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LONMIN PLC - Fourth Quarter 2012 Production Report and Update on Lonmins Future Strategy

Release Date: 30/10/2012 09:00
Code(s): LON     PDF:  
Wrap Text
Fourth Quarter 2012 Production Report and Update on Lonmin’s Future Strategy

Lonmin Plc (Incorporated in England and Wales)
(Registered in the Republic of South Africa under registration number
1969/000015/10)
JSE code: LON
Issuer Code: LOLMI & ISIN : GB0031192486 ("Lonmin")

Fourth Quarter 2012 Production Report and Update on Lonmin?s Future
Strategy

Lonmin Plc, (Lonmin or the Company), the world's third largest primary
Platinum producer, today publishes its production report for the three
and twelve months to 30 September 2012 and provides an update on its
future strategy and plans to strengthen its financial structure.    This
update follows on from the Statement on Marikana and Covenants issued on
21 August 2012.

Highlights:

 -  Employees returned to work, ramp up to full production going better
    than expected. First Platinum ounces to be produced on 31 October

 -  Platinum metal in concentrate for the fourth quarter down 45.7% (vs
    Q4 2011) due to illegal strike action in August and September
      o Strike impact of around 110,000 ounces of mined Platinum
      o Refined Platinum production only down 20.8% as ounces
         extracted from stock pipeline

 -  Full year 2012 sales of over 700,000 ounces of Platinum. Immediately
    available ore reserves of 18 months, improved grades and recoveries
    and further improvement in safety statistics underlines quality of
    operational performance

 - 30 September 2012 covenants to be formally tested in early November
   and on balance of probabilities covenants are not expected to be
   breached at that test date

 -  Debt levels will rise significantly over the coming months to fund
    the production ramp up and stock pipeline rebuild  may breach
    covenants at 31 March 2013 absent additional equity and amendments to
    existing bank facilities

 - A proposed Rights Issue of approximately US$800 million (gross)
   planned to reduce indebtedness and increase financial strength

 - Proposed Rights Issue underpinned by a signed Standby Underwriting
   Agreement.  More details of proposed Rights Issue to follow in due
   course

 - Amended US Dollar and Rand bank facilities already signed removing
   EBITDA covenants and reducing quantum of US Dollar facilities
      o Resolves covenant issues

Roger Phillimore, Chairman, commented:
 The tragic events at Marikana in August are indelibly etched in
Lonmin's corporate memory and will shape thinking for years to come both
at Lonmin and more broadly in South Africa. Nevertheless the business
is now back in production and must look to the future. There is much to
do and in order to achieve this Lonmin needs solid financial foundations
including the appropriate balance sheet structure and debt facilities.
With the Standby Underwriting and amended debt facilities signed we have
taken two decisive steps on our way to delivering that and we are
confident about our financial security.




1   SUMMARY
Further to the Statement on Marikana and Covenants announced on 21
August 2012 Lonmin Plc (Lonmin or the Company or together with its
subsidiaries, the Group), the world's third largest primary platinum
producer, today publishes its production report for the three and twelve
months to 30 September 2012 and provides an update on its future
strategy (the Lonmin Renewal Plan), and plans to strengthen its
financial structure.
2   UPDATE ON RECENT EVENTS AT MARIKANA
On 10 August 2012, approximately 3,000 rock drill operators employed by
Lonmin commenced an unlawful work stoppage and protest march at the
Company's Marikana mine operations.   This was followed by significant
levels of violent intimidation of non-striking workers, with eight
employees, including two security guards as well as two policemen,
killed in the initial days of the unlawful work stoppage. As a result,
in subsequent days the vast majority of the Company's 24,000 mine
workers were absent from work and it was no longer possible to maintain
production.   Tragically the violence and unrest escalated materially
throughout that week and in total 46 people, including 40 Lonmin
employees, lost their lives.
The Board was deeply saddened by the violent unrest which took place
during this time and continues to express its profound sympathy to those
affected, including the families, friends and colleagues of those who
died.   The Company has committed to establish and contribute to a
Memorial Fund for the benefit of the families of the deceased, the
central purpose of which is to fund the education of their children.
The Company then    worked resolutely to resolve the tensions within the
various factions    of the workforce in order to create an environment
where a return to   work was possible. We refer to this tragic series of
events as the       Events at Marikana in the remainder of this
announcement.
On 18 September 2012, following an all-inclusive negotiation process
facilitated   by  the   Commission   for  Conciliation,   Mediation  and
Arbitration (CCMA) involving the Company, trade unions, the South
African Council of Churches, the Department of Mineral Resources, the
Department of Labour and delegates of striking employees, an addendum to
the existing wage agreement was signed by the Company, the National
Union of Mineworkers, the Association of Mineworkers and Construction
Union, Solidarity, the United Association of South Africa and
representatives of the delegates of striking employees, which agreed on
a return to work with effect from 20 September 2012.
On 20 September 2012, 81.4% of Lonmin's employees returned to work and
the initial focus of the Company was to ensure a safe resumption of
production. As a result it was not until 1 October 2012 that the normal
mine shift pattern was re-established and blasting across the property
restarted. Since then employee attendance has continued at high levels,
with normal shift patterns, and in the week leading up to this
announcement attendance averaged 93.1%, which is regarded by the Board
as a normal level for Lonmin's business, due to scheduled leave,
sickness and other reasons for absence.        As of the date of this
announcement, all concentrators are now in production, except for the
Number One UG2 plant, which is down for a planned upgrade. The Number
One and Number Two smelters are fully operational, as are the Base
Metals Refinery and the Precious Metals Refinery.      It is anticipated
that the first Platinum ounces will be turned out on 31 October.
3     FOURTH QUARTER AND FULL YEAR PRODUCTION REPORT
3.1   Overview and Safety
During the first part of the fourth quarter of the 2012 financial year,
operations ran well and as planned. Operational momentum, however, was
lost due to the Events at Marikana, which resulted in prolonged
absenteeism and effectively stopped operations for the rest of the
period under review. The impact on mining operations of the Events at
Marikana, including the disruption of ore purchases from our joint
venture operation, Pandora, led to the loss of mine production estimated
at 1.8 million tonnes of ore containing an estimated 110,000 Platinum
ounces.
Safety is a priority in everything we do and we continue to work on
initiatives   that  are   geared  towards  improving   our  performance.
Regrettably, during the 2012 financial year, there were two fatalities
during the course of our mining activities and we extend our deepest
condolences to the families. The full year safety record, absent these
fatalities, has been commendable as Lonmin achieved the lowest Lost Time
Injury Frequency Rate (LTIFR) amongst the primary producers in the South
African platinum industry of 4.16 per million man hours worked, 11.7%
lower than the 4.71 achieved in 2011.
3.2   Mining
Our operations produced 1.63 million tonnes during the fourth quarter of
the 2012 financial year, a decrease of 1.65 million tonnes, or 50.4%,
from the fourth quarter of the 2011 financial year.         The fall in
production is primarily as a direct consequence of the Events at
Marikana.   Production at Karee decreased by 50.6% primarily due to
losses from the Events at Marikana which totalled around 706,000 tonnes.
Production at Westerns declined by 58.5%, with the expected depletion of
Newman and the loss of around 460,000 tonnes due to the Events at
Marikana taking their toll. Middelkraal registered a decrease of 43.8%,
with around 333,000 tonnes lost to the Events at Marikana, but still
showed underlying growth as production at Hossy and Saffy shafts
continued to improve.    This was tempered by the negative impact of
previously flagged adverse ground conditions experienced at Saffy shaft.
Easterns lost 52.3%, or 163,743 tonnes of production, all essentially
due to the Events at Marikana.
Production at our Merensky opencast operations showed a slight decrease
of 23,133 tonnes, or 17%, when compared to the fourth quarter of the
2011 financial year, as a consequence of the Events at Marikana which
constrained our ability to optimise production from this operation.
Losses from Section 54 safety stoppages continued to moderate and
totalled 26,000 tonnes in the quarter, compared to 83,000 tonnes in the
fourth quarter of the 2011 financial year.
3.3   Concentrators, Smelting and Refining
Total tonnes milled in the fourth quarter of the 2012 financial year
were 1.70 million, a decrease of 48.0% from the fourth quarter of the
2011 financial year.
Underground milled head grade in the quarter was 4.69 grammes per tonne
(5PGE+Au), up 0.14 grammes per tonne, or 2.9%, compared to the fourth
quarter of the 2011 financial year. The opencast grade was 3.06 grammes
per tonne, a 12.1% improvement compared to the fourth quarter of the
2011 financial year, a result of the continued focus on grade.      The
overall milled head grade was 4.59 grammes per tonne, an increase of
1.8% when compared to the prior year period.
Underground and overall concentrator recoveries both reached 86.7% in
the quarter, an improvement of 1.6% when compared with the fourth
quarter of the 2011 financial year. Despite the challenges caused by the
Events at Marikana the improvements in grade and recoveries over the
prior year period are positive.
Platinum metal in concentrate from the Marikana operations for the
quarter was 102,822 saleable ounces, a quarter-on-quarter decrease of
89,055 ounces and 89,048 ounces lower than the fourth quarter of the
2011 financial year.   Including Pandora and concentrate purchases, the
concentrators produced 108,795 saleable Platinum ounces in total for the
quarter, a decrease of 45.7% on the fourth quarter of the 2011 financial
year.
Total refined production for the quarter was much higher than metal in
concentrate however with 196,179 ounces of saleable Platinum and 396,327
ounces of Platinum Group Metals (PGMs) produced in the fourth quarter.
This was achieved as the pipeline of ounces was significantly reduced in
order to meet customer requirements and maximise liquidity.     Platinum
refined production decreased by 20.8% when compared to the fourth
quarter of the 2011 financial year, primarily as a direct consequence of
the Events at Marikana, although the decrease was notably less than the
fall in Platinum metal in concentrate of 45.7%.
3.4   Sales and Pricing
Sales for the fourth quarter of the 2012 financial year were 233,054
Platinum ounces, and 476,104 PGM ounces with Platinum sales being 3.7%
lower than the fourth quarter of the 2011 financial year. Sales in the
fourth quarter benefited from the toll refining of 18,021 ounces of
Platinum, and more significantly, running down stocks in the pipeline.
The US Dollar basket price including base metal revenue, at US$1,103 was
20.6% lower than the fourth quarter of the 2011 financial year, but 1.6%
higher than the third quarter of the 2012 financial year.            The
corresponding Rand basket price at ZAR 9,031 was 9.2% lower than the
prior year period, although equivalent to the third quarter of the 2012
financial year.
3.5   Full Year Production
Total tonnes mined during the 2012 financial year were 10.4 million, a
1.3 million tonne decrease from the 2011 financial year.    As announced
at the time of the Company's interim results, productivity in the first
half of the year was impacted by the uncharacteristically high number of
Section 54 safety stoppages that were seen across the South African PGM
mining industry during this period. The second half was impacted by the
Events at Marikana described above which affected the whole operation.
The combined impact of these disruptions in the period was a loss of
approximately 2.4 million tonnes, of which 1.8 million tonnes,
equivalent to 110,000 Platinum ounces, was as a result of the Events at
Marikana.
Production at Karee decreased by only 1.2% against the prior financial
year to 4.4 million tonnes, reflecting the strike in 2011 at Karee and
cushioned by the production momentum which had built up before the
Events at Marikana. The production decline of 23% to 2.6 million tonnes
at Westerns was more pronounced as it also reflected the continued
depletion of the Newman shaft as well as the effect of the Events at
Marikana. Middelkraal mined 1.8 million tonnes, a decrease of 7.5% or
142,000 tonnes compared to the prior financial year despite losing
around 333,000 tonnes due to the Events at Marikana. The underlying
growth at Hossy and Saffy was lower than planned. This was mainly due
to adverse underground conditions at Saffy as Hossy benefited from the
introduction of hybrid mining.   At Easterns, production decreased from
1.2 million tonnes in the 2011 financial year to 1.0 million tonnes in
the 2012 financial year, mainly due to the effect of the Events at
Marikana.
Total tonnes milled during the 2012 financial year declined by 10.1% to
10.8 million tonnes when compared against 12.0 million tonnes in 2011.
The total milled head grade improved to 4.49 grammes per tonne, a 2.2%
increase on the prior financial year with a targeted improvement in
opencast grade.
Overall recoveries for the 2012 financial year improved to 86.1%,
compared to 85.3% in the 2011 financial year. This positive improvement
can be mainly attributed to the Easterns Tailings Treatment Plant, which
came on-line in April 2012.      Platinum in concentrate for the 2012
financial year fell by 5.5%, compared to the 2011 financial year, to
679,821 saleable ounces.
Total refined production for the 2012 financial year was 687,372
Platinum ounces and 1,349,802 PGM ounces, compared to 731,273 Platinum
ounces and 1,446,662 PGM ounces in the 2011 financial year, with the
decreases being primarily a result of the Events at Marikana and the
Section 54 safety stoppages.    Sales for the 2012 financial year were
701,831 Platinum ounces, 2.6% lower than the 720,783 ounces achieved in
the 2011 financial year and PGM sales were 3.6% lower than the prior
year at 1,383,945 PGM ounces, despite benefiting from the depletion of
stocks in the pipeline mentioned above.
The US Dollar basket price including base metal revenue at US$1,163 was
16.3% lower than the prior financial year. The corresponding Rand basket
price including base metal revenue, was ZAR9,304, which was 4.2% lower
than the 2011 financial year.
3.6   Outlook
The production of Platinum ounces as saleable metal in concentrate is
forecast to be around 680,000 ounces for the 2013 financial year. This
is below the Company's previous expectations for two reasons associated
with the Events at Marikana: first, due to the estimated time required
to return to normal productivity levels; and, secondly, due to the
impact of lower capital spend and the suspension of production at K4
shaft which, as previously announced, was placed on care and maintenance
in September 2012.
This metal in concentrate output is expected to result in Platinum sales
of around 660,000 ounces for the 2013 financial year. The shortfall of
around 20,000 ounces from the metal in concentrate output represents the
necessary build-up of pipeline ounces in the smelters and the refineries
during the 2013 financial year to replace stocks depleted during the
fourth quarter of the 2012 financial year.
The Events at Marikana, and subsequent strike action at almost all other
South African PGM producers have, given the importance of South African
producers to global PGM production, in a short space of time altered the
outlook for the supply side of the PGM industry.       These events have
increased operating costs for Lonmin and other companies in the South
African PGM mining industry, while at the same time creating supply
constraints which have contributed to an increase in PGM prices.     The
Board believes that the disruption to the South African PGM mining
industry is also likely to result in some capacity reductions as higher
cost operations are forced to reduce output or close down, which the
Board believes should sustain improved pricing for PGMs.
Over the longer term, the Board also believes that improved PGM pricing
should be supported by underlying positive demand dynamics. Automotive
demand is expected to be driven by a combination of increasingly
stringent emissions legislation, the ongoing extension of this regime to
non-road applications and a positive outlook for vehicle sales in US and
Chinese markets.    Although Chinese growth expectations have recently
been downgraded, consumer expenditure in China is still expected to
increase.
4       UPDATE ON LONMIN'S FUTURE STRATEGY
4.1     Balance Sheet and Funding
On 21 August 2012, Lonmin announced that it was actively reviewing all
options available to strengthen its financial structure, including
possible access to the equity capital markets. Lonmin is today providing
an update on this process.


4.1.1       Lonmin's long-term capital structure
The   Board  believes   that   Lonmin's  long-life   assets  should   be
substantially funded by long-term equity capital, supplemented by free
cash flow, with appropriate levels of debt funding available to provide
additional financial flexibility for the Group as well as to reduce its
overall cost of capital. In this context, the Board views debt financing
as providing the flexibility required to fund Lonmin's normal working
capital requirements and to accommodate short-term cash flow volatility
inherent in an operationally geared business arising from either or both
of movements in the price of PGMs and the Rand / US Dollar exchange
rate. The Board recognises that the business cannot support significant
financial leverage given its high level of operational gearing.       In
addition, the Board believes that it would be more appropriate for the
Group's debt facilities to contain covenants that are linked to capital
expenditure and tangible net worth rather than covenants linked to
profitability, which in the Board's view do not reflect the significant
asset backing that underpins the longer-term credit quality of the
Group.
4.1.2       Balance sheet refinancing
In accordance with the principles outlined above, Lonmin is announcing
that:

    -   it intends to raise approximately US$800 million (gross proceeds)
        of new equity capital by way of a Rights Issue (the Rights
        Issue) to reduce the Group?s level of indebtedness and increase
        its financial strength; and

    -   it has reached agreement with both the USD and ZAR lenders on the
        terms of amendments to its existing debt facilities (the Amended
        Facilities).

In connection with the Rights Issue, Lonmin has entered into a standby
equity underwriting letter pursuant to which the Rights Issue will be
underwritten at a minimum price of US$1 per share, or such higher price
as may be agreed.    The Company will announce further details of the
Rights Issue, including as to its terms following consultation with
shareholders, in due course.
The Amended Facilities are conditional on the Company raising at least
US$700 million (net proceeds) of new equity capital by 31 December 2012
and the Company applying the net equity proceeds raised to permanently
reduce the Company's available US$ denominated facilities from US$700
million to US$400 million. In addition, the Group has agreed that the
existing net debt / EBITDA and EBITDA / net interest covenants in both
its existing US$700 million and ZAR1.98 billion facilities will be
removed from the Amended Facilities and that they will be substituted
with the following covenants:

  -   consolidated tangible net worth will not be less than US$2,250
      million;

  -   net debt will not exceed 25% of consolidated tangible net worth;
      and

  -   capital expenditure will not exceed certain Rand-denominated
      thresholds, set at approximately 10% above budgeted levels, for
      twelve-month periods to 30 September and 31 March each year and
      the six-month period to 31 March 2013. This covenant is only to
      be tested if consolidated Group net debt exceeds US$300 million as
      at 30 September or 31 March of any relevant year or, in respect of
      the amended US Dollar facility agreement only, the aggregate
      amount outstanding under the US$ facility exceeds US$75 million at
      any time during the last six months of the relevant test period.
      Details   of  Lonmin's   currently  budgeted   levels  of   capital
      expenditure are set out in section 4.3.2 of this announcement.

Separately, Lonmin has been carefully monitoring its covenant position
in relation to its existing debt facilities. Whilst the covenants as at
30 September 2012 are not due to be formally tested until the results
for the year then ended are published in November, Lonmin considers that
on the balance of probabilities its covenants will not be breached as at
that test date. However, the Company's debt levels are likely to rise
significantly over the coming months in order to fund the production
ramp up and enable stock levels to be rebuilt through the production
pipeline. In light of this, the Board believes that the Company may
breach its covenants under the terms of the Company's existing debt
facilities when they are tested in relation to the Company's interim
results for the six months ended 31 March 2013, or at a subsequent test
date, in the event that the Company does not raise new equity and agree
amendments to its existing bank facilities, as described above.

Lonmin's Board has been focused on stabilising the Company's financial
position by negotiating new banking arrangements with its lending banks
and preparing to raise new equity. The Board strongly believes that it
is prudent, necessary and in all shareholders' interests to implement
this comprehensive balance sheet restructuring at the earliest possible
opportunity.

4.2   Background to the Lonmin Renewal Plan
During the 2012 financial year, the market price of PGMs has been
volatile, in large part due to general global macro-economic conditions,
with the depressed environment in the Eurozone having a particular
impact on the price of platinum.    Prior to the Events at Marikana the
Board had commenced a review of its growth strategy, future production
profile and capital investment programme as a result of the emerging
weak short-term demand outlook for PGMs and the weak short-term pricing
environment.
At the time of its full year results for the 2011 financial year, Lonmin
provided guidance on its planned capital expenditure of around US$450
million for the 2012 financial year, based on the then outlook for PGM
markets. This guidance was reiterated at the time of publication of the
Company's interim results in May 2012, recognising the uncertain near-
term outlook for PGM prices (the price of platinum had fallen from a
2012 peak of US$1,722 per ounce on 28 February 2012 to US$1,440 by the
time of publication of the Company's interim results on 14 May 2012),
and stating the Company's intention to defer future capital expenditure
if appropriate.
By the time of publication of the Third Quarter Production Report on 26
July 2012, the platinum price had remained below US$1,500 per ounce for
more than eleven weeks, and Lonmin acknowledged that the weak pricing
environment was likely to persist for longer than anticipated.      As a
result, the Company announced that capital expenditure would be reduced
to around US$430 million in the 2012 financial year (reflecting the
proximity of the year end and the lead-time relating to capital
expenditure programmes), and to around US$250 million in each of the
2013 and 2014 financial years.       This reduction would be achieved
principally through the deferral of capital spend on the Hossy, K4 and
Saffy shafts, as well as the optimisation of some of the processing
projects. Against this backdrop, the Events at Marikana resulted in a
material reduction in mine production at a time when the Company was not
well-positioned to absorb the resulting financial shock, though
production and sales of finished metal continued during the period of
the work stoppage by maintaining operations in the Process Division
through the running down of stocks in the pipeline.
The Board believes that the Lonmin Renewal Plan described below,
together with the proposed equity issuance and the Amended Facilities,
represents the most appropriate strategy in the current environment.
4.3   The Lonmin Renewal Plan

The Company continues to have a clear strategic focus on its mineral
resources, mining and processing infrastructure at Marikana, and has
invested significantly in these areas in recent years. This investment
had two aims.     First, it was necessary in order to restore the
operational health of the business which had fallen to unacceptable
levels prior to 2008.   The Board believes this aim has been achieved.
There have been significant improvements in metrics such as development,
grade and recoveries, and following further expenditure in the Process
Division the risk of smelter outages, for example, has fallen
materially.    The second aim was to deliver significant growth in
production and sales over the medium-term in order to meet expected
demand and to result in a reduction in unit costs over the corresponding
period. Accordingly, the Board was positioning the Company to move down
the industry cost curve over that period.
In light of the Events at Marikana, the focus of and priority for the
Company during the 2013 financial year is to return productivity levels
safely back to, and then above, the run-rates achieved prior to those
events and to improve relationships with employees. Part of this will
require   implementing  sustainable   inclusive  collective   bargaining
structures that facilitate wage agreements that are accepted by all the
relevant stakeholders to be binding. Lonmin is today announcing plans to
target production at Marikana of around 680,000 Platinum ounces of metal
in concentrate in the year ending 30 September 2013, although Platinum
sales for the year ending 30 September 2013 are expected to be around
660,000 ounces as in-process inventory levels are rebuilt within the
Process Division. The ramp up back to these normalised levels of
productivity is so far progressing better than planned and the Directors
fully expect the Marikana operations to be operating at previously
achieved productivity run-rates during the third quarter of the 2013
financial year.
The Board intends to continue to monitor developments in PGM market
conditions closely and may accelerate or delay planned investment if it
deems doing so to be in the best interests of shareholders.
Certain statements in this section of this announcement constitute
forward-looking statements.   These forward-looking statements are not
guarantees of future financial performance and our actual results could
differ materially from those expressed or implied by these forward-
looking statements. Investors are urged not to place undue reliance on
any such statements.


4.3.1    Future Platinum sales in the Lonmin Renewal Plan
Beyond the 2013 financial year, the Company is continuing to target
growth in production which the Directors believe will result in an
improvement in its relative position on the cost curve. On the basis of
the Lonmin Renewal Plan, the Directors are targeting sales in excess of
750,000 Platinum ounces in each of the 2014 and 2015 financial years,
and in excess of 800,000 Platinum ounces per annum by the 2016 financial
year. K4, which when at full capacity will be one of Lonmin's largest
shafts and which is currently on care and maintenance, is expected to
restart mining operations in the latter part of the 2014 financial year
although the impact on production will initially be gradual until
capital expenditure levels increase.       This revised growth profile
reflects both the anticipated short-term demand outlook for PGMs, and
the impact on Lonmin's operations of the Events at Marikana.
However, the Directors believe that the significant investment that has
been made in developing ore reserves and additional mine shaft hoisting
capacity to enable future growth provides the Company with a degree of
operational flexibility which should enable it to increase production in
the event that market conditions improve in the short term. By way of
example, as at 30 September 2012, the Company had immediately available
ore reserves equating to approximately 18 months of mining, which the
Directors believe to be a prudent level. The Company's planned capital
expenditure over the next two financial years is expected at least to
maintain this level of ore reserve availability. In the four financial
years ended 30 September 2012, the Company's mining and processing
infrastructure   at  Marikana  has  seen   considerable  investment  of
approximately US$1.3 billion.
4.3.2    Future capital expenditure in the Lonmin Renewal Plan

In order to achieve the targeted level of production Lonmin expects to
invest approximately US$175 million for the 2013 financial year and
approximately US$210 million for the 2014 financial year (depending on
the Rand / US Dollar exchange rate).          Of the aggregate capital
expenditure planned for the 2013 and 2014 financial years, approximately
US$260 million relates to the Mining Division with the balance relating
to the Process Division and to spend as part of the Company's Social and
Labour Plan commitments.    In the 2015 and 2016 financial years, the
Directors expect that capital expenditure will rise to around US$400
million per annum (depending on the Rand / US Dollar exchange rate).
The step-up in capital expenditure from 2015 onwards primarily relates
to further development in Hossy, Saffy and K4 in order to support the
increased production levels and processing projects.       However, the
increase in capital expenditure in the 2015 and 2016 financial years is
contingent upon performance in the earlier years and the Directors
believing, at that time, that there is sufficient market demand and
sufficiently attractive pricing for PGMs to warrant the increased
investment. The thresholds in the financial covenant linked to capital
expenditure within the Amended Facilities described in section 4.1,
which may or may not be tested, have been set at approximately 10% above
the budgeted levels of capital expenditure outlined above.
4.3.3    Future cost profile in the Lonmin Renewal Plan

The Events at Marikana have created two specific cost pressures for the
Company in the 2013 financial year. First, the agreement entered into
with the trades unions and worker representatives increased the wages
paid to Lonmin's workers employed in the Category 4-9 bargaining units
by about 14% from 1 October 2012, which includes the wage increase of 9%
due under the existing wage agreement signed in 2011.      As a result,
employment costs overall will increase by approximately 11% in the 2013
financial year against the normalised employee cost in FY2012.
Secondly, there is inefficiency inherent in any production ramp up, as
the business bears the full costs of operations, but does not achieve
full production in the early stages of that ramp up. As a result, the
Directors anticipate unit costs of around ZAR9,350 per PGM ounce
produced for the 2013 financial year.
A number of measures are in place, or are expected to be implemented
during the 2013 financial year, both to address the pressures of gross
cost increases and also to improve the effectiveness of the Company's
expenditure. These measures include:
  -     A review of the Company?s operating model, as well as management
        structure, to align with the Lonmin Renewal Plan is expected to
        yield savings in excess of ZAR200 million per annum, on an
        annualised basis, with the full effect from 2014 onwards;

  -     A procurement initiative known as Total Cost of Ownership is
        being implemented which is expected to yield savings of ZAR100
        million in the second half of the 2013 financial year and in each
        subsequent financial year thereafter; and

  -     The Company has already completed and embedded a productivity
        enhancement programme known as Line of Sight and Mission
        Directed Work Teams, which will form the foundation for a series
        of further productivity and optimisation initiatives in the 2013
        financial year.    Team effectiveness training trials at various
        shafts in the Karee mining unit during the 2012 financial year
        have shown the potential of this initiative, which will be
        extended across Lonmin during the 2013 financial year. This will
        be supported by improved systems and training, particularly for
        supervisory management.
The Directors believe that, taken together, these       initiatives   will
improve the productivity performance of the Company.
The Directors expect that over the medium to longer term, the Company's
earliest generation of shafts will reach the end of their economic lives
as their mineral reserves are depleted. However, the Company has, over
the past several years, undertaken a number of capital projects,
principally at its second generation of shafts, K3, Hossy, Saffy and K4,
which, when fully ramped up should drive production growth and improve
its relative unit cost position.
Taken together, the cost savings, volume-related operational benefits
and efficiencies anticipated in the Lonmin Renewal Plan lead the
Directors currently to expect that unit costs for the 2014 financial
year will increase by less than the wage inflation in South Africa.
This is predicated on there being no further significant disruption to
the Company's operations and all other cost increases being in line with
recent market norms.
4.3.4      Our approach to social licence
The Board is of the view that delivering on Transformation and social
responsibility obligations is an essential element of Lonmin's licence
to operate in South Africa, both legally in terms of its obligations
under the Mining Charter and morally as a good corporate citizen of the
country. Lonmin has transformation goals which were established in line
with the Mining Charter and are aligned to our Social Labour Plan
commitments. We have worked with determination to accomplish the goals
we set ourselves and have made significant achievements in many areas,
notably in our education programmes for our communities, in the number
of Historically Disadvantaged South African (HDSA) employees within our
management structures, which now stands at 36% (excluding white women),
and in our initiatives to procure from HDSA managed and owned suppliers.
Our gender related policies and procedures designed to increase the
participation of women in the Company have had some success, with the
number of women at the Company having grown by 66% since 2007, but there
are still challenges in order to meet our 2014 commitments.
Nevertheless, we recognise that we have delivered more slowly in other
areas.   The Events at Marikana and recent strikes across the entire
mining industry make it clear that we must continue and where necessary
accelerate our efforts in some initiatives, working more closely and
cooperatively with key stakeholders, particularly our employees and
local and central government and our communities. Two particularly
relevant areas of focus are housing and our relationship with our
communities.
Housing is the hardest task the wider mining sector faces, in terms of
targets it has been set. Lonmin is far from alone in trying to deal with
what is a national problem in South Africa.
Lonmin's   housing  strategy   has  comprised three elements:  hostel
conversion, Marikana housing ownership and the long-term housing
programme. To date we have converted 79 of the 128 old-style hostels
into 931 single person occupancy and 580 family units and we have a
detailed plan to convert the remaining blocks by 31 December 2014. We
have also seen 242 employees become owners of homes, sold through the
Marikana Housing Development Corporation.
The challenge however is in facilitating the provision of mass
affordable   employee   accommodation particularly   for  our   migrant
workforce.    The Events at Marikana have highlighted the critical
shortage of affordable housing as a major challenge for Lonmin and the
South African nation more broadly, reflecting the need for a solution
that involves all stakeholders, including government, mining companies
and employees.      Management is engaging with employees and all
stakeholders as necessary to understand better their requirements as
part of developing a framework for a sustainable and fundable solution.
The Company recognises there will be a cost to this and will develop
appropriate budgets in due course.
The partnership Lonmin has with the Greater Lonmin Community where its
operations are based is important to the Company.    For over 18 years,
the Company has paid royalties into a trust fund on behalf of the Bapo
ba Mogale tribal community.   The amount of funds paid over to date is
approximately ZAR371 million. We have in recent times seen the benefits
of our long-term investment in education and health through improved
examination results and various health initiatives. There is still much
to be done and we need to work more closely with our communities to
improve dialogue and rebuild trust as this will be key to enhancing
better relations with them.   Lonmin's management team will be focusing
on this in the coming months.
Equity
The Company is required to increase HDSA ownership in its prospecting
and mining ventures by 31 December 2014 to the 26% required under the
Mining Charter.  As at 30 September 2012, HDSA investors directly and
indirectly owned 18% of the share capital of the Company's subsidiaries
that own and operate Marikana and Limpopo and that participate in the
Pandora joint venture, as well as 26% of the share capital of its
subsidiary that owns Akanani.
The Company's BEE partner, Incwala Resources, is owned as to 50.03% of
its equity by Shanduka.    Other equity investors in Incwala Resources
include a trust for the benefit of community members, the Industrial
Development Corporation and Lonmin itself.  In considering how best to
meet its HDSA 2014 ownership requirements, the Board believes that one
element it must consider is how to achieve further HDSA ownership
through a broad-based solution as this will ultimately be in the best
interests of shareholders.
It is possible that the Company may wish to facilitate the creation of
trusts for the benefit of current and future employees, and separately
for members of the Greater Lonmin Community, to which new shares could
be allotted for their sole economic benefit. In order to achieve this
increase in HDSA participation the Company is considering a range of
options involving the issuance of additional shares which could dilute
the interests of shareholders.    The Company has not yet finalised its
proposals, and any future transaction would need to be considered on its
merits and may require prior shareholder approval.
Judicial Commission of Inquiry
The Judicial Commission of Inquiry into the Events at Marikana (the
Inquiry) commenced on 1 October. The Inquiry is being led by retired
Judge Farlam.   After inspecting the site on 1 and 2 October 2012, the
Inquiry was adjourned until 22 October so as to give the relatives of
the deceased an opportunity to attend the Inquiry and to give the
participants a reasonable period of time within which to prepare.    The
Inquiry heard opening statements from all participants on 22 and 23
October and commenced with oral testimony but was then again adjourned
until 29 October. Lonmin welcomes this Inquiry and will co-operate fully
with its work.
5    MANAGEMENT UPDATE
As previously notified, Ian Farmer, Chief Executive Officer, is
undergoing a course of treatment and has been on sick leave since
August.
Simon Scott was appointed Acting Chief Executive Officer on 24 August
2012.   He has ably handled the extremely difficult circumstances since
the Events at Marikana in August and has been strongly supported by his
executive team.    His operational team of Albert Jamieson, Barnard
Mokwena, Mark Munroe and Natascha Viljoen have all worked at Lonmin for
many years and have been responsible for the significant improvement in
the operational performance of the business that has occurred since
2008.
Roger Phillimore and Mahomed Seedat have joined the Executive Committee,
which has responsibility for the day-to-day business of the Company and
is chaired by Simon.    Mahomed was Chief Operating Officer at Lonmin
until the end of 2010.       In order to support Simon further,      Alan
Ferguson, who was Chief Financial Officer until December 2010, has   been
working with him as a part-time consultant. Mahomed and Alan bring   with
them an in-depth knowledge of Lonmin which has been invaluable at    this
challenging time.
The executive team is supported by the Non-Executive Directors, who have
considerable recent and relevant experience of the mining industry and
South Africa.
The current arrangements are appropriate for the time being and        are
working well to stabilise the Company and bring production back         to
normal. The Board keeps under constant and critical review the best    way
to proceed on a permanent basis and will take the necessary steps as   and
when it deems them appropriate.
6      CONCLUSION
The Events at Marikana are indelibly etched in Lonmin's corporate memory
and will shape thinking for years to come both at Lonmin and more
broadly in South Africa.     Nonetheless the business is now back in
production and must look to the future both for the good of its
shareholders and in order to play its part in transformation in South
Africa. There is much to do in rebuilding relationships with the labour
force, right-sizing the overhead structure, driving productivity and
delivering the ounces. In order to achieve this, the Company needs solid
financial foundations including the appropriate balance sheet structure
and debt facilities.
The Board strongly believes that it is prudent, necessary and in all
shareholders' interests to achieve this comprehensive balance sheet
restructuring at the earliest possible opportunity.      The Board is
confident that the direction set out in this document is the right one
for the Company and all of its shareholders.

ENDS
Enquiries:
Investors / Analysts:
Lonmin
Tanya    Chikanza   (Head     of    +27 11 218 8300
Investor Relations)                               /
                                        +44 20 7201
                                               6007
Ruli      Diseko        (Investor   +27 11 218 8373
Relations Manager)


Media:
Cardew Group
James Clark / Emma Crawshaw             +44 20 7930
                                           0777
Sue Vey                         +27 72 644 9777


Brunswick - Johannesburg
Cecilia de Almeida              +27 11 502 7400
                                              /
                                +27 83 325 9169
The Company will be hosting a conference call for investors and analysts
today at 08:00 UK / 10:00 SA time.
Notes to editors
Lonmin, which is listed on both the London Stock Exchange and the
Johannesburg Stock Exchange, is one of the world's largest primary
producers of PGMs. These metals are essential for many industrial
applications, especially catalytic converters for internal combustion
engine emissions, as well as their widespread use in jewellery.

Lonmin's operations are situated in the Bushveld Complex in         South
Africa, where nearly 80% of known global PGM resources are found.

The Company creates value for shareholders through mining, refining and
marketing PGMs and has a vertically integrated operational structure -
from mine to market. Lonmin's mining operations extract ore from which
the Process Division produces refined PGMs for delivery to customers.
Underpinning the operations is the Shared Services function which
provides high quality levels of support and infrastructure across the
operations.

For further information please visit our website: http://www.lonmin.com


This announcement includes forward-looking statements. All statements
other than statements of historical fact included in this announcement,
including without limitation those regarding Lonmin's plans, objectives
and expected performance, are forward-looking statements. Lonmin has
based these forward-looking statements on its current expectations and
projections   about  future   events,  including   numerous  assumptions
regarding its present and future business strategies, operations, and
the environment in which it will operate in the future. Forward-looking
statements generally can be identified by the use of forward-looking
terminology such as 'ambition', 'may', 'will', 'could', 'would',
'expect', 'intend', 'estimate', 'anticipate', 'believe', 'plan', 'seek'
or 'continue', or negative forms or variations of similar terminology.
Such forward-looking statements involve known and unknown risks,
uncertainties, assumptions and other factors related to Lonmin,
including, among other factors: (1) material adverse changes in economic
conditions generally or in relevant markets or industries in particular;
(2) fluctuations in demand and pricing in the mineral resource industry
and fluctuations in exchange rates; (3) future regulatory and
legislative actions and conditions affecting Lonmin's operating areas;
(4) obtaining and retaining skilled workers and key executives; and (5)
acts of war and terrorism. By their nature, forward-looking statements
involve risks, uncertainties and assumptions and many relate to factors
which are beyond Lonmins control, such as future market conditions and
the behaviour of other market participants. Actual results may differ
materially from those expressed in forward-looking statements. Given
these risks, uncertainties, and assumptions, you are cautioned not to
put undue reliance on any forward-looking statements. In addition, the
inclusion   of   such  forward-looking   statements   should   under  no
circumstances be regarded as a representation by Lonmin that Lonmin will
achieve any results set out in such statements or that the underlying
assumptions used will in fact be the case. Other than as required by
applicable law or the applicable rules of any exchange on which Lonmin's
securities (the "Securities") may be listed, Lonmin has no intention or
obligation to update or revise any forward-looking statements included
in this announcement after the publication of this announcement.
This announcement is an advertisement and not a prospectus. It does not
constitute, or form part of, an offer to sell or an invitation to
purchase or subscribe for any securities or a solicitation of any offer
to purchase, otherwise acquire, subscribe for, sell or otherwise dispose
of any Securities. Investors should not subscribe for or purchase any
Securities referred to in this announcement except on the basis of
information in the prospectus and any supplement or amendment thereto
(the "Prospectus") to be published by the Company in due course, if the
proposed Rights Issue proceeds, in connection with the Rights Issue and
the admission of shares in the capital of the Company to the Official
List of the United Kingdom Listing Authority and to trading on the
London Stock Exchange plc's main market for listed securities and any
associated offer to the public. Copies of the Prospectus will, following
publication, be available from the Company's registered office.
This announcement is not an offer to sell or a solicitation of any offer
to buy the Securities in the United States, Australia, Canada, Japan, or
in any other jurisdiction where such offer or sale would be unlawful or
to any person to whom it would be unlawful to make such offer or
solicitation.
The Securities have not been and will not be registered under the US
Securities Act of 1933 (the "Securities Act"), or with any securities
regulatory authority of any State or other jurisdiction of the United
States, and may not be offered, sold, resold, pledged, taken up,
exercised,   renounced,   or   otherwise  delivered,   distributed   or
transferred, directly or indirectly, into or within the United States
except pursuant to an exemption from, or in a transaction not subject
to, the registration requirements of the Securities Act and in
compliance with any applicable securities laws of any State or other
jurisdiction of the United States. No public offering of the Securities
is being made in the United States.




Appendix
Fourth Quarter 2012 Production

                                                3 months   3 months       12       12
                                                                      months   months
                                                   to 30      to 30    to 30    to 30
                                                     Sep        Sep      Sep      Sep
                                                    2012       2011     2012     2011
Tonnes    Marikana        Karee1           kt        654      1 323    4 384    4 438
mined
                          Westerns1        kt        380        915    2 643    3 434
                          Middelkraal
                          1                kt        308        549    1 762    1 904
                          Easterns1        kt        150        313      997    1 174
                          Underground      kt      1 491      3 100    9 786   10 949
                          Opencast         kt        113        136      443      601
                          Total            kt      1 604      3 236   10 229   11 550
          Pandora
                          Underground      kt         25         47      185      168
          attributable2
          Lonmin          Underground      kt      1 516      3 147    9 971   11 117
          Platinum        Opencast         kt        113        136      443      601
                          Total            kt      1 629      3 283   10 413   11 718
                          % UG2             %      71.0%      72.3%    71.0%    72.7%

Tonnes    Marikana        Underground      kt      1 523      3 060    9 936   10 896
milled3                   Opencast         kt        102         80      450      748
                          Total            kt      1 625      3 140   10 386   11 643
          Pandora4        Underground      kt         72        126      432      394
          Lonmin          Underground      kt      1 596      3 187   10 367   11 290
          Platinum                         g/
                          Head grade5               4.69       4.55     4.56     4.54
                                            t
                          Recovery
                                           %       86.7%      85.4%    86.1%    85.4%
                          rate6
                          Opencast         kt        102         80      450      748
                                       5   g/
                          Head grade                3.06       2.73     3.01     2.23
                                            t
                          Recovery
                                           %       86.9%      81.0%    85.9%    81.6%
                          rate6
                          Total            kt      1 698      3 267   10 817   12 037
                                       5   g/
                          Head grade                4.59       4.51     4.49     4.40
                                            t
                          Recovery
                                           %       86.7%      85.4%    86.1%    85.3%
                          rate6
                                             3 months     3 months          12          12
                                                                        months      months
                                                to 30        to 30       to 30       to 30
                                                  Sep          Sep         Sep         Sep
                                                 2012         2011        2012        2011
Metals in    Marikana      Platinum     oz    102 822      191 870     646 393     694 149
concentrat                 Palladium    oz     47 685       89 684     295 409     324 655
e7
                           Gold         oz      2 730        4 463      16 925      17 471
                           Rhodium      oz     13 265       25 736      83 144      91 659
                           Ruthenium    oz     21 532       40 114     127 269     144 369
                           Iridium      oz      4 688        8 642      27 610      31 294
                                                                         1 196       1 303
                           Total PGMs   oz    192 721      360 509
                                                                           750         597
                           Nickel8      MT          554          929     3 440       3 496
                                 8
                           Copper       MT          352          574     2 199       2 200
                       4
             Pandora       Platinum     oz      5   068      8   445    30 625      25 241
                           Palladium    oz      2   368      3   985    14 261      11 847
                           Gold         oz           38           64       228         179
                           Rhodium      oz          778      1   308     4 743       3 865
                           Ruthenium    oz      1   228      2   030     7 135       6 070
                           Iridium      oz          207          332     1 195         996
                           Total PGMs   oz      9   687     16   164    58 188      48 199
                           Nickel8      MT            9           14        47          41
                           Copper8      MT            5            7          25          23
             Concentrate   Platinum     oz          905            -     2   802           -
             purchases     Palladium    oz          329            -         973           -
                           Gold         oz            4            -          10           -
                           Rhodium      oz          104            -         329           -
                           Ruthenium    oz          132            -         404           -
                           Iridium      oz           39            -         129           -
                           Total PGMs   oz      1   513            -     4   647           -
                           Nickel       MT            0            -           2           -
                           Copper       MT            0            -           2           -
             Lonmin        Platinum     oz    108   795    200   315   679   821   719   390
             Platinum      Palladium    oz     50   382     93   669   310   643   336   502
                           Gold         oz      2   772      4   526    17   163    17   650
                           Rhodium      oz     14   146     27   044    88   216    95   524
                           Ruthenium    oz     22   892     42   144   134   808   150   439
                           Iridium      oz      4   934      8   974    28   934    32   290
                                                                         1   259     1   351
                           Total PGMs   oz    203 921      376 673
                                                                             585         796
                           Nickel8      MT          564          943     3   489     3   537
                           Copper8      MT          358          581     2   226     2   223
                                             3 months     3 months          12          12
                                                                        months      months
                                                to 30        to 30       to 30       to 30
                                                  Sep          Sep         Sep         Sep
                                                 2012         2011        2012        2011
Refined      Lonmin        Platinum     oz    178 158      239 878     648 414     686 877
production   Refined       Palladium    oz     89 857      109 435     310 558     323 907
             Metal
                           Gold         oz      5 006        7 058      18 398      18 013
             Production
                           Rhodium      oz     44 096       33 617     110 896      86 702
                           Ruthenium    oz     38 675       54 785     153 394     164 374
                           Iridium      oz      8 475       11 285      32 844      26 337
                                                                         1 274       1 306
                           Total PGMs   oz    364 269      456 057
                                                                           503         210
             Toll          Platinum     oz     18 021        7 731      38 958      44 396
             Refined       Palladium    oz      8 564           35      21 043      49 119
             Metal
                           Gold         oz         48            -         729       2 879
             Production
                           Rhodium      oz        263          380       4 717      14 402
                           Ruthenium    oz      4 224            -       7 907      24 408
                           Iridium      oz        939           72       1 944       5 249
                           Total PGMs   oz     32 058        8 218      75 299     140 453
             Total         Platinum     oz    196 179      247 609     687 372     731 273
             Refined       Palladium    oz     98 421      109 470     331 601     373 026
             PGMs
                           Gold         oz      5 054        7 058      19 128      20 892
                           Rhodium      oz     44 359       33 997     115 613     101 103
                           Ruthenium    oz     42 900       54 785     161 300     188 782
                           Iridium      oz      9 414       11 357      34 788      31 586
                                                                         1 349       1 446
                           Total PGMs   oz    396 327      464 275
                                                                           802         662
             Base Metals   Nickel9      MT          921      1 162       3 786       4 188
                                    9
                           Copper       MT          531          679     2 153       2 454

Sales        Refined       Platinum     oz    233   054    241   979   701   831   720   783
             Metal Sales   Palladium    oz    121   096    118   181   335   849   372   284
                           Gold         oz      5   262      6   968    19   273    19   417
                           Rhodium      oz     53   534     33   300   119   054   102   653
                           Ruthenium    oz     51   887     52   408   170   751   187   189
                           Iridium      oz     11   271      9   400    37   187    33   603
                                                                         1   383     1   435
                           Total PGMs   oz    476 104      462 235
                                                                             945         929
             Concentrate   Platinum     oz            -            -           -           -
             and Other10   Palladium    oz            -            -           -           -
                           Gold         oz            -            -           -           -
                           Rhodium      oz            -            -           -           -
                           Ruthenium    oz            -            -           -           -
                           Iridium      oz            -            -           -           -
                           Total PGMs   oz            -            -           -           -
             Lonmin        Platinum     oz    233   054    241   979   701   831   720   783
             Platinum      Palladium    oz    121   096    118   181   335   849   372   284
                           Gold         oz      5   262      6   968    19   273    19   417
                           Rhodium      oz     53   534     33   300   119   054   102   653
                           Ruthenium    oz     51   887     52   408   170   751   187   189
                           Iridium      oz     11   271      9   400    37   187    33   603
                                                                         1   383     1   435
                           Total PGMs   oz    476 104      462 235
                                                                             945         929
                           Nickel9      MT      1 074        1 179       3   843     4   180
                                    9
                           Copper       MT          724          885     2 197       2 448
                                    9                                    1 209
                           Chrome       MT    287 165      314 924                 730 278
                                                                           643
                                                      3 months      3 months          12          12
                                                                                  months      months
                                                            to 30      to 30       to 30       to 30
                                                              Sep        Sep         Sep         Sep
                                                             2012       2011        2012        2011
Average      Platinum                       $/oz            1 477      1 762       1 517       1 769
prices       Palladium                      $/oz              603        747         630         752
             Gold                           $/oz            1 526      1 688       1 597       1 405
             Rhodium                        $/oz            1 106      1 842       1 274       2 145
             Ruthenium                      $/oz              100        162         103         168
             Iridium                        $/oz            1 033      1 041       1 042         938
             $ basket excl.   by-product
                                            $/oz            1 053      1 311       1 095       1 299
             revenue11
             $ basket incl.   by-product
                                            $/oz            1 103      1 389       1 163       1 389
             revenue12
             R basket excl.   by-product
                                            R/oz            8 674      9 434       8 807       9 109
             revenue11
             R basket incl.   by-product
                                            R/oz            9 031      9 942       9 304       9 716
             revenue12
             Nickel9                        $/MT        11 866        18 299      14 330      21 009
             Copper9                        $/MT         6 948         8 308       7 201       8 612
             Chrome9                        $/MT            21            23          20          27

Exchange     Average rate for period13      R/$              8.24       7.16        8.05        6.95
Rates        Closing rate                   R/$              8.30       8.05        8.30        8.05

Notes:

1    Karee includes the shafts K3, 1B, 4B and K4. Westerns comprises Rowland, Newman and ore
     purchases from W1. Middelkraal represents Hossy and Saffy. Easterns includes E1, E2 and E3.
2    Pandora attributable tonnes mined represents Lonmin's share (42.5%) of the total tonnes mined
     on the Pandora joint venture.
3    Tonnes milled excludes slag milling.
4    Lonmin purchases 100% of the ore produced by the Pandora joint venture for onward processing
     which is included in downstream operating statistics.
5    Head grade is the grammes per tonne (5PGE + Au) value contained in the tonnes milled and fed
     into the concentrator from the mines (excludes slag milled).
6    Recovery rate in the concentrators is the total content produced divided by the total content
     milled (excluding slag).
7    Metals in concentrate include metal derived from slag processing and have been calculated at
     industry standard downstream processing losses to present produced saleable ounces.
8    Corresponds to contained base metals in concentrate.
9    Nickel is produced and sold as nickel sulphate crystals or solution and the volumes shown
     correspond to contained metal. Copper is produced as refined product but typically at LME
     grade C. Chrome is produced in the form of chromite concentrate and volumes shown are in the
     form of chromite.
10   Concentrate and other sales have been adjusted to a saleable ounce basis using industry
     standard recovery rates.
11   Basket price of PGMs is based on the revenue generated in Rand and Dollar from the actual
     PGMs (5PGE + Au) sold in the period based on the appropriate Rand / Dollar exchange rate
     applicable for each sales transaction.
12   As per note 11 but including revenue from base metals.
13   Exchange rates are calculated using the market average daily closing rate over the course of
     the period.

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