Wrap Text
Fourth Quarter and Full Year 2017 Production Report and Business Update
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 : GB00BYSRJ698
("Lonmin")
LEI No: 213800FGJZ2WAC6Y2L94
REGULATORY RELEASE
3 November 2017
Fourth Quarter and Full Year 2017 Production Report and Business Update
Lonmin Plc (“Lonmin” or “the Company”), one of the world’s largest primary platinum producers, today
announces its production results for the three and twelve months to 30 September 2017 (unaudited)
and includes a business update.
Overview
- Fatality free quarter and the twelve-month rolling LTIFR to 30 September improved by 9.1% to 4.52
per million man hours.
- Net Cash improved again to $103 million at 30 September, up from $86 million at 30 June and $75
million at 31 March.
- Mining performance improvement has been sustained from March 2017. Tonnes mined by our
Generation 2 shafts increased for the fourth quarter by 7.5% to 2.3 million tonnes compared with
the fourth quarter of 2016, providing a 2.3% improvement for the year to 8.3 million tonnes for the
year.
? The three core Generation 3 shafts, K3, Rowland and Saffy up 13.4% for the fourth quarter
? K3 up 20.3% for the fourth quarter and the August production of 293,000 tonnes was the highest
since 2013
? Saffy’s fourth quarter production was the highest in its history
? Rowland’s third quarter production was the highest since 2011
- Sales of 218,687 Platinum ounces for the fourth quarter increased by 3.6% on the fourth quarter of
2016. This enabled us to achieve Platinum sales of 706,030 ounces for the year, exceeding our
guidance of between 650,000 and 680,000 Platinum ounces.
- Average Rand full basket price for the fourth quarter down 8.7% on the fourth quarter of 2016, at
R11,567 per PGM ounce on the back of a stronger rand.
- Our unit costs for the fourth quarter were R11,524 per PGM ounce (6E basis), an increase of 4.3% on
the fourth quarter of 2016, and an increase of 8.9 % for the 12 months to R11,701 per PGM ounce,
within our revised unit cost guidance of between R11,300 and R11,800 per PGM ounce.
- Lonmin announces today an update on the Operational Review process and the reasons that its
financial results for the year ended 30 September 2017, which were previously expected to be
announced on 13 November 2017, will be delayed.
3 months 3 months % 12 months 12 months %
Increas Increas
to 30 Sep to 30 Sep e/ to 30 Sep to 30 Sep e/
(decrea (decrea
2017 2016 se) 2017 2016 se)
Tonnes Generation 2 K3 Shaft kt 852 708 20.3% 2 831 2 687 5.4%
Mined Rowland
Shaft kt 520 487 6.9% 1 925 1 731 11.2%
Saffy Shaft
kt 604 547 10.3% 2 174 2 055 5.8%
Total Core Generation 2 1 976 1 742 13.4% 6 930 6 473 7.1%
- -
4B Shaft kt 324 397 18.3% 1 320 1 588 16.9%
Total Generation 2 kt 2 300 2 139 7.5% 8 250 8 061 2.3%
-
Generation 1 kt 496 485 2.4% 1 854 2 196 15.6%
Total underground Tonnes
Mined kt 2 796 2 624 6.6% 10 104 10 256 -1.5%
Total Tonnes Mined 100%
kt 2 796 2 663 5.0% 10 148 10 305 -1.5%
Ounces Lonmin (incl Platinum oz
185 049 171 746 7.7% 651 307 659 754 -1.3%
Mined Pandora) PGMs oz 356 433 326 077 9.3% 1 252 155 1 264 101 -0.9%
Sales Platinum oz
218 687 211 140 3.6% 706 030 735 747 -4.0%
Refined metal PGMs oz 426 200 390 743 9.1% 1 381 413 1 405 103 -1.7%
Average $ basket incl. by-product revenue $/oz
880 902 -2.5% 844 796 6.0%
Prices R basket incl. by-product revenue ZAR/oz 11 567 12 663 -8.7% 11 236 11 637 -3.4%
Exchange rate Average rate for period ZAR/$
13.17 14.06 -6.3% 13.37 14.77 -9.5%
Unit costs Cost of production per PGM ounce ZAR/oz
11 524 11 046 -4.3% 11 701 10 748 -8.9%
Ben Magara, Chief Executive Officer, said: “Our principal focus for 2017 was to remain at least cash
neutral in line with our short term strategic objective to be able to deal successfully with the continued
low PGM pricing environment. Given the slow start to the year, we are pleased with the way our mining
operations have performed throughout the last three successive quarters to compensate for the poor
performance in the first four months of the financial year up to 31 January 2017. We have succeeded in
making meaningful progress in this tough operating environment, by improving our production
performance reducing capital expenditure to the minimum required for the safe and efficient running of
operations, and maintaining operational and strategic flexibility. Our processing teams continue to
deliver exceptional performance. Lonmin’s Operational Review continues with the primary objective of
preserving value for shareholders and safeguarding the long-term interests of employees and all key
stakeholders. We are pleased with the progress made so far and will report the results to shareholders in
due course.”
Safety
- Our safety strategy is centred on the belief that Zero Harm is achievable and important contributions
are required from all stakeholders to achieve it.
- We had a fatality free fourth quarter and the twelve month rolling LTIFR to 30 September 2017
improved by 9.1% to 4.52 per million man hours from 4.97 in the prior year.
- Despite most safety indicators showing improvement, regrettably five of our colleagues were fatally
injured during the first nine months of the year. We extend our deepest condolences to the families
and friends of our colleagues and deeply regret their loss.
- We remain determined to better our overall safety performance and we continue to enhance our
safety initiatives. Each incident was thoroughly investigated and reported to the DMR. Lessons
learned from each incident were implemented into action plans and shared across operations.
- K3 achieved 6.5 million fatality-free shifts.
- EPC concentrator achieved four years lost time injury free.
- The Assay laboratory achieved 11 years of operating without a lost-time injury.
- We have been encouraged that our collaboration with key stakeholders, including the Department of
Mineral Resources (DMR) and The Association of Mineworkers and Construction Union (AMCU),
continues to yield results, as we have experienced improved safety and decreasing Section 54
stoppages.
Fourth Quarter Production Overview
Mining Operations
The Marikana mining operations (including Pandora) produced 2.8 million tonnes during the quarter, an
increase of 5.0% or 133,000 tonnes on the fourth quarter of 2016, driven by a 13.4% increase in
production from our three core Generation 2 shafts (K3, Rowland and Saffy).
Generation 2 shafts
Production for the fourth quarter from our Generation 2 shafts (K3, Rowland, Saffy and 4B) was 2.3
million tonnes, an increase of 7.5% on the fourth quarter of 2016, notwithstanding an 18.3% decrease in
production from 4B. Excluding 4B, production for the fourth quarter from our three core long life
Generation 2 shafts, increased by 13.4%. We continually review each shaft on its merits and in light of
4B shaft’s lacklustre performance and its short life of mine relative to the other Generation 2 shafts, the
capital required to improve 4B ranks behind other projects in capital allocation. As such, while we remain
in a capital constrained environment, we are reclassifying 4B as a Generation 1 shaft from 2018.
- K3 shaft produced 852,000 tonnes, an increase of 20.3% on the fourth quarter of 2016. The
production of 293,000 tonnes at K3 for the month of August was the highest since 2013.
- Saffy shaft produced 604,000 tonnes, an increase of 10.3% on the fourth quarter of 2016. This was
Saffy’s highest quarterly production in its history.
- Rowland shaft produced 520,000 tonnes, an increase of 6.9% on the fourth quarter of 2016. This was
the shaft’s second highest quarterly production since the fourth quarter of the 2011 financial year,
bettered only by the 528,000 tonnes produced in Q3 2017.
- 4B produced 324,000 tonnes, a decrease of 18.3% on the prior year period, as it sought to recover
from the worse than anticipated geological conditions and safety challenges of the previous quarter.
Generation 1 shafts
In line with the Group’s rationalisation of high cost ounces, production for the fourth quarter from our
Generation 1 shafts (Hossy, Newman, W1, E1 and E2), excluding E3 and Pandora, at 326,000 tonnes was
14.3% lower than the fourth quarter of 2016. Some of these shafts are run by contractors, which provide
better flexibility to retain or close them, depending on their profit contribution to the Company. In this
regard, E2 shaft has reached a stage where the remaining ore reserve is insufficient to support an
economically viable operation. As a result, the shaft will be placed on care and maintenance by January
2018.
The combined E3 Pandora production of 170,000 tonnes is up 63.3% on the fourth quarter of 2016, on
the back of progress made pursuant to our recovery plans. On completion of the Pandora acquisition and
in light of the future value potential in this shaft it is under consideration to be classified as a Generation
2 shaft.
Hossy shaft was due to be closed at the end of the 2017 financial year, but as a result of the improved
performance and the IAOR of 11 months, we have decided to delay the placement on care and
maintenance of Hossy by another year to around September 2018, depending on continued profit
contribution.
There was no production from Newman shaft this quarter, as the shaft was put on care and maintenance
in March 2017 due to safety concerns and the depletion of mineable reserves.
Production Losses
For the fourth quarter, production lost due to Section 54 safety stoppages totalled only 38,000 tonnes,
compared to 82,000 tonnes in the fourth quarter of 2016, on the back of our improved ongoing focus on
safety and pro-active interactions with the Inspectorate of the DMR and with the Unions. Given the
reduced operational disruptions, we experienced a safe mining rhythm which is crucial for good
performance.
Q4 2017 Q4 2016
Tonnes Tonnes
Section 54 safety stoppages 38,000 82,000
Management Induced Safety Stoppages and other 22,000 13,000
Community disruptions and other 56,000 21,000
Total tonnes lost 116,000 116,000
The increase in Management Induced Safety Stoppages (MISS) shows a more self-regulated effort to
section 23 and management stoppages.
However, we experienced sporadic community unrest during July, which impacted production on our
Eastern shafts. The community unrest contributed 25,000 tonnes to the total tonnes lost for the fourth
quarter.
Process Operations
Milling production in the fourth quarter of 2.8 million tonnes was broadly flat on the fourth quarter of
2016, due to stock release in the fourth quarter of 2016.
Underground and overall milled head grade in the fourth quarter at 4.72 grammes per tonnes (5PGE+Au)
increased by 2.9% when compared to the 4.59 grammes per tonne achieved in the fourth quarter of
2016 due to improved ore mix and also improved mining standards which reduced dilution.
Saleable Platinum production (Metals-in-Concentrate including purchases) in the fourth quarter was
186,764 ounces, which was 2.3% higher than the fourth quarter of 2016, due to the higher mill head
grade and recoveries. Platinum ounces in concentrate produced (contained) in the fourth quarter was
192,540 ounces, which was 2.3% higher than the fourth quarter of 2016.
Concentrator recoveries in the fourth quarter were 87.6%, an increase of 1.9% from 86.0% in the fourth
quarter of 2016, mainly due to plant stability brought about by the consistent supply of ore from mining
operations.
Total refined Platinum production in the fourth quarter at 205,946 ounces was 6.2% lower than the
fourth quarter of 2016, due to reduced output from the smelter clean-up project. Refined production
benefited from the smelter clean-up project, which released only 12,445 Platinum ounces during the
quarter compared to 36,881 Platinum ounces during the fourth quarter of 2016. The smelter clean-up
project is expected to continue into the first half of the 2018 financial year, but at a much reduced level.
Sales & Pricing
Platinum sales for the quarter were 218,687 ounces, an increase of 3.6% on the fourth quarter of 2016,
due to continued innovation and operational excellence. PGM sales were 426,200 ounces, up 9.1% on
the fourth quarter of 2016, driven by timing of sales and metal releases from smelter project.
The US Dollar basket price (including base metal revenue) at $880 per ounce during the quarter was
down 2.5% on the fourth quarter of 2016 while the corresponding Rand basket price (R11,567 per PGM
ounce) was 8.7% lower than the prior year period. The average Rand to US Dollar exchange rate was
6.3% stronger at 13.17 compared to 14.06 in the fourth quarter of 2016.
Full Year Production Overview
Mining Operations
After a poor first four months of the financial year up to 31 January 2017, the improvement in our
production performance since February 2017 enabled the mining operations to produce total tonnes for
the year of 10.1 million tonnes, broadly flat on the 10.3 million tonnes from the prior year. Our three
core Generation 2 shafts (excluding 4B) increased year on year production for the 12 months by 7.1%
(increase of 0.4 million tonnes from 6.5 million tonnes to 6.9 million tonnes) and, in line with our
strategy to remove high cost production in a low price environment, our Generation 1 shafts reduced
production for the twelve months by 15.6% (decrease of 0.3 million tonnes from 2.2 million tonnes to 1.9
million tonnes).
Generation 2 Shafts Tonnes Hoisted
Quarterly
Q4 Q3 Q2 Q1 Total
Tonnes (‘000)
2017 1 842 1 879 2 228 2 300 8 250
2016 1 944 1 934 2 043 2 139 8 061
Generation 2 shafts
Our three core long life Generation 2 shafts, which represent around 68% of total tonnage production,
produced 6.9 million tonnes for the twelve month period, a 7.1% increase on prior year comparable
production, driven by a strong turnaround at K3 which was up 5.4% year on year (28% of total
production) after a slow start, and an impressive 11.2% year on year increase from Rowland (19% of
total production). Saffy (21% of total production) continues to perform well and was up 5.8% year on
year.
Increase/
2017 2016
decrease
Tonnes Tonnes
Generation 2 Shafts %
('000) ('000)
K3 Shaft 2 831 2 687 5.4%
Rowland Shaft 1 925 1 731 11.2%
Saffy Shaft 2 174 2 055 5.8%
Total Core Generation 2 Shafts 6 930 6 473 7.1%
4B Shaft* 1 320 1 588 -16.9%
Total Generation 2 shafts 8 250 8 061 2.3%
Production at 4B (13% of total production) was down 16.9% due to worse than anticipated geological
conditions and was also impacted by safety stoppages and the disruption associated with two fatalities.
Generation 1 shafts
For the twelve month period, production from our Generation 1 shafts (Hossy, Newman, W1, E1, E2, E3
and Pandora (100%)) at 1.9 million tonnes was 15.6% lower than the prior year, in line with the Group’s
rationalisation of these shafts. Newman shaft was placed on care and maintenance in March.
The combined E3 Pandora production of 574,000 tonnes is up 8% on the prior year, on the back of
progress made pursuant to our recovery plans. In light of this improved performance and on completion
of the Pandora acquisition, E3 is under consideration to be classified as a Generation 2 shaft.
Production Losses
For the twelve months period, a total of some 276,000 tonnes of production was lost in the year due to
Section 54 safety stoppages, equivalent to 17,000 Platinum ounces lost, compared to 559,000 tonnes
lost in the prior year. This was a reduction of 51%.
2017 2016
Tonnes Tonnes
Section 54 safety stoppages 276,000 559,000
Management induced safety stoppages and other 176,000 33,000
Community disruptions and other 143,000 86,000
Total tonnes lost 595,000 678,000
We experienced some community unrest during May and June, which impacted production on the
eastern shafts. The community unrest contributed 82,000 tonnes to the total tonnes lost for the current
year.
While we continued to experience a reduction in the duration and frequency of Section 54 stoppages,
there was an increase in MISS as part of increased self-regulation. Production lost due to MISS for the
year increased to 176,000 tonnes from 33,000 tonnes in the prior year, reflecting our non-negotiable
stance on safety.
Immediately Available Ore Reserves
Operational flexibility was reduced with the immediately available ore reserve position of 3.2 million
square metres at 30 September 2017, or 19 months average production versus 3.8 million square
metres, or 22 months at 30 September 2016.
(m2 '000) months
2017 2016 2017 2016
K3 844 1 030 19 23
Rowland 309 504 12* 18
Saffy 772 765 25 26
4B 431 556 18 21
Generation 2 2 356 2 855 18 22
Generation 1 614 751 21 24
K4 188 188
Total 3 158 3 794 19 22
*Rowland ore reserve dropped due to depletion of levels on the extremities of the shaft boundary. Mining tonnes
are maintained by focussing on vamping operations. The development of the MK2 extension, subject to securing
project finance, will improve the ore reserve position towards 2019.
As part of our drive to increase mining production, following the poor first quarter production, our
healthy ore reserve position enabled us to move some non-critical development crews to provide
7
additional stoping and vamping crews in our core Generation 2 shafts. However, following the mining
turnaround achieved, the development crews had returned to their development areas by the end of the
financial year.
The ore reserve position of the Marikana mining operations is still at a level that provides the necessary
flexibility required for efficient mining (industry benchmark of around 12-15 months).
Process Operations
Total tonnes milled for the year at 10.0 million tonnes were 3.2 % lower than prior year of 10.4 million
tonnes, in line as Generation 1 shaft continues to deplete in line with our strategy
Platinum-in-concentrate production (before concentrate purchases) for the year of 644,240 saleable
Platinum ounces was 2.9% down on prior year, due to lower tonnes milled.
The overall milled head grade for the year at 4.61 grammes per tonnes (5PGE+Au) was broadly in line
with the 4.59 grammes per tonne achieved in the prior year.
Concentrators continued to deliver excellent overall recoveries for the year at 87.0%, marginally higher
than the 86.6% for the prior year.
For the twelve month period, refined production of 687,529 Platinum ounces was achieved, a decrease
of 7.3% on the refined production of 741,890 ounces from prior year, in line with our strategy to remove
high cost production and the reduction in contribution from the smelter clean-up project. Total PGMs
produced for the year were 1,320,802 ounces, a decrease of 8.3% on prior year.
The smelter clean-up project and permanent release from the smelting and refining plants continued
during the current year and released a total of 31,682 ounces of Platinum during the year, less than the
73,186 ounces in the prior year as expected. The smelter clean-up project was one of the initiatives
aimed at improving our cash position, having identified the opportunity to increase low cost refined
Platinum production to make up for the shortfall in mined ounces. We expect minimal ounces in the
2018 financial year, as the smelter ounces are depleted.
Sales & Pricing
Sales for the year were 706,030 Platinum ounces, exceeding the sales guidance of 650,000 to 680,000
Platinum ounces.
For the year, the US Dollar basket price (including base metal revenue) at $844 per ounce increased by
6.0% on the prior year, while the corresponding Rand basket price (R11,236 per ounce) was 3.4% lower
than the prior year. The average Rand to US Dollar exchange rate for the year was 9.5% stronger at 13.37
compared to 14.77 for the prior year.
Unit Costs
Unit costs for the quarter were R11,524 per PGM ounce, a year on year increase of 4.3%. This is within
our revised guidance of between R11,300-R11,800.
For the year, unit costs increased by 8.9% to R11,701 per PGM ounce, partly impacted by the 8 % increase
in labour costs. The poor production in the first four months resulted in a significant increase in unit cost
in the first half of the year to R12,059 per PGM ounce, with improved mining performance delivering a
unit cost of R11,406 for the last six months to September 2017, enabling us to achieve our revised
guidance of between R11,300-R11,800.
8
2017 Unit Costs Per Quarter
Q4 Q3 Q2 Q1 Total
Rand per PGM ounce 11 524 11 278 11 836 12 296 11 701
Capital Expenditure
Capital expenditure was limited to R1,336 million ($100 million) compared with R1,268 million ($89
million) in the prior year, which includes R370 million for the third party funded Bulk Tailings Treatment
project. This is in line with our strategy of limiting capital expenditure to levels required to satisfy
regulatory and safety standards, essential sustaining capital expenditure in the continuing shafts and
ensuring that Immediately Available Ore Reserve positions are maintained at an acceptable level to
sustain production at our Generation 2 shafts.
2017 2018
2016 2017 Revised Guidance Guidance
Actual Actual
Rm Rm Rm Rm
K3 215 170 172 157
Saffy -2 21 7 29
Rowland 25 48 42 61
Rowland MK2 216 178 159 137
Generation 2 shafts 454 417 380 385
K4 4 7 12 2
Hossy 0 1 - 30
Generation 3 & 1 shafts 4 8 12 32
Central & Other Mining 279 93 143 139
Total Mining 737 518 535 556
Concentrators - Excl BTT 164 158 185 159
BTT 102 370 408 59
Smelting & Refining 163 95 110 324
Total Process 428 623 703 542
Infill Apartments 62 151 156 191
Other 40 44 37 40
Total 1 268 1 336 1 430 1 329
The capital expenditure is marginally less than our revised guidance of R1,430 billion.
Capital invested in the period included R178 million for the Rowland MK2 project.
9
Despite consistent strong performance from Rowland, Lonmin’s current capital position makes it
challenging to continue funding the MK2 project, which is necessary to extend Rowland’s economic life.
Lonmin believes that the MK2 project will be value accretive and the Company is exploring options to
introduce funding partners.
Cash
- Gross cash improved to $253 million at 30 Sept 2017 up from $236 million at 30 June 2017.
- Net Cash improved to $103 million (gross cash of $253 million less the drawn term loan of $150
million) at 30 Sept 2017, up from $86 million (gross cash of $236 million less the drawn term loan of
$150 million) at 30 June 2017.
Guidance for Financial Year 2018
The operating environment remains tough, and we are planning on the basis that it will remain so for the
foreseeable future.
- Platinum sales expected to be between 650,000 and 680,000 ounces.
- Unit costs remain under pressure and are expected to be in the range of R12,000 to R12,500 per
PGM ounce.
- Capital expenditure is anticipated to be limited to a range of R1.4 billion to R1.5 billion for each of
the years ending 30 September 2018, 2019 and 2020, pending outcome of operational review.
Update of Operational Review and Deferral of Accounts
Lonmin announced an Operational Review on 7 August 2017 to address the uncertainties reported in our
Interim Results in May 2017 on the Group’s ability to continue as a going concern due to material uncertainty
over the existing debt facilities in the weak economic and pricing environment. Underlying operational
performance, as outlined in the Q4 production report, continues to be strong while the rand basket price has
improved since the announcement of the Operational Review. Lonmin has gross cash of $253 million at 30
September 2017 (net cash of $103 million after deducting the drawn term loan of $150 million). The Board
believes this provides adequate liquidity to fund the business through the Operational Review process.
The Operational Review includes potential transactions aimed at releasing capital from Lonmin’s high quality
downstream processing operations as well as several of its upstream assets and improving financial
sustainability. Lonmin is encouraged by the level of interest generated by the Operational Review. Discussions
with third parties in relation to a number of proposals which Lonmin has received are ongoing.
Whilst the preparation of the financial statements and operational review process is still ongoing, current
indications are that the Tangible Net Worth of the Group at its financial year-end would be in the region of the
covenant (the “TNW Covenant”) level required by its banking facilities of $1.1 billion due to a non-cash
impairment of the carrying value of the Group’s assets. As announced on 6 October 2017, Lonmin obtained a
pre-emptive waiver from its lending banks from the testing of the TNW Covenant at its financial year-end on
30 September 2017. The outcome of discussions, both as part of the Operational Review and with existing and
prospective lenders, including discussions around developmental capital for the Rowland MK2 project, could
have a material bearing both on the directors' assessment of the impairment and on the directors’ assessment
of the basis of the preparation of the audited financial statements of the Company for the year ended 30
September 2017 as a going concern.
The objective of the Operational Review is to achieve a properly funded viable business plan based on
potential disposal proceeds, new debt capital and the continuing support of existing lenders which may
10
include obtaining their consents and waivers of any future potential covenant breaches and disposals under
the Operational Review as required by the facilities agreements.
The Operational Review, and the potentially significant outcomes, has required and continues to demand
management’s undivided attention and, as a result, the preparation of the audited full year financial results
has been delayed. This includes areas of material accounting judgement like impairment of assets, the basis of
preparation of the accounts and the impact of any outcomes of the Operational review thereon. Lonmin and
its auditors require additional time to complete the audit.
Taking these factors together, the Board has decided that it will not be appropriate to publish the 2017
financial results on 13 November as previously planned. A further announcement will be made in due course.
- ENDS –
ENQUIRIES
Investors / Analysts:
Lonmin
Tanya Chikanza (Head of Investor Relations) +27 11 218 8358 /+44 20 3908 1073
Andrew Mari (Investor Relations Manager) +27 11 218 8420
Media:
Cardew Group
Anthony Cardew / David Roach / +44 207 930 0777
Joe McGregor
Wendy Tlou +27 83 358 0049
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 Igneous Complex in South Africa, where more than 70%
of known global PGM resources are located.
The Company creates value 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
11
3 months 3 months 12 months 12 months
to 30 Sep to 30 Sep to 30 Sep to 30 Sep
2017 2016 2017 2016
Tonnes Marikana K3 Shaft kt 852 708 2 831 2 687
1
mined Rowland Shaft kt 520 487 1 925 1 731
Saffy Shaft kt 604 547 2 174 2 055
Core Generation 2 kt 1 976 1 742 6 930 6 473
4B Shaft kt 324 397 1 320 1 588
Generation 2 kt 2 300 2 139 8 250 8 061
1B Shaft kt 6
Hossy Shaft kt 162 191 655 712
Newman Shaft kt 56 51 346
W1 Shaft kt 41 34 145 162
East 1 Shaft kt 52 33 168 141
East 2 Shaft kt 71 66 262 293
East 3 Shaft kt 14 21 71 63
2
Pandora (100%) kt 156 83 503 471
Generation 1 kt 496 485 1 854 2 196
Underground kt 2 796 2 624 10 104 10 256
Opencast kt 39 45 49
Lonmin (100%) Total Tonnes Mined
(100%) kt 2 796 2 663 10 148 10 305
% tonnes mined from
UG2 reef (100%) % 72.5% 74.2% 73.1% 75.3%
Lonmin (attributable) Underground &
Opencast kt 2 718 2 622 9 897 10 070
Ounces Lonmin excluding Pandora Pt Ounces oz 173 851 165 894 616 422 627 245
3
Mined Pandora (100%) Pt Ounces oz 11 198 5 852 34 886 32 509
Lonmin Pt Ounces oz 185 049 171 746 651 307 659 754
Lonmin excluding Pandora PGM Ounces oz 334 154 314 538 1 182 793 1 200 244
Pandora (100%) PGM Ounces oz 22 279 11 539 69 362 63 857
Lonmin PGM Ounces oz 356 433 326 077 1 252 155 1 264 101
Tonnes Marikana Underground kt 2 605 2 699 9 486 9 806
4
milled Opencast kt 0 39 49 98
Total kt 2 605 2 738 9 535 9 904
5
Pandora Underground kt 156 83 503 471
Lonmin Platinum Underground kt 2 761 2 783 9 989 10 277
6
Milled head grade g/t 4.72 4.59 4.61 4.60
7
Recovery rate % 87.6% 86.3% 87.1% 86.7%
Opencast kt 0 39 49 98
6
Milled head grade g/t 4.97 4.81 4.42 3.59
7
Recovery rate % 67.7% 64.3% 68.3% 73.6%
Total kt 2 761 2 821 10 039 10 375
6
Milled head grade g/t 4.72 4.59 4.61 4.59
7
Recovery rate % 87.6% 86.0% 87.0% 86.6%
12
3 months 3 months 12 months 12 months
to 30 Sep to 30 Sep to 30 Sep to 30 Sep
2017 2016 2017 2016
Metals-in- Marikana Platinum oz 171 659 174 936 609 354 631 066
8
concentrate Palladium oz 79 810 79 673 282 246 292 315
Gold oz 4 259 4 253 15 171 15 206
Rhodium oz 24 229 24 199 86 254 90 151
Ruthenium oz 40 811 39 908 144 996 147 740
Iridium oz 8 611 8 289 30 303 29 845
Total PGMs oz 329 379 331 259 1 168 324 1 206 322
9 MT
Nickel 880 889 3 144 3 169
9 MT
Copper 544 547 1 964 1 949
Pandora Platinum oz 11 198 5 852 34 886 32 509
Palladium oz 5 303 2 752 16 509 15 231
Gold oz 76 16 243 95
Rhodium oz 1 906 953 5 928 5 360
Ruthenium oz 3 133 1 616 9 750 8 852
Iridium oz 662 349 2 047 1 811
Total PGMs oz 22 279 11 539 69 362 63 857
9 MT
Nickel 18 15 65 93
9 MT
Copper 10 6 31 32
Concentrate Platinum oz 3 907 1 824 4 871 5 129
purchases Palladium oz 1 239 472 1 550 1 555
Gold oz 16 7 21 18
Rhodium oz 503 158 597 565
Ruthenium oz 772 299 935 919
Iridium oz 221 73 263 242
Total PGMs oz 6 658 2 833 8 237 8 429
9 MT
Nickel 5 1 6 2
9 MT
Copper 3 0 4 2
Lonmin Platinum Platinum oz 186 764 182 612 649 111 668 704
Palladium oz 86 353 82 897 300 305 309 101
Gold oz 4 351 4 275 15 435 15 319
Rhodium oz 26 638 25 310 92 779 96 076
Ruthenium oz 44 716 41 824 155 680 157 510
Iridium oz 9 494 8 712 32 614 31 898
Total PGMs oz 358 316 345 630 1 245 923 1 278 607
9 MT
Nickel 903 905 3 215 3 265
9
Copper MT 557 552 1 998 1 983
13
3 months 3 months 12 months 12 months
to 30 Sep to 30 Sep to 30 Sep to 30 Sep
2017 2016 2017 2016
Refined Lonmin refined Platinum oz 205
Metal 632 219 250 685 028 739 315
Production Production Palladium oz 94 835 96 783 316 517 334 470
Gold oz 5 563 5 483 18 017 19 596
Rhodium oz 28 108 32 294 100 677 121 149
Ruthenium oz 48 749 56 315 162 141 177 006
Iridium oz 8 914 14 011 33 654 44 855
Total PGMs oz 391 801 424 136 1 316 034 1 436 390
Toll refined Platinum oz 314 243 2 501 2 575
metal Palladium oz 155 114 789 713
production Gold oz 7 6 35 30
Rhodium oz 59 37 310 207
Ruthenium oz 137 58 926 698
Iridium oz 36 19 207 110
Total PGMs oz 707 477 4 768 4 333
Total Platinum oz 205 946 219 493 687 529 741 890
refined Palladium oz 94 990 96 897 317 306 335 183
PGMs Gold oz 5 570 5 489 18 052 19 626
Rhodium oz 28 167 32 331 100 987 121 356
Ruthenium oz 48 885 56 373 163 067 177 704
Iridium oz 8 950 14 030 33 861 44 965
Total PGMs oz 392 508 424 613 1 320 802 1 440 724
10 MT
Base metals Nickel 1 022 1 096 3 502 3 769
10 MT
Copper 684 696 2 126 2 227
Sales Refined Platinum oz 218 687 211 140 706 030 735 747
Metal Palladium oz 104 549 94 440 324 273 334 319
Sales Gold oz 4 989 5 890 16 675 20 735
Rhodium oz 29 312 32 322 107 742 121 604
Ruthenium oz 57 981 31 701 193 479 145 306
Iridium oz 10 682 15 250 33 212 47 392
Total PGMs oz 426 200 390 743 1 381 413 1 405 103
10 MT
Nickel 1 031 1 249 3 770 3 773
10
Copper MT 820 624 1 874 2 265
10 MT
Chrome 363 564 532 768 1 402 697 1 563 236
Average Platinum $/oz 954 1 084 953 978
prices Palladium $/oz 902 674 808 589
Gold $/oz 1 286 1 478 1 244 1 425
Rhodium $/oz 1 063 636 915 671
11 $/oz
$ basket excl. by-product revenue 832 850 790 753
12 $/oz
$ basket incl. by-product revenue 880 902 844 796
11 R/oz
R basket excl. by-product revenue 10 966 11 933 10 526 11 030
12 R/oz
R basket incl. by-product revenue 11 567 12 663 11 236 11 637
10 $/MT
Nickel 8 289 8 027 8 274 7 357
10 $/MT
Copper 6 487 4 468 5 661 4 508
R/oz
Unit Costs Cost of Production per PGM ounce 11 524 11 046 11 701 10 748
Exchange
13
Rates Average rate for period R/$ 13.17 14.06 13.37 14.77
Closing rate R/$ 13.55 13.71 13.55 13.71
14
Notes
1 Reporting of shafts are in line with our operating strategy for Generation 1 and Generation 2 shafts.
2 Pandora underground tonnes mined represents 100% of the total tonnes mined on the Pandora joint
venture of which 42.5% for October and November 2014 and 50% thereafter is attributable to Lonmin.
3 Ounces mined have been calculated at achieved concentrator recoveries and with Lonmin standard
downstream processing recoveries to present produced saleable ounces.
4 Tonnes milled excludes slag milling.
5 Lonmin purchases 100% of the ore produced by the Pandora joint venture for onward processing which is
included in downstream operating statistics.
6 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).
7 Recovery rate in the concentrators is the total content produced divided by the total content milled
(excluding slag).
8 Metals-in-concentrate have been calculated at Lonmin standard downstream processing recoveries to
present produced saleable ounces.
9 Corresponds to contained base metals in concentrate.
10 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.
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.
JSE Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd
15
Date: 03/11/2017 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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