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LONMIN PLC - Third Quarter 2014 Production Report & Interim Management Statement

Release Date: 25/07/2014 08:00
Code(s): LON     PDF:  
Wrap Text
Third Quarter 2014 Production Report & Interim Management Statement

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")

REGULATORY RELEASE


25 July 2014

Third Quarter 2014 Production Report & Interim Management Statement

Lonmin Plc (“Lonmin” or “the Company”), today announces its production results for the three months to 30 June 2014
(unaudited) and Interim Management Statement for the period from 1 April 2014 to today’s date. It is important to note that
there was an industrial dispute throughout the period and consequently no meaningful production. The strike ended with a
wage agreement signed on 24 June 2014.

Highlights

Employees returned to work, ramp up to full production at all shafts has started. We are making steady progress
    - Good stable attendance with near normal levels of around 90% of our employees
    - Compared to FY2013 , wage settlement results in an overall increase of 12.9% in the Company’s labour costs for
        FY2014, 8.8% for FY2015 and 8.2% for FY2016
    - Special costs of $322 million incurred to date, mainly as a result of idle production during the strike, and security costs.
        We expect further special costs associated with the ramp up in quarter four, as operations will not have reached full
        capacity
Third quarter production severely impacted by the unprecedented five month strike
    - Re-start of the Processing Division in May, enabled achievement of Platinum metal in concentrate of 23,618 ounces, in
        June and 36,255 refined Platinum ounces
    - Strike impact in mining of around 192,700 Platinum saleable ounces
Nine months performance cumulatively impacted
    - Platinum metal in concentrate and sales of 238,735 ounces and 289,414 ounces, down 56.8% and 29.0% respectively
    - Strike loss in mining of around 348,400 saleable Platinum ounces
Mining ramp up
    - Successfully completed the medicals within three weeks. Ramp up commenced in second week of July
    - Immediately available ore reserves and disciplined approach to monitoring and securing the operations during the
        strike positions the Company well for re-start of operations
    - All shafts are re-starting, to optimise the good team working ethos already established pre the strike and maximise on
        safe production output
    - We are currently achieving around 30.0% of normal monthly production and we expect to be achieving 80.0% of
        normal monthly production by the end of the FY2014 and to be at the normal steady rate of production during Q12015
Funding
    - Net cash of nil at 30 June 2014
    - Decisive cash conservation measures to minimise cash burn continued into quarter three
    - Significant headroom available in our banking facilities to fund the production ramp up, and re-build the stock pipeline
        over the coming months
    - It is our expectation that we will repay the drawn facilities to the extent of surplus cash in quarter four of FY2014
Guidance for 2014
    - Platinum metal in concentrate (MIC) production anticipated to be around 340,000 ounces
    - Revising sales guidance to 420,000 saleable Platinum ounces for the year
    - Unit cost per PGM ounce year on year increase expected to be in excess of 60.0% including the special costs, as a result
        of severely impacted production
    - Capex guidance revised down from $210 million to around $100 million for the year




                                                                1
Lonmin Chief Executive Ben Magara said: “Ramp up to full production has started and we are making good and steady progress
in terms of our plans to return to full production. We are experiencing stable attendance levels by our employees across all
operations since the end of the strike. Our immediate focus is on ensuring a safe and productive ramp up. I am pleased with the
enthusiasm in our management and all employees to the re-building of our relationships and operational credibility. Our existing
banking facilities are more than adequate to cover the costs of the strike and the ramp up. We are also assessing our medium to
long-term options around improving the productivity and profitability of our business including cost reduction.”

Ramp Up

On 25 June 2014, around 85.0% of Lonmin employees immediately returned to work following the signing of the wage
agreement with the Association of Mineworkers and Construction Union (“AMCU”) on 24 June. The return to work signalled the
end of a five month strike, during which time the vast majority of Lonmin’s Marikana assets were not operational. The initial
focus of the Company has been to ensure a safe resumption of production with the first steps being to carry out medical
examinations and safety inductions on employees. In the four weeks since the end of the strike, all medical examinations have
been performed at Lonmin’s health centres. Whilst the majority of employees passed their medical tests, a higher than normal
failure rate of around 8.0% was noted, resulting mainly from untreated chronic illnesses and nutrition concerns during the strike
period. Most of these employees have regained fitness since they re-started treatment and their wellness improved as a result
of food parcels and nutritional supplements provided by Lonmin. The attendance level has stabilised at around 90.0%.

Whilst careful planning allowed us to secure the integrity of our operations ahead of the strike, safety is a priority in everything
we do and as such since the end of the strike we have adopted a cautious approach and have carried out a full inspection of our
operations and work areas for stability and readiness to operate in order to ensure a safe ramp up as we re-start. This measured
approach, combined with the healthy available ore reserve position which stood at 3.7 million centares at 31 March 2014 should
benefit us in the longer term. Our first normal mine shift pattern and blasting occurred on the second week of July. As of the
date of this announcement, all eleven shafts are back to production. Given the prolonged period of the strike, our ramp up will
take some time. We are currently achieving around 30.0% of normal monthly production and we expect to be achieving 80.0%
of normal monthly production by the end of the FY2014 and to be back at the normal steady rate of production during Q12015.
Four of our concentrators are now in production, with three of these having resumed production in late May for the processing
of stockpile arising from the opencast and contract mined operations. The Number Two furnace has consequently been fully
operational whilst the Number One furnace reheating started in the second week of July. The Base Metals Refinery and the
Precious Metals Refinery have been operating well since late May.

Funding

Our unaudited net cash as at 30 June 2014 was nil, being comprised of gross debt of $586 million drawn under the ZAR and USD
facilities and surplus cash of $586 million. This compares to $71 million cash position we had at the end of 31 March 2014 and
reflects the series of cash conservation measures we instituted during the strike period and the continued reduction in cash
outflows whilst maintaining the integrity of the operations as the strike progressed into quarter three as well as some proceeds
from sales arising from the drawdown of the pipeline. We will however require increased working capital during the ramping up
process. The Company has significant headroom available in its banking facilities to fund the debt levels which will rise as we
fund the production ramp up, and re-build the stock pipeline over the coming months. It is our expectation that we will repay
the drawn facilities to the extent of surplus cash in quarter four.

Customer Relationships

As we have resumed production and metal is processed through the pipeline we are resuming deliveries to our customers. As
we have not yet reached normal production levels we have accordingly not lifted force majeure. However, we remain in contact
with our customers and are grateful for their continued support.

Third Quarter Safety and Production Overview

The rolling 12 month average Lost Time Injury Frequency Rate (LTIFR) for the 12 months to 30 June 2014 improved to 2.76
incidents per million man hours compared to 3.61 at 30 June 2013 and reflects the reduced hours of work as a result of the
strike.

Our operational performance in the third quarter was impacted by the continuation of the AMCU led protected strike action into
this quarter as around 82.0% of Lonmin’s mining employees are members of AMCU. As a result production was mainly limited to
our contractor operated shafts and the opencast. This led to a loss in production on our mining operations including Pandora
and joint venture operations of 3.1 million tonnes of ore containing an estimated 192,700 saleable Platinum ounces.

                                                                 2
Mining Division
Our Marikana underground mining operations produced 0.2 million tonnes during the third quarter, a decrease of 2.5 million
tonnes or 92.3% on the prior year period as a consequence of the strike.

Production from our Merensky opencast operations was 38.2% lower than the prior year period, at 78,000 tonnes whilst
Pandora (100%) production decreased by 132,000 tonnes, or 89.2% on the prior year period.

Process Division
In anticipation of an imminent end to the strike, we re-started three of our concentrators during May 2014 in order to process
the remaining material in the pipeline and the ore from the producing operations. As a result we milled 0.4 million tonnes during
the quarter, down 2.6 million tonnes on the prior year period or 86.3%. Underground milled head grade of that production
decreased by 11.6% to 4.06 grammes per tonne (5PGE+Au) when compared to 4.60 grammes per tonne in the prior year period
due to ore mix and lower opencast grade. Overall milled head grade of 3.92 grammes per tonne, was impacted by the skewed
ratio of opencast to underground ore and was down 13.6% on the prior year period.

Underground and overall concentrator recoveries for the quarter were also impacted by ore mix. Underground recoveries
decreased by 4.6 percentage points to 82.1% when compared to the prior year period.

Total PGMs and Platinum MIC for the quarter at 43,015 and 23,618 saleable ounces respectively were 87.7% and 87.3% lower
than the prior year period due to the continued shut down of the plant until late May when three concentrators resumed
production.

Total refined production for the third quarter at 36,255 ounces of saleable Platinum was down 67.4% when compared against
the prior year period. Total PGMs produced in the third quarter were 82,515 ounces, a decrease of 63.0% on the prior year
period.

Sales & Pricing
Sales for the third quarter were 25,740 Platinum ounces and 79,691 PGM ounces with Platinum sales being 68.4% lower than
the prior year period. The lower sales were a result of the Process operations being shut down under controlled conditions
during the strike period to mitigate security risks identified as we entered the strike. In anticipation of an end to the strike our
Process operations were re-started in mid-May to process the remaining stocks. The US dollar basket price (excluding by-
product revenue) at $908 per ounce during the quarter was down 7.0% on the prior year period largely due to the mix of metals
sold while the corresponding Rand basket price at R9,535 per ounce, was 3.4% higher than the prior year period on the back of
Rand weakness.

Nine Month Production Overview

Total tonnes mined (100%) during the first nine months of the 2014 financial year were 3.6 million tonnes, a decrease of 5.2
million tonnes from 2013, due to the five month long AMCU led legal strike. During the nine month period, we mined 3.2 million
tonnes from the Marikana underground operations, a decline of 60.0% when compared against the same period in 2013. The
impact of the Section 54 safety stoppages and labour related disruption has been a loss of 268,000 tonnes, compared to 414,000
tonnes in the prior year period, which included an element of ramp up losses occurred in quarter one 2013 arising from the
FY2012 strikes. The strike has been the single most significant event, resulting in a loss of 5.6 million tonnes of ore containing
around 348,000 equivalent saleable Platinum ounces.

Total tonnes milled during the nine months of the 2014 financial year decreased by 56.5% to 3.8 million tonnes when compared
to the prior year period. The total head grade declined by 0.11 grammes per tonne to 4.44 grammes per tonne or 2.5% lower
than the prior year period.

Underground and overall recoveries marginally improved in the nine month period to 87.4% and 87.2% respectively when
compared to 86.8% and 86.7% respectively in the prior year period.

Platinum MIC decreased by 56.8% or 313,780 ounces to 238,735 saleable ounces of Platinum in the nine months under review,
due to lower mined production.

Total refined production in the nine month period was 293,472 Platinum ounces and 625,694 PGM ounces, a decrease of 32.9%
and 25.8% respectively compared to the prior year period.



                                                                 3
Sales for the nine month period were 29.0% lower at 289,414 ounces of Platinum and 627,104 PGM ounces were down 19.9%
on the comparable prior year period.

The US dollar basket price (excluding by-product revenue) at $988 during the nine months of the 2014 financial year was 12.4%
lower than the prior year period, mainly due to the mix of metals sold during the period and depressed US dollar prices. The
corresponding Rand basket price excluding base metal revenue was 2.2% higher than in the prior year period at R10,340 per
ounce.

Wage Negotiations and Employee Relations

The strike had a huge impact not only on our operations but on our employees, suppliers, service providers and the
communities where we operate. The three year wage agreement hopefully provides for stability and the embedding of
constructive relationships with employees and unions. To date, the strike has cost the Company $322 million as a result of idle
production costs, security costs and forfeited service with contractors and further costs associated with the ramp up will be
incurred in the fourth quarter. The impact on our stakeholders has been equally significant.

Impact of the Wage Agreement
Taking into account the backdating of the agreement to 1 October 2013, the effect of the wage agreement is an overall 12.9%
increase in salaries and wages for fiscal year 2014 or 10.9% on an annualised basis. Going forward, the Company has agreed to
alter the anniversary date of its annual wage increase to 1 July from 1 October in order to align with industry peers. For Year 2
and Year 3 the figures are for calendar 12 months. Fiscal year 2 will be an overall 8.8% increase whilst fiscal year 3 will be an
overall 8.2% increase. All comparisons are on the basis of FY2013 actual figures.

Re-building Relationships
We have worked hard across the five initiatives set for the Company by the Board: employee relations, empowerment, migrant
and local labour, better use of invested capital infrastructure and housing and accommodation. We are pleased that progress
has been made in many areas but there is still much for us to do. We are making concerted efforts to re-build and improve the
relationships we had established with our employees and communities. As part of that process, we are reviewing how we can
work better together. This includes revisiting the work we have been doing around our culture and as part of that we are in the
process of creating Lonmin interest groups. We expect that our work around the Employee Share Ownership Plan, Community
and Bapo transactions, as part of our Black Economic Empowerment equity transaction, will contribute towards better
alignment of all stakeholders and of employees as beneficiaries and economic participants of the success and failure of the
Company.

Whilst we acknowledge that there will always be areas which are within our control where collaboration to help alleviate the
historical social disconnect that has dogged the mining industry are concerned, some issues go beyond the Company’s sole
control and require a joint approach and a structural shift in mind set and framework more widely. The collaborative approach
adopted by the producers during the strike showed that this is possible. We are also pleased to note that our partnership efforts
with government are also gaining traction around the building of housing for Lonmin employees and communities as building on
the land donated by Lonmin in October 2013 has now started. The South African government has contributed R492 million to
this project.

Outlook and Guidance

We expect the production of saleable Platinum metal in concentrate to be around 340,000 ounces for the 2014 financial year
(2013: 751,000 ounces). We expect to achieve Platinum sales for the financial year of around 420,000 ounces from this
production and the partial depletion of pipeline stocks during the third quarter. We expect to re-build the depleted pipeline of
stock in FY2015. We anticipate unit costs per PGM ounce to increase in excess of 60%, including the special costs for the 2014
financial year as a result of the severely impacted production and are revising our capex guidance down to $100 million for the
year. We will provide guidance for the FY2015 with our preliminary results.

                                                            - ENDS -




                                                               4
ENQUIRIES

Investors / Analysts:
Lonmin
Tanya Chikanza (Head of Investor Relations)            +27 11 218 8358 / +44 20 7201 6007
Floyd Sibandze (Investor Relations Manager)            +27 11 218 8381

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

Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd

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 producing assets are situated in the Bushveld Igneous 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. 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




                                                             5
                                                               3 months     3 months     9 months     9 months
                                                              to 30 June   to 30 June   to 30 June   to 30 June
                                                                    2014         2013         2014         2013
Tonnes    Marikana1             K3 shaft             kt              35          729          806        2,250
mined
                                K4 shaft             kt                -            -            -           4
                                4B/1B shaft          kt               8          458          488        1,356
                                Karee                kt              43        1,187        1,294        3,610
                                Rowland shaft        kt               3          414          556        1,281
                                Newman shaft         kt               2          228          241          704
                                Hossy shaft          kt              18          254          313          745
                                W1 shaft             kt              14           47           68          120
                                Westerns             kt              37          943        1,177        2,850
                                Saffy shaft          kt              48          325          436          851
                                East 1 shaft         kt              15          101           72          300
                                East 2 shaft         kt              57          116          192          298
                                East 3 shaft         kt               5           24           17           71
                                Easterns             kt             126          567          717        1,520
                                Underground          kt             206        2,696        3,188        7,980
                                Opencast             kt              78          127          233          414
                                Total                kt             285        2,823        3,421        8,394
          Pandora (100%)2       Underground          kt              16          149          172          411
          Limpopo3              Underground          kt              (3)            -           6             -
                                Total Tonnes mined
          Lonmin (100%)                              kt             298        2,971        3,599        8,805
                                (100%)
                                % mined from UG2     %            70.7%        74.7%        74.1%        73.7%
                                reef (100%)
          Lonmin                Underground &
                                                     kt             289        2,886        3,500        8,569
          (attributable)        Opencast
Ounces
          Lonmin exc. Pandora   Pt ounces            oz          15,435      175,113      214,319      525,606
mined4
          Pandora (100%)        Pt ounces            oz              724      10,813       12,097       29,678
          Limpopo               Pt ounces            oz            (104)           -          255            -
          Lonmin                Pt ounces            oz          16,055      185,925      226,671      555,283


          Lonmin exc. Pandora   PGM ounces           oz          29,190      328,310      409,746      979,193
          Pandora (100%)        PGM ounces           oz           1,416       20,770       23,782       56,707
          Limpopo               PGM ounces           oz           (232)            -          572            -
          Lonmin                PGM ounces           oz          30,374      349,080      434,100     1,035,900
Tonnes
          Marikana              Underground          kt             287        2,706        3,269        7,944
milled5
                                Opencast             kt              97          106          306          319
                                Total                kt             383        2,812        3,574        8,263
          Pandora6              Underground          kt              21          149          172          414
          Limpopo               Underground          kt                -            -          27             -
          Lonmin Platinum       Underground          kt             307        2,854        3,468        8,358
                                Head grade7          g/t            4.06         4.60         4.55         4.62
                                Recovery rate8       %            82.1%        86.6%        87.4%        86.8%
                                Opencast             kt               97          106          305          319
                                Head grade7          g/t            3.47         2.91         3.22         2.92
                                Recovery rate8       %            84.2%        85.4%        84.3%        85.4%
                                Total                kt              404        2,961        3,773        8,677
                                Head grade7          g/t            3.92         4.54         4.44         4.56
                                Recovery rate8       %            82.5%        86.6%        87.2%        86.7%




                                                          6
                                                          3 months     3 months     9 months     9 months
                                                         to 30 June   to 30 June   to 30 June   to 30 June
                                                              2014         2013         2014         2013
Metals in      Marikana          Platinum       oz          21,053      174,598      222,419      519,681
concentrate9
                                 Palladium      oz           9,649       80,588      103,085      236,676
                                 Gold           oz             923        4,346        5,817       13,165
                                 Rhodium        oz           2,295       24,085       31,330       69,592
                                 Ruthenium      oz           3,936       35,843       50,969      105,975
                                 Iridium        oz             809        8,134       10,480       24,258
                                 Total PGMs     oz          38,664      327,593      424,098      969,347
                                        10
                                 Nickel         MT             199          944        1,239        2,700
                                 Copper10       MT             121          562          788        1 691
               Limpopo           Platinum       oz                -            -       1 121             -
                                 Palladium      oz                -            -         974             -
                                 Gold           oz                -            -          93             -
                                 Rhodium        oz                -            -         114             -
                                 Ruthenium      oz                -            -         161             -
                                 Iridium        oz                -            -          44             -
                                 Total PGMs     oz                -            -       2,508             -
                                        10
                                 Nickel         MT                -            -          27             -
                                 Copper10       MT                -            -          19             -
               Pandora           Platinum       oz             868       10,808       11,857       29,904
                                 Palladium      oz             396        5,089        5,599       13,845
                                 Gold           oz               3           86           77          229
                                 Rhodium        oz             142        1,758        2,009        4,751
                                 Ruthenium      oz             234        2,559        3,209        7,097
                                 Iridium        oz              40          457          528        1,294
                                 Total PGMs     oz           1,685       20,759       23,279       57,119
                                        10
                                 Nickel         MT               1           38           21           70
                                 Copper10       MT               1           10           12           29
               Concentrate       Platinum       oz           1,696        1,050        3,338        2,930
               purchases         Palladium      oz             460          312          941          860
                                 Gold           oz               6            4           15           10
                                 Rhodium        oz             207          127          405          313
                                 Ruthenium      oz             212          126          424          323
                                 Iridium        oz              85           48          176          127
                                 Total PGMs     oz           2,666        1,666        5,300        4,562
                                        10
                                 Nickel         MT               1             -           1            1
                                 Copper10       MT                -            -           1            1
               Lonmin Platinum   Platinum       oz          23,618      186,456      238,735      552,515
                                 Palladium      oz          10,504       85,989      110,600      251,381
                                 Gold           oz             933        4,436        6,002       13,404
                                 Rhodium        oz           2,644       25,970       33,858       74,656
                                 Ruthenium      oz           4,382       38,528       54,762      113,394
                                 Iridium        oz             934        8,639       11,229       25,679
                                 Total PGMs     oz          43,015      350,018      455,185     1,031,029
                                 Nickel10       MT             201          983        1,288        2,772
                                           10
                                 Copper         MT             122          573          821        1,721




                                                     7
                                                              3 months     3 months     9 months     9 months
                                                             to 30 June   to 30 June   to 30 June   to 30 June
                                                                  2014         2013         2014         2013
Refined      Lonmin refined        Platinum         oz          34,319      111,173      290,984      435,893
production   metal production
                                   Palladium        oz          15,309       50,973      143,592      196,937
                                   Gold             oz           1,501        2,546        7,861       11,595
                                   Rhodium          oz           6,852       21,727       69,805       57,473
                                   Ruthenium        oz           9,724       26,884       71,711      109,070
                                   Iridium          oz           8,174        8,928       26,991       21,782
                                   Total PGMs       oz          75,879      222,230      610,944      832,749
             Toll refined          Platinum         oz           1,936             -       2,488        1,364
             metal production
                                   Palladium        oz             513          350        1,523          662
                                   Gold             oz              27           15          100          286
                                   Rhodium          oz             443          120        1,339        1,837
                                   Ruthenium        oz           2,935             -       7,417        5,185
                                   Iridium          oz             782             -       1,884          913
                                   Total PGMs       oz           6,637          485       14,751       10,247
             Total refined PGMs    Platinum         oz          36,255      111,173      293,472      437,257
                                   Palladium        oz          15,822       51,323      145,115      197,599
                                   Gold             oz           1,528        2,561        7,961       11,882
                                   Rhodium          oz           7,296       21,847       71,144       59,310
                                   Ruthenium        oz          12,659       26,884       79,128      114,256
                                   Iridium          oz           8,956        8,928       28,874       22,694
                                   Total PGMs       oz          82,515      222,715      625,694      842,997
             Base metals           Nickel 11
                                                    MT             218          658        1,530        2,309
                                             11
                                   Copper           MT             106          362          871        1,392

Sales        Refined metal Sales   Platinum         oz          25,740       81,382      289,414      407,523
                                   Palladium        oz          10,879       49,304      147,452      190,079
                                   Gold             oz                -       4,200        6,500       12,537
                                   Rhodium          oz          19,027       19,048       73,020       52,517
                                   Ruthenium        oz          16,471       33,238       83,300       99,655
                                   Iridium          oz           7,575        8,827       27,418       20,441
                                   Total PGMs       oz          79,691      195,999      627,104      782,752
                                          11
                                   Nickel           MT              75          652        1,413        2,339
                                             11
                                   Copper           MT                -         262          804        1,285
                                               11
                                   Chrome           MT                -     359,391      505,101     1,010,401




                                                         8
                                                                                3 months          3 months             9 months        9 months
                                                                               to 30 June        to 30 June           to 30 June      to 30 June
                                                                                      2014             2013                   2014         2013
Average           Platinum                                      $/oz                 1,451            1,450                   1,405       1,568
prices
                  Palladium                                     $/oz                   825              716                    742          713
                  Gold                                          $/oz                      -           1,510                   1,510       1,523
                  Rhodium                                       $/oz                 1,083            1,083                   1,024       1,155
                  Ruthenium                                     $/oz                    64               77                     56           76
                  Iridium                                       $/oz                   575              968                    514          989
                                                      12
                  $ basket excl. by-product revenue             $/oz                   908              976                    988        1,127
                                                      13
                  $ basket incl. by-product revenue             $/oz                   923            1,067                   1,039       1,206
                                                       12
                  R basket excl. by-product revenue             R/oz                 9,535            9,224                  10,340      10,113
                                                      13
                  R basket incl. by-product revenue             R/oz                 9,694           10,033                  10,877      10,788
                         11
                  Nickel                                        $/MT                14,522           12,042                  11,729      13,587
                            11
                  Copper                                        $/MT                      -           6,634                   6,890       7,301
                              11
                  Chrome                                        $/MT                      -              22                     19           20


Exchange
                  Average rate for period14                    R/$                   10.51              9.44                  10.48         9.01
rates
                  Closing rate                                 R/$                   10.64              9.83                  10.64         9.83

Notes:

1   Following the management restructuring in 2013 the mining structure was reconfigured into three divisions and we now report
    production on a shaft by shaft basis.

2   Pandora underground tonnes mined represents 100% of the total tonnes mined on the Pandora joint venture of which 42.5% is
    attributable to Lonmin.

3   Limpopo underground tonnes mined represents low grade development tonnes mined whilst on care and maintenance.

4   Ounces mined have been calculated at achieved concentrator recoveries and as from 2014 with Lonmin standard downstream
    processing recoveries to present produced saleable ounces.

5   Tonnes milled excludes slag milling.

6   Lonmin purchases 100% of the ore produced by the Pandora joint venture for onward processing which is included in downstream
    operating statistics.

7   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).

8   Recovery rate in the concentrators is the total content produced divided by the total content milled (excluding slag).

9   Metals in concentrate include metal derived from slag processing and as from 2014 have been calculated at Lonmin standard
    downstream processing recoveries to present produced saleable ounces.

10 Corresponds to contained base metals in concentrate.

11 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.

12 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.

13 As per note 12 but including revenue from base metals.

14 Exchange rates are calculated using the market average daily closing rate over the course of the period.




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