A Deeper Look 04/ / 187. Lonmin Plc Annual Report and Accounts 2016

Transcription

1 Lonmin Plc 188 Consolidated Group Five Year Financial Record Mineral Resources and Mineral Reserves 04/ / 187 A Deeper Look Key financial and operational statistics over the past five years and a summary of our mineral resource and mineral reserve information. 01 / Strategic Report 02 / Governance 03 / Financial Statements 04 / A Deeper Look 05 / Shareholder Information

2 / 188 Lonmin Plc Consolidated Group Five Year Financial Record for the year ended 30 September Continuing operations Consolidated income statement: Revenue $m 1,118 1, ,520 1,614 Operating (loss) / profit $m (322) (2,018) (255) 147 (702) Underlying operating profit / (loss) $m 7 (134) (Loss) / profit before taxation $m (355) (2,262) (326) 140 (698) Underlying (loss) / profit before taxation $m (3) (143) Attributable (loss) / profit for the year $m (342) (1,661) (188) 166 (410) Underlying attributable (loss) / profit for the year $m (89) (94) Basic (loss) / earnings per share i cents (137.0) (3,437.6) (398.1) (1,299.3) Underlying (loss) / earnings per share i cents (35.6) (194.5) Consolidated statement of financial position: Non-current assets property, plant and equipment $m 1,158 1,477 2,882 2,908 2,889 Non-current assets other $m ,077 Net current assets $m Net cash / (debt) $m 173 (185) (29) 201 (421) Equity shareholders funds $m 1,669 1,629 3,233 3,409 2,488 Equity shareholders funds per share i cents 591 3,349 6,835 7,233 7,870 Cost of dividend paid $m 31 Dividends per share paid cents 15.0 Dividend in respect of the year per share cents Consolidated statement of cash flows: Cash inflow / (outflow) from operating activities $m 58 (12) (116) Free cash outflow $m (31) (167) (246) (154) (159) Trading cash inflow / (outflow) per share i cents 23.2 (24.8) (245.7) Free cash (outflow) / inflow per share i cents (12.4) (345.6) (521.0) (349.2) (503.9) Footnote: i The number of shares held prior to 12 December 2015 has been adjusted by a factor of 0.08 to reflect the bonus element of the Rights Issue.

3 Lonmin Plc / 189 Tonnes mined 1 Generation 2 K3 shaft kt 2,687 2,713 1,484 3,101 2,646 Rowland shaft kt 1,731 1,872 1,005 1,781 1,599 Saffy shaft kt 2,055 1, , B shaft kt 1,588 1, ,559 1,333 Ounces mined 4 Generation 2 kt 8,061 7,752 4,039 7,591 6,475 1B shaft kt Hossy shaft kt , Generation 1 Newman shaft kt W1 shaft kt East 1 shaft kt East 2 shaft kt East 3 shaft kt Pandora (100%) 2 kt Generation 1 kt 2,196 3,267 1,973 3,935 3,628 K4 shaft kt Total Underground kt 10,256 11,067 6,012 11,531 10,221 Opencast kt Total Underground & Opencast kt 10,305 11,297 6,345 12,058 10,663 Limpopo 3 Underground kt 6 Lonmin (100%) Total Tonnes mined kt 10,305 11,297 6,351 12,058 10,663 % tonnes mined from UG2 reef (100%) % 75.3% 75.1% 74.1% 73.9% 71.7% Lonmin (attributable) Underground & Opencast kt 10,070 11,016 6,180 11,730 10,413 Lonmin excluding Pandora Platinum oz 627, , , , ,346 Pandora (100%) Platinum oz 32,509 36,458 20,327 40,917 30,714 Limpopo Platinum oz 255 Lonmin Platinum oz 659, , , , ,060 Lonmin excluding Pandora Total PGMs oz 1,200,244 1,280, ,913 1,340,678 1,174,776 Pandora (100%) Total PGMs oz 63,857 71,861 40,044 78,353 58,300 Limpopo Total PGMs oz 572 Lonmin Total PGMs oz 1,264,101 1,352, ,529 1,419,032 1,233,076 Tonnes milled 5 Marikana Underground kt 9,806 10,930 5,389 10,854 9,936 Opencast kt Total kt 9,904 11,248 5,810 11,248 10,386 Pandora (100%) 6 Underground kt Limpopo 7 Underground kt 27 Lonmin Platinum Underground kt 10,277 11,491 5,696 11,428 10,367 Opencast kt Total kt 10,375 11,810 6,118 11,822 10,817 Milled head Lonmin Platinum Underground g/t grade 8 Opencast g/t Total g/t Concentrator Lonmin Platinum Underground % recovery rate 9 Opencast % Total % / Strategic Report 02 / Governance 03 / Financial Statements 04 / A Deeper Look 05 / Shareholder Information

4 / 190 Lonmin Plc Metals-in- Marikana Platinum oz 631, , , , ,393 concentrate 10 Palladium oz 292, , , , ,409 Gold oz 15,206 16,503 9,879 17,664 16,925 Rhodium oz 90, ,435 49,908 95,241 83,144 Ruthenium oz 147, ,689 81, , ,269 Iridium oz 29,845 32,416 16,143 33,059 27,610 Total PGMs oz 1,206,322 1,335, ,508 1,319,902 1,196,750 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 Pandora Platinum oz 32,509 37,553 18,913 41,117 30,625 Palladium oz 15,231 17,496 8,960 19,190 14,261 Gold oz Rhodium oz 5,360 6,383 3,226 6,563 4,743 Ruthenium oz 8,852 10,466 5,168 9,764 7,135 Iridium oz 1,811 1, ,773 1,195 Total PGMs oz 63,857 74,019 37,237 78,721 58,188 Lonmin Platinum Platinum oz 663, , , , ,019 before Concentrate Palladium oz 307, , , , ,670 Purchases Gold oz 15,301 16,635 10,026 17,979 17,153 Rhodium oz 95, ,818 53, ,803 87,886 Ruthenium oz 156, ,156 87, , ,404 Iridium oz 31,655 34,405 17,103 34,832 28,805 Total PGMs oz 1,270,179 1,409, ,253 1,398,623 1,254,938 Concentrate Platinum oz 5,129 6,273 4,398 3,813 2,802 Purchases Palladium oz 1,555 1,869 1,242 1, Gold oz Rhodium oz Ruthenium oz 919 1, Iridium oz Total PGMs oz 8,429 10,394 6,955 5,980 4,647 Lonmin Platinum Platinum oz 668, , , , ,821 Palladium oz 309, , , , ,643 Gold oz 15,319 16,653 10,040 17,993 17,163 Rhodium oz 96, ,634 53, ,225 88,216 Ruthenium oz 157, ,235 87, , ,808 Iridium oz 31,898 34,743 17,327 35,004 28,934 Total PGMs oz 1,278,607 1,420, ,208 1,404,603 1,259,585 Nickel 11 MT 3,265 3,669 2,092 3,743 3,489 Copper 11 MT 1,983 2,250 1,314 2,340 2,226

5 Lonmin Plc / 191 Refined Lonmin refined Platinum oz 739, , , , ,414 production metal production Palladium oz 334, , , , ,558 Gold oz 19,596 18,232 12,299 18,676 18,398 Rhodium oz 121, ,372 76,940 79, ,896 Ruthenium oz 177, , , , ,394 Iridium oz 44,855 32,180 27,991 28,068 32,844 Total PGMs oz 1,436,390 1,443, ,835 1,324,426 1,274,503 Toll refined Platinum oz 2, ,501 1,364 38,958 metal production Palladium oz , ,043 Gold oz Rhodium oz ,546 1,837 4,717 Ruthenium oz 698 2,093 7,417 6,519 7,907 Iridium oz ,914 1,012 1,944 Total PGMs oz 4,333 3,731 17,259 11,683 75,299 Total refined Platinum oz 741, , , , ,372 PGMs Palladium oz 335, , , , ,601 Gold oz 19,626 18,246 12,415 18,965 19,128 Rhodium oz 121, ,467 78,486 80, ,613 Ruthenium oz 177, , , , ,300 Iridium oz 44,965 32,740 29,905 29,081 34,788 Total PGMs oz 1,440,724 1,447, ,094 1,336,109 1,349,802 Nickel 12 MT 3,769 3,720 2,387 3,532 3,786 Copper 12 MT 2,227 2,276 1,480 2,168 2,153 Sales Refined metal sales Platinum oz 735, , , , ,831 Palladium oz 334, , , , ,849 Gold oz 20,735 19,199 13,100 18,423 19,273 Rhodium oz 121,604 92,520 81,120 77, ,054 Ruthenium oz 145, , , , ,751 Iridium oz 47,392 30,114 29,778 28,828 37,187 Total PGMs oz 1,405,103 1,433, ,087 1,301,973 1,383,945 Nickel 12 MT 3,773 3,656 2,251 3,586 3,843 Copper 12 MT 2,265 2,131 1,448 2,130 2,197 Chrome 12 MT 1,563,236 1,440, ,881 1,388,761 1,209,643 Average prices Platinum $/oz 978 1,095 1,403 1,517 1,517 Palladium $/oz Gold $/oz 1,425 1,487 1,509 1,508 1,597 Rhodium $/oz ,050 1,097 1,274 Basket price of PGMs 13 $/oz ,013 1,100 1,095 Full Basket price of PGMs 14 $/oz ,072 1,167 1,163 Basket price of PGMs 13 R/oz 11,030 10,207 10,654 10,291 8,807 Full Basket price of PGMs 14 R/oz 11,637 10,829 11,277 10,921 9,304 Nickel 12 $/MT 7,357 10,512 13,053 12,772 14,330 Copper 12 $/MT 4,508 5,584 6,810 7,113 7,201 Footnotes: 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. 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 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. Limpopo tonnes milled represents low grade development tonnes milled. 8. 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). 9. Recovery rate in the concentrators is the total content produced divided by the total content milled (excluding slag). 10. As from 2014, metals-in-concentrate have been calculated at Lonmin standard downstream processing recoveries to present produced saleable ounces. 11. Corresponds to contained base metals in concentrate. 12. 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. 13. 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. 14. As per note 13 but including revenue from base metals. 01 / Strategic Report 02 / Governance 03 / Financial Statements 04 / A Deeper Look 05 / Shareholder Information

6 / 192 Lonmin Plc Capital expenditure 15 Rm 1,268 1, ,500 3,296 $m Employees and as at 30 September Employees # 25,296 26,968 28,276 28,379 28,230 contractors as at 30 September Contractors # 7,497 8,701 10,016 10,042 8,293 Productivity m 2 per mining K3 shaft m 2 /person (Generation 2) employee 4B/1B shaft 16 m 2 /person (shaft head) Rowland shaft m 2 /person Saffy shaft m 2 /person Generation 2 m 2 /person m 2 per stoping K3 shaft m 2 /crew n/a & white area crew 4B/1B shaft 16 m 2 /crew n/a Rowland shaft m 2 /crew n/a Saffy shaft m 2 /crew n/a Generation 2 m 2 /crew n/a Exchange rates Average rate for period 17 R/$ /$ Closing rate R/$ /$ Underlying cost PGM operations Mining $m (625) (785) (622) (919) (877) of sales segment Concentrating $m (114) (145) (107) (159) (168) Smelting and refining 18 $m (102) (120) (106) (133) (147) Shared services $m (49) (71) (74) (101) (100) Management and marketing services $m (21) (25) (24) (26) (35) Ore, Concentrate and other purchases $m (34) (48) (38) (64) (48) Limpopo mining $m (2) (2) (3) (7) (9) Special item adjustment $m Community trusts donations $m (1) (1) Royalties $m (7) (9) (5) (6) (8) Share based payments $m (11) (14) (15) (13) (12) Inventory movement $m (34) (84) (79) 203 (140) FX and Group Charges $m (1) Total PGM operations segment $m (998) (1,253) (761) (1,181) (1,412) Evaluation excluding FX $m 1 2 Exploration excluding FX $m (5) (7) (6) (4) (5) Corporate excluding FX $m (3) (2) (2) (10) (4) FX $m (2) (10) (1) (4) (2) Total underlying cost of sales $m (1,008) (1,272) (771) (1,199) (1,421) PGM operations Mining Rm (9,155) (9,414) (6,556) (8,545) (7,079) segment Concentrating Rm (1,650) (1,731) (1,121) (1,469) (1,346) Smelting and refining 18 Rm (1,470) (1,426) (1,119) (1,235) (1,183) Shared services Rm (721) (810) (786) (928) (805) Management and marketing services Rm (304) (294) (256) (243) (287) Ore, Concentrate and other purchases Rm (494) (574) (402) (597) (385) Limpopo mining Rm (23) (25) (31) (61) (76) Special Item Adjustment Rm 3, Community trusts donations Rm (15) (10) Royalties Rm (94) (103) (52) (55) (68) Share based Payments Rm (158) (164) (148) (121) (99) Inventory movement Rm (510) 6 (480) 2,145 (842) FX and Group Charges Rm 265 (2,659) (1,117) (1,247) (218) Rm (14,328) (17,203) (9,040) (12,356) (11,424)

7 Lonmin Plc / 193 Shaft head Rand per tonne K3 shaft R/T (890) (840) (990) (629) (599) unit cost 4B/1B shaft 16 R/T (714) (760) (859) (571) (527) underground operations Rowland shaft R/T (936) (825) (992) (694) (631) excluding K4 Saffy shaft R/T (858) (886) (1,164) (878) (853) Generation 2 R/T (857) (830) (995) (666) (623) Hossy shaft R/T (915) (927) (1,002) (749) (698) Newman shaft R/T (1,008) (738) (907) (592) (603) East 1 shaft R/T (1,041) (1,025) (1,162) (611) (505) East 2 shaft R/T (1,033) (824) (831) (657) (642) East 3 shaft & ore purchases R/T (927) (872) (964) (905) (788) W1 shaft R/T (920) (902) (987) (934) (989) Generation 1 R/T (957) (858) (956) (720) (662) Total Underground R/T (878) (838) (983) (683) (636) Rand per PGM oz K3 shaft R/oz (7,409) (7,171) (8,683) (5,314) n/a 4B/1B shaft 16 R/oz (6,806) (7,442) (8,231) (5,385) n/a Rowland shaft R/oz (7,359) (6,428) (7,727) (5,292) n/a Saffy shaft R/oz (6,755) (7,143) (9,702) (7,912) n/a Generation 2 R/oz (7,118) (7,023) (8,539) (5,683) n/a Hossy shaft R/oz (6,961) (8,375) (8,472) (6,671) n/a Newman shaft R/oz (7,568) (5,412) (6,741) (4,626) n/a East 1 shaft R/oz (7,949) (7,406) (8,233) (4,805) n/a East 2 shaft R/oz (7,654) (6,163) (6,924) (5,175) n/a East 3 shaft & ore purchases R/oz (6,960) (6,522) (7,201) (6,606) n/a W1 shaft R/oz (7,565) (7,362) (6,969) (7,695) n/a Generation 1 R/oz (7,257) (6,774) (7,487) (5,778) n/a Total Underground R/oz (7,150) (6,950) (8,195) (5,714) n/a 01 / Strategic Report 02 / Governance 03 / Financial Statements 04 / A Deeper Look 05 / Shareholder Information

8 / 194 Lonmin Plc Cost of Cost Mining Rm (9,155) (9,414) (6,556) (8,545) (7,079) production Concentrating Rm (1,650) (1,731) (1,121) (1,469) (1,346) (PGM operations Smelting and refining 18 Rm (1,470) (1,426) (1,119) (1,235) (1,183) segment) 19 Shared services Rm (721) (810) (786) (928) (805) Management and marketing services Rm (304) (294) (256) (243) (287) Rm (13,299) (13,674) (9,838) (12,420) (10,701) PGM Saleable Mined ounces excluding ounces ore purchases oz 1,200,244 1,280, ,913 1,340,678 1,174,776 Metals-in-concentrate before concentrate purchases oz 1,270,178 1,409, ,746 1,398,623 1,254,938 Refined ounces oz 1,440,724 1,447, ,094 1,336,109 1,349,802 Metals-in-concentrate including concentrate purchases oz 1,278,607 1,420, ,701 1,404,603 1,259,585 Cost of production Mining R/oz (7,627) (7,349) (9,261) (6,373) (6,026) Concentrating R/oz (1,299) (1,228) (1,567) (1,051) (1,073) Smelting and refining 18 R/oz (1,020) (985) (1,269) (925) (877) Shared services R/oz (564) (570) (1,087) (661) (639) Management and marketing services R/oz (237) (207) (355) (173) (228) R/oz (10,748) (10,339) (13,538) (9,182) (8,843) % increase in Mining % (3.8)% 20.6% (45.3)% (5.8)% (12.4)% unit cost of Concentrating % (5.8)% 21.6% (49.2)% 2.1% (11.8)% production Smelting and refining 18 % (3.6)% 22.4% (37.3)% (5.4)% (5.4)% Shared services % 1.1% 47.5% (64.5)% (3.3)% (27.2)% Management and marketing services % (14.8)% 41.7% (104.9)% 24.1% (41.9)% % (4.0)% 23.6% (47.4)% (3.8)% (13.1)% Footnotes: 15. Capital expenditure is the aggregate of the purchase of property, plant and equipment and intangible assets (includes capital accruals and excludes capitalised interest). 16. Includes 1B Shaft. 17. Exchange rates are calculated using the market average daily closing rate over the course of the period. 18. Comprises of Smelting and Refining costs as well as direct Process Operations shared costs. 19. It should be noted that with the implementation of the revised operating model in 2014 and 2015 the cost allocation between business units has been changed and, therefore, whilst the total is on a like-for-like basis, individual line items are not totally comparable.

9 Lonmin Plc / 195 Mineral Resources and Mineral Reserves 2016 Mineral Resource Main features of the Lonmin Mineral Resources as at 30 September 2016: Attributable Mineral Resources were million ounces of 3PGE+Au in 2016, a decrease of 2.3 million ounces from Revisions to the South African Mineral Resource estimates were confined to the Marikana and Pandora properties. The Mineral Resources at Marikana (excluding tailings) decreased by 2.35 million ounces 3PGE+Au in This is attributed to the net effect of a decrease in the Merensky Mineral Resources (0.65 million ounces) and a decrease of the UG2 Mineral Resources (1.71 million ounces). The Merensky Measured and Indicated Mineral Resources decreased by 0.51 million ounces and the Inferred Mineral Resources decreased by 0.14 million ounces, due to reevaluation after consideration of depletions. The UG2 Measured and Indicated Mineral Resources decreased by 1.75 million ounces mainly due to depletions and reassessment of geological losses. The Inferred Mineral Resource increased by 0.05 million ounces as a result of orebody re-evaluation. The Pandora Mineral Resource increased by 0.04 million ounces of 3PGE+Au, the result of reassessment of white areas previously excluded from the Mineral Resource, which was offset by 0.06 million ounces of mining depletion. The Marikana Tailings, Akanani, Limpopo and Loskop Mineral Resources were unchanged during There were no revisions to the non-south African platinum Mineral Resources, the Denison 109 Footwall deposit in Canada was unchanged in The Mineral Resources for the Bumbo base metal and gold in Kenya were sold to the joint venture partner in Attributable 3PGE + Au in Mineral Resource million ounces Marikana Akanani Limpopo Pandora JV Limpopo Baobab Shaft Loskop JV Tailings Dams Sudbury PGM JV Mineral Reserves Main features of the Lonmin Mineral Reserves as at 30 September 2016: Attributable Mineral Reserves were 31.7 million ounces of 3PGE+Au in 2016, a decrease of 4.6 million ounces from Marikana and 0.1 million ounces from Pandora with The Marikana tailings were unchanged. The Marikana attributable Mineral Reserves for 2016 are 30.1 million ounces of 3PGE+Au, a decrease of 4.6 million ounces with a corresponding decrease of 32.9 Mt ore material. The change is attributed to mining depletion at Marikana and mostly the reconfiguration of the ore extraction at Hossy Shaft. The Proved Mineral Reserve category (Marikana and Pandora) decreased by 0.2 million ounces of 3PGE+Au. The further reassessment of the Hossy Shaft operations has resulted in a further removal of 13.1 Mt of ore material in 2016 through the reconfiguration of the Hossy Shaft block. The Pandora attributable Mineral Reserve of 0.8 million ounces 3PGE+Au decreased by 0.1 million ounces due to depletion and re-evaluation. No Mineral Reserves continue to be declared for Limpopo, and there were no revisions thereof in Attributable 3PGE + Au in Mineral Reserve million ounces Marikana Akanani Limpopo Pandora JV Limpopo Baobab Shaft Loskop JV Tailings Dams Sudbury PGM JV / Strategic Report 02 / Governance 03 / Financial Statements 04 / A Deeper Look 05 / Shareholder Information

10 / 196 Lonmin Plc Mineral Resources and Mineral Reserves PGE Mineral Resources (Total Measured, Indicated & Inferred) 1, 4, 5, 6 30-Sep Sep PGE + Au 3PGE + Au Area Mt g/t Moz Pt Moz Mt g/t Moz Pt Moz Marikana Limpopo Limpopo Baobab Akanani Pandora JV Loskop JV 3, Sudbury PGM JV 3, Tailings Dam 3, Total Resource , Footnotes: 1. All figures are reported on a Lonmin Plc attributable basis, the relative proportions of ownership per project being shown in the Key Assumptions section of this report. (Mineral Resources are reported inclusive of Mineral Reserves.) 2. Limpopo 2 excludes Baobab shaft. 3. Loskop and Sudbury PGM JV exclude Rh, due to insufficient assays, and therefore 2PGE+Au are reported. 4. Tailings Dam exclude Au, due to assay values below laboratory detection limit, and therefore are reported as 3PGE. 5. Mineral Resources are reported Inclusive of Mineral Reserves. 6. Quantities and grades have been rounded to one or two decimal places, therefore minor computational errors may occur. PGE Mineral Reserves (Total Proved & Probable) 1, 3 30-Sep Sep PGE + Au 3PGE + Au Area Mt g/t Moz Pt Moz Mt g/t Moz Pt Moz Marikana Pandora JV Tailings Dam Total Reserve Footnotes: 1. All figures are reported on a Lonmin Plc attributable basis. 2. Tailings Dam exclude Au, due to assay values below laboratory detection limit, and therefore are reported as 3PGE. 3. Quantities and grades have been rounded to one or two decimal places, therefore minor computational errors may occur. Further details can be found in the full Mineral Resource and Mineral Reserve Statement available on the Company s website,