Trading statement in respect of the financial year ended 30 June 2017 African Rainbow Minerals Limited (Incorporated in the Republic of South Africa) (Registration number 1933/004580/06) JSE Share code: ARI ISIN: ZAE000054045 (“ARM” or the “Company”) Trading statement in respect of the financial year ended 30 June 2017 In terms of paragraph 3.4(b) of the Listings Requirements of the JSE Limited, a listed company is required to publish a trading statement as soon as it is satisfied that a reasonable degree of certainty exists that the financial results for the period to be reported on next will differ by at least 20% from those of the previous corresponding period. ARM’s headline earnings for the financial year ended 30 June 2017 (F2017) have been positively affected by an increase in the average US Dollar commodity prices realised for all of the commodities which ARM produces, which was partly offset by the negative impact of a stronger average Rand/US Dollar exchange rate. Cost containment initiatives throughout the year have yielded positive results, with most operations achieving unit production cost increases that are either at or lower than inflation. A provision has been raised for a possible settlement of the silicosis and tuberculosis class action claims and related costs of R330 million (see further details below). Headline earnings per share for F2017 are expected to increase by between 229% and 245% compared to the previous corresponding financial year (F2016) to between 1 625 and 1 702 cents (F2016: 1 494 cents) based on a weighted average number of shares of 189 768 000 (F2016: 212 990 000). ARM’s F2017 basic earnings are expected to be impacted mainly by: attributable impairment previously reported in the interim results for the six months ended 31 December 2016 (1H F2017) of the Nkomati Mine assets of R711 million after tax; attributable impairment previously reported in 1H F2017 of the Modikwa Mine assets of R734 million after tax and non-controlling interest; and an attributable partial impairment reversal of the Lubambe Mine assets of R144 million after non-controlling interest following the classification of Lubambe Mine as an operation held for sale. Basic earnings per share are therefore expected to increase to a basic earnings per share of between 695 and 745 cents (F2016: 265 cents loss). Lubambe Copper Mine Lubambe Mine will be classified as held for sale at 30 June 2017 and will be disclosed as a discontinuing operation in terms of International Financial Reporting Standards. Silicosis and tuberculosis class action provision In November 2014, a gold mining industry working group was formed to address issues relating to the compensation and medical care for occupational lung diseases in the gold mining industry in South Africa. The working group comprises ARM, Harmony Gold Mining Company Limited, Anglo American South Africa Limited, AngloGold 2 Ashanti Limited, Gold Fields Limited and Sibanye Gold Limited (collectively “the Working Group”). The Working Group engaged different stakeholders including government, organised labour, other mining companies and legal representatives of claimants who have filed legal suits against the companies. These engagements have sought a comprehensive solution to address legacy compensation issues and future legal frameworks that are fair to past and current employees and enable companies to continue to be sustainable over the long-term. As a consequence of the progress of negotiations between the Working Group and affected stakeholders, the Company is now in a position to reliably estimate, within an acceptable range, the Company’s share of a possible settlement of the class action claims and related costs. As a result, ARM has recorded a provision of R330 million (discounted) in the results for the year ended 30 June 2017. The nominal amount of the provision is R417 million. The companies do not believe that they are liable in respect of the claims brought, and are defending these. The Working Group is appealing the ruling, which matter has been set for hearing from 19 to 23 March 2018. They do, however, believe that they should work together to seek a solution to this South African mining industry legacy issue. The negotiations with the claimants’ lawyers are confidential and the Working Group companies are accordingly not able to provide any details of the negotiations. The financial information on which this trading statement is based has neither been reviewed nor reported on by the external auditors of ARM. 3 The Company’s F2017 provisional financial results will be released on 7 September 2017. ENDS For all investor relations queries please contact: Jongisa Magagula Corporate Development and Head of Investor Relations Tel: +27 11 779 1507 E-mail: jongisa.magagula@arm.co.za Johannesburg 21 August 2017 Sponsor: Deutsche Securities (SA) Proprietary Limited 4 Date: 21/08/2017 04:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. 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