terms of dust, noise, water and security.

The perceptions of stakeholders, including different sections of the community and various levels of government, are varied and multi-layered.

• Local stakeholder discontent has the potential to disrupt operations
• Safety and health of community
• Complaints to regulatory authorities and risk of intervention
• Potential for adverse litigation
• Poor image of mining companies

• Ongoing environmental impact monitoring
• Agreements concluded with local landowners
• Partner with government and local municipality to develop identified land within the municipal spatial development area to which the community may be relocated
• Ongoing discussions with the DMR
• Positive engagements with the local community with focus on sustainable community projects

Tharisa's mining, processing and marketing operations rely on sustainable access to water, electricity and road and rail infrastructure.

• Production interruptions
• Failure to meet delivery commitments

• Two independent processing plants provide flexibility in times of electricity and water curtailments
• Multi-modal transport optionality via bulk or containers, road and/or rail
• Integrated agreement for rail transportation and port facilities concluded with Transnet
• Improved water supply through application for a permanent conversion of temporary rights and transfer of water rights from Buffelspoort Dam
• Open pit diesel powered mining fleet reduces reliance on electricity

The consistent, assured availability of appropriately skilled human resources at economical rates is essential to the sustainability of Tharisa's operations. Similarly important is the efficiency and discipline of the Group's workforce.

• Labour disruptions remain a risk, particularly with the current political climate which may contribute to heightened labour and community unrest
• Potential damage to property
• Loss of production exacerbated by low ROM stockpiles ahead of the plants

• Recognition agreement with the relevant trade union
• Newly concluded two-year wage agreement with majority union provides certainty and stability
• Monthly liaison with shop stewards and regular contact with regional leadership
• Ongoing training programmes
• Adequate insurance cover in the event of damage to property arising from unrest
• All levels of employees incentivised through bonus and incentive schemes leading to improved productivity and employee retention

Management and planning of the extraction of the multiple MG layers of reef is critical to its business model.

Tharisa's success depends on it extracting the maximum value per tonne of reef while avoiding in pit dilution and undue sterilisation of the resource.

• Sub-optimal quantity and quality of reef results in poor processing plant recoveries, which impacts on production and financial performance
• Sterilisation of resources reduces life of mine and inhibits mining flexibility
• Loss of production as a result of low ROM stockpiles ahead of the plants

• Owner mining model enables in-house management and control of all mining activities, with focus on correct mining practices with optimal quality and quantity of ROM
• In-house mining skills
• Accuracy and execution of mine plan
• Mining employees managed on KPIs

The Group's performance is reliant on the consistent mining and production of PGM and chrome concentrates from the Tharisa Mine.

• Any unscheduled breakdown leading to a prolonged reduction in mining and/or production may have a material impact on the Group's financial performance and results of operations
• Loss of production as a result of low ROM stockpiles ahead of the plants

• Optimisation of the existing mining fleet
• Developed engineering and geological skills that are integral to in-house mining
• Preventative maintenance programme for the fleet and plant
• Long lead item spares in stock
• Purchase of ROM from third parties to alleviate low ROM stockpiles

The Group performance may be materially and adversely impacted by a cyber attack on its IT system

• The processing plants at the mine are controlled by a supervisory control and data acquisition operating system and a cyber attack could potentially subject the Group to a ransomware demand and/or cause a shutdown of the processing operations until a back-up system is operational or a work-around solution is obtained

• The Group has carried out an audit of its potential exposure to a cyber attack in respect all its IT and has implemented mitigating measures which limit its exposure to internal and third-party access.
• The Group has implemented globally accepted best-in-class software and protocols to filter malicious and criminal content, as well as the latest antivirus and security programmes
• Insurance against cyber attack including back-up and restoration assistance
• Internal backups and scheduled backup tests for integrity and continuity