Ruukki Group, an industrial refining company, and mining company Sylvania Resources have entered into a merger implementation agreement pursuant to which Ruukki will acquire all of the issued and to be issued share capital of Sylvania. The combination of Ruukki and Sylvania will create an integrated, mine to metals platinum group metal (PGM) and ferrochrome company with operations in South Africa’s PGM rich Bushveld Igneous complex.

The rationale for the creation of the enlarged group includes:

• Creating an integrated producer and processor of PGMs and ferrochrome
• Expanding existing profitable production by accessing:
• o Previously uneconomic high chrome low grade material in tailings dumps and current risings
• o Conventional ore deposits
• Applying the direct current furnace technology which was co-developed with Mintek, South Africa’s national mineral research organisation, and is currently available at Mogale Alloys
• Allowing the development of an alternative smelting and refining route to that currently available via the platinum majors
• Combining operational, technical and marketing expertise from across the PGM and ferrochrome industries.

The Sylvania Scheme is not conditional on the success of Sylvania’s off market takeover offer for all of the ordinary shares in SA Metals nor its off market takeover offer for all of the ordinary shares in Great Australian Resources (GAR), however it is conditional on the closing of those takeover offers.

The offer of 1 Ruukki share for each 1.81 Sylvania shares based on the Ruukki share price of €2.24 on the NASDAQ OMX Helsinki Ltd and a €/£ exchange rate of 1.1758 on 29 June 2009 equates to an implied offer value of £1.05 per Sylvania share which is a premium of 28% to the Sylvania share price of £0.82 on 29 June 2009.

Once completed, the management team will consist of a combination of the executive management teams of Ruukki and Sylvania with current Ruukki Chief Executive Officer (CEO) Alwyn Smit continuing in this role and Sylvania CEO Terry McConnachie assuming the role of Chief Executive Ruukki Minerals: PGM.

Commenting on the agreement with Sylvania, Alwyn Smit, CEO of Ruukki, stated: “This transaction, following on from our recent acquisition of 84.9% of Mogale Alloys, represents a very significant step towards the realisation of our strategy to develop a fully integrated mine to metals PGM and ferrochrome business. The transaction with Sylvania is not conditional on the success of its offers for Great Australian Resources and SA Metals; however Ruukki is fully supportive of the offers and believes the two companies represent a strong fit with our strategic objectives.”

Non-executive Chairman of Sylvania, Richard Rossiter: “The acceleration of our growth strategy and this proposed merger significantly enhances Sylvania’s ability to target additional resources and maintain its low cost producer status.”

On completion of the merger, Sylvania will become a wholly-owned subsidiary of Ruukki. Assuming that Sylvania acquires 100% of Great Australian Resources and SA Metals, Ruukki will have around 381 million shares issued and outstanding of which:

• 68.6% will be held by existing Ruukki shareholders
• 31.4% will be held by Sylvania shareholders.

Sylvania is a PGM producer with tailings retreatment operations and shallow mining exploration interests located in South Africa’s PGM rich Bushveld Igneous complex. Its interests comprise:

• A 74% interest in Sylvania Metals, which treats chrome tailings from Samancor Chrome’s mines on the western and eastern limbs of the Bushveld Igneous complex
• A 25% interest in a Chrome Tailings Retreatment project at Kroondal on the western limb of the Bushveld Igneous complex, managed by Aquarius Platinum Limited
• An exploration project in the eastern limb of the Bushveld Igneous complex.

Ruukki specialises in industrial refining of specialised natural resources within two areas: wood processing and minerals. The minerals business has mining and mineral processing operations in South Africa, Turkey and Germany. The wood processing business has a strong presence in the northern part of Finland.