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Lonmin Plc - AGM Statement ISIN code: GB0031192486 AGM Statement Speaking at Lonmin`s AGM today the Chairman, Sir John Craven, said: "The sale of our gold mining activities in Zimbabwe completed shortly after the financial year end marked a further step in our declared intention to focus only on PGM mining. We own 73% of and manage Eastern and Western Platinum Mines in South Africa, together known as Lonplats. The other shareholder is our partner Impala. In Ghana we own 28% of the share capital of Ashanti Goldfields Company Limited, of which Sam Jonah is Chief Executive. "The recapitalisation plan was implemented in June last year. We invested $75 million in so-called Mandatorily Exchangeable Notes of Ashanti, which will convert into ordinary shares at the time of an Ashanti rights issue to which they have committed before the end of the calendar year. The scheme that we developed puts Ashanti on a sound footing for the future. This has been reflected in the appreciation of Ashanti shares from around $4.80 to over $6.00. "It remains our intention to dispose of our interest in Ashanti. We are, however, in no hurry to do so nor are we under any financial constraints. In the meantime we continue to support the Board and management. "Turning to our platinum group metals business, Lonplats in operational terms performed very well in the year to 30th September 2002. New production records were set. Refined platinum production of 757,000 ounces was 8% higher than 2001 and slightly exceeded our announced target of 750,000 ounces. Increased production volumes enabled us to hold the percentage increase in unit costs below that of producer price inflation estimated to be some 14% during the financial year. "As you will appreciate our financial results are highly geared to movements in the prices of platinum group metals and the Rand/US$ exchange rate since we denominate sales in dollars but incur the majority of our costs in Rands. The Rand reached its lowest ever point against the US dollar in December 2001 and has steadily appreciated since. This has impacted on our reported financial results. Nevertheless we were able to report sound financial results that afforded us the ability to increase the annual dividend by 12% to 72 cents per share. "Much has been written about the BEE Charter, which we believe to be in the company`s long term interest. This initiative will ensure that South Africa remains a stable and prosperous country in which to invest, which is of paramount importance to us - we are mid-way through a long term investment programme of some $1 billion designed to take our annual platinum production from 609,000 ounces in 1999 to 1 million ounces in 2008. "Achieving compliance with the BEE requirements is the focus of a great deal of effort on the part of the Board and management at every level in the organisation. We are already confident that compliance with the social aspects of the Ministry`s BEE "scorecard" can be achieved in all categories. The Charter requires that we transfer equity to BEE partners. As you would imagine we are in active dialogue with Impala on these matters and I am pleased to report that we have had a healthy degree of interest from credible BEE groups seeking to invest alongside us in our quality platinum assets. "We believe that our objective of reaching agreement with the Ministry of Minerals and Energy in the near term remains possible. This is, however, subject to the finalisation of the new legal framework, which is currently running behind schedule with neither the so-called "scorecard" nor the Money Bill yet finalised. Despite our best intentions, therefore, a solution may not be finalised as soon as we originally envisaged, but we hope to bring it to a conclusion within the current financial year. We will, of course, provide you with updated information on the status of these discussions at the time of our interim results in May. "We have no reason to believe that the ownership requirements of the BEE Charter will not involve the transfer of assets other than at fair value and as I said a moment ago we believe that the Company, the mining industry and the South African economy will in the long run benefit from the changes that are being introduced. "Looking to the future our results will, as always, be a product of metal volumes, unit costs, the Rand exchange rate and metal prices. The smelter incident will impact the first two of these factors, particularly in the first half. The outlook for platinum group metal prices, particularly platinum, remains favourable, fixing this morning at $671, a 17 year high." End For further information contact: CardewChancery Anthony Cardew / Jackie +44 (0)20 7930 0777 Range FOR IMMEDIATE RELEASE 30 January 2003 ISSUED BY LONMIN PLC 4 GROSVENOR PLACE, LONDON SW1X 7YL TEL +44 (0)20 7201 6000 FAX +44 (0)20 7201 6100 Date: 30/01/2003 01:34:00 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department
