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Analyst Visit
17 October 200617 October 2006
PLATINUM
WE DO IT BETTERWE DO IT BETTERWE DO IT BETTER
Slide 2 of 18 Analyst Visit – 17 October 2006 PLATINUM
Agenda
• INTRODUCTION Gerhard Potgieter (ARM Executive : Operations)(ARM Executive : Operations)
• PROJECT REVIEW Mark Brasler (Project Leader)(Project Leader)
• OPERATIONS REVIEW Nico Muller (Business Leader)(Business Leader)
• SITE VISIT
• Underground Anthony Durrant (Mining Leader)(Mining Leader)
• Concentrator Francois Vermeulen (Process Leader)(Process Leader)
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Slide 3 of 18 Analyst Visit – 17 October 2006 PLATINUM
Gerhard PotgieterARM Executive : Operations
13 October 2006
IntroductionIntroduction“Doing it Better . . . . . ”
Slide 4 of 18 Analyst Visit – 17 October 2006 PLATINUM
Introduction
• Joint Venture • Shareholder Agreement• Management Agreement• Active Participation
• Learning from previous projects
• Project in execution / construction site
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Slide 5 of 18 Analyst Visit – 17 October 2006 PLATINUM
Fundamentals
• Owner Mining • Trial mining validated feasibility assumptions• Trackless room & pillar mining
• Outsource Concentrator & Tailings Operations• Specialist / non core services
• Undertaking to employ local labour
Slide 6 of 18 Analyst Visit – 17 October 2006 PLATINUM
Mark BraslerProject Leader Two Rivers Platinum
13 October 2006
Project ReviewProject Review“Doing it Better . . . . . ”
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Slide 7 of 18 Analyst Visit – 17 October 2006 PLATINUM
Burgersf
AngloPt / ARM(Modikwa)
Thorncliff / AngloPt(Mototolo Joint venture)
AngloPt(Atock Mine)
AngloPt(Twickenham)
ARM / Implats Two Rivers
Eastern Plats Rhodium Reefs
Slide 8 of 18 Analyst Visit – 17 October 2006 PLATINUM
Mine, plant & infrastructure• Mining
• Surface Stockpile 1 200 000 tons (October 2006)• Underground 185 000 tpm (LOM)• Open pit (north) 40 000 tpm (Years 2 - 5)• Adit 25 000 tpm (Years 5 - 13)• North Adit 40 000 tpm (LOM)
• Concentrator 2.5 M tpa MF2
• 82.5 % recovery @ 4E 3.49 g/t• Design 50% waste / No DMS / optical sorting• Toll smelt & refine @ IRS & Springs
• Infrastructure• Water supply of 2.9 million m3/a secured
Delayed
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Slide 9 of 18 Analyst Visit – 17 October 2006 PLATINUM
North Decline
Slide 10 of 18 Analyst Visit – 17 October 2006 PLATINUM
Project Focus
• To implement the capital works program within the approved budget
• To advance the concentrator ramp up schedule
• To establish a platform to sustain and improve feasibility parameters
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Slide 11 of 18 Analyst Visit – 17 October 2006 PLATINUM
Milestone Dates• Purchase land & mineral rights Dec 01• EMPR & mining license approved Mar 03• WULA approved Dec 03• Trial Mining & access development Jan 04• Project submission to ARM & Implats Dec 04• Project release, commence construction Jun 05• Conclude Bank Funding Agreement Sep 05• Commence concentrator commissioning Aug 06• Concentrator at full capacity 4th Qtr 06• North Decline Construction Mar 07• Commercial operations Apr 07• Underground Mining at 185 000 tpm Dec 07
Slide 12 of 18 Analyst Visit – 17 October 2006 PLATINUM
Project Finance
• Project Funding R 1.3 billion• 50% bank funded
• 50% ABSA / 50% Nedcor• 50% shareholder / equity funded
• 55% ARM / 45% Implats
• Asset Finance R 0.3 billion• Mining Fleet (ABSA)• Lydenburg Housing Development (Nedcor)
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Slide 13 of 18 Analyst Visit – 17 October 2006 PLATINUM
Resourcing
• EPCM Services• Concentrator & Infrastructure (DRA)
• Major contracts awarded• Mining access development (GLTA- Mining)• FFE – Mills• GLTA Civils – Civil construction• Cosira – Structural steelwork & Mechanical erection • Outokumpu – Thickeners & Float Cells• ECMP - Tailings Dam• Rooimech – Conveyors• Larox – Concentrate filter• Wade Walker – Portal electrical & instrumentation scope
• Lydenburg Housing development• Mvela Phanda Construction / Sunset Bay Partnership
Slide 14 of 18 Analyst Visit – 17 October 2006 PLATINUM
Capital Implementation Progress (October 2006)
• + 95% complete (mine & concentrator)• Commitments R 1.2 billion
• Weighted BEE / HDSA commitment 32 %• Expenditure R 1.1 billion
• Site labour peak• Mine & Concentrator 2 200 • Lydenburg Housing 700
• Project budget saving of ±10%
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Capital Implementation : Achievements
Team successExecutive / Shareholders / Project / Operations / Contractors / ….Trust in an empowered project team (C1 / satellite office)
Realistic implementation parametersMining
BenchmarkingTrial Mining established the foundation to succeed
Proved mining fundamentalsAdvanced primary access development Stockpile Accumulation (250 000 to 1 200 000 tons)
Optimized designs
Concentrator Schedule15 months (not necessarily repeatable with current market up-tick)
Operational flexibilityFace redundancy (30% - 100%)Mill capacity (225 000 – 260 000 tpm)
Exceeded most project objectivesSafety / Capital / Schedule / Commissioning
PLATINUM
Slide 16 of 18 Analyst Visit – 17 October 2006 PLATINUM
Lydenburg HousingDevelopment
PLATINUM
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Slide 17 of 18 Analyst Visit – 17 October 2006 PLATINUM
Slide 18 of 18 Analyst Visit – 17 October 2006 PLATINUM
Capital Implementation ChallengesExpedite the concentrator ramp-up
Girth gear / Mill silos / Mill gearbox lubrication / Primary mill discharge grate / …Crusher hold down bolts / Tailings barge power supply / Tailings flexible hoses / …Delivery of Strategic Spares …
Ongoing capital implementation scope (Focus on opening the revenue pipeline)Mining service extensions below 4 levelDeluge systemENGEN Diesel fuelling facilities (surface & underground)Surface compressor plantRichmond / Plant / Portal roadsLydenburg housing (10/90/180 – 9 months behind planned schedule)
Manage handover to new operations teamManage capital growth
Manage attrition within the project team (industry skills shortage)
Project close out reporting
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Slide 19 of 18 Analyst Visit – 17 October 2006 PLATINUM
Nico MullerBusiness Leader Two Rivers Platinum
17 October 2006
Operations ReviewOperations Review“Doing it Better . . . . . ”
Slide 20 of 18 Analyst Visit – 17 October 2006 PLATINUM
GeologyGeology
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Slide 21 of 18 Analyst Visit – 17 October 2006 PLATINUM
Burgersf
AngloPt / ARM(Modikwa)
AngloPt(Der Brochen)
AngloPt(Atock Mine)
AngloPt(Twickenham)
Aquarius (Everest South)
Impala (Marula)
106 cm572 cmg/tPt:Pd=1:1
Steelpoort Fault
185 cm781 cmg/tPt:Pd=5:3
ARM/ImplatsTwo Rivers
Salene Mining(Rhodium Reefs)
Slide 22 of 18 Analyst Visit – 17 October 2006 PLATINUM
UG2 Reef Section : North - South
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Slide 23 of 18 Analyst Visit – 17 October 2006 PLATINUM
4 128 16 (6E g/t)
Typical 6E Grade Profile
Slide 24 of 18 Analyst Visit – 17 October 2006 PLATINUM
Geology Base Parameters
• Average Dip : 10° West
• Channel Width : ≥ 1.5m
• Mining Cut : 1.85m – 2.60m
• Grade : 3.49 g/t (4E)
• Geological Losses : 30% (14%)• Potholes : 15% (8%)• Faults & Dykes : 14% (6%)• Repl. pegm. : 1%
Mining Method :
Mechanized Bord & Pillar
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Slide 25 of 18 Analyst Visit – 17 October 2006 PLATINUM
Resource & Reserve StatementAs at May 2006
Moz MozPt Pd Rh Au (3E+Au) (5E+Au) Pt 6E
UG2 ResourceMeasured 13.05 2.90 1.70 0.50 0.04 5.17 6.27 1.18 2.54
Indicated 46.23 2.01 1.30 0.35 0.04 3.70 4.43 2.89 6.37
Inferred - - - - - - - - -
Total 59.28 2.21 1.39 0.38 0.04 4.02 4.83 4.07 8.91
UG2 ReservesStockpile 1.00 2.04 1.15 0.38 0.03 3.60 4.35 0.06 0.14
Proven 9.50 2.04 1.15 0.38 0.03 3.60 4.35 0.60 1.29
Probable 29.80 1.86 1.20 0.35 0.03 3.44 4.11 1.72 3.81
Total 40.30 1.91 1.19 0.36 0.03 3.49 4.19 2.39 5.23
Merensky ResourcesMeasured - - - - - - - - -
Indicated 18.7 2.06 - - - 3.34 3.55 1.20 2.06
Inferred 3.9 1.95 - - - 3.16 3.36 0.24 0.41
Total 22.6 2.04 - - - 3.31 3.52 1.43 2.47
Mt Grade (g/t)Category
Slide 26 of 18 Analyst Visit – 17 October 2006 PLATINUM
MiningMining
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Slide 27 of 18 Analyst Visit – 17 October 2006 PLATINUM
N
Bulk Sample Shaft
MINE LAYOUT
100m
PLATINUM
Slide 28 of 18 Analyst Visit – 17 October 2006 PLATINUM
Production
• Mining Reserve 40 Mt• Life of Mine +16 Years
• Main Decline 185 ktpm• North Decline 40 ktpm
• Other Resources• Open Pit• Merensky• Toll Feed• Adjacent resources
• Average Annual Sales 220,000 Oz PGEs
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Slide 29 of 18 Analyst Visit – 17 October 2006 PLATINUM
Mining Fleet
Activity Machinery TotalsFace Drilling 1X AXERA LP D/BOOMER
8 X ATLAS S1L DRILL RIG 9
Loading 1 X TORO 007 LHD (4659)1 X WAGNER ST 600 LHD1 X TORRO 400 LHD15 X LHD 115 LP1 X WAGNER ST400 LHD1 X GHH LHD 20
Rock Bolting 8 X ROBOLT LP BOLTER1 X DBT Bolter 9
Logistics and charging 1 X Fermel UV17 X SECO UV 42 18
Personnel Transport 1 X Fermel Jeep5 X Toyota 4X4 LDVs 6
Slide 30 of 18 Analyst Visit – 17 October 2006 PLATINUM
Production Crews
• Mining Crews : 11• 1xMiner• 1xTeam leader• 1xDrill rig operator• 1xRoofbolter operator• 1xUV operator• 2xLHD operators• 2xPTV• 2xtip attendants
• Work Arrangement• Shift – 9 hrs• 2 x Shifts per day• 2 x 12m panels per shift• 3m advance per blast• 500 t / crew / shift• 45 t / man / shift• 20,500 t/ section / month• 11 day fortnight• Conops options
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Slide 31 of 18 Analyst Visit – 17 October 2006 PLATINUM
Mining LayoutEnd of September 06
Level 1Level 2Level 3Level 4
Level 5Level 6
Level 7Level 8
Conveyor Decline : Complete
Ledging : 758m out of 930m (81%)
Reef Declines : 907m out of 1038m (87%)
GLTA 2
GLTA 1
GLTA 3GLTA 4
TRP 1&2
Slide 32 of 18 Analyst Visit – 17 October 2006 PLATINUM
Decline Cross Section
560m
430m
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Analyst Visit – 17 October 2006
ROM TONSROM TONS
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
2004
2005
Jul 0
5
Aug
05
Sep
05
Oct
05
Nov
05
Dec
05
Jan
06
Feb
06
Mar
06
Apr 0
6
May
06
Jun
06
Jul 0
6
Aug
06
Sep
06
Oct
06
Nov
06
Dec
06
Jan
07
Feb
07
Mar
07
Apr 0
7
May
07
Jun
07
2008
2009
2010
Tons
History Actual 5Y Plan Plan Forecast
Analyst Visit – 17 October 2006
Reef StockpileReef Stockpile
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
2004
2005
Jul 0
5
Aug
05
Sep
05
Oct
05
Nov
05
Dec
05
Jan
06
Feb
06
Mar
06
Apr 0
6
May
06
Jun
06
Jul 0
6
Aug
06
Sep
06
Oct
06
Nov
06
Dec
06
Jan
07
Feb
07
Mar
07
Apr 0
7
May
07
Jun
07
2008
2009
2010
Tons
History Actual 5Y Plan Plan Forecast
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Slide 35 of 18 Analyst Visit – 17 October 2006 PLATINUM
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
Tons
Planned 193,829 256,806 658,978 1,026,388 1,065,860
Actual 179,598 280,114 702,503 1,064,881 1,170,342
Development Ledging Stoping ROM Stockpile
Overall Production PerformanceOverall Production PerformanceJul 05 Jul 05 –– Sep 06Sep 06
Slide 36 of 18 Analyst Visit – 17 October 2006 PLATINUM
Concentrator PlantConcentrator Plant
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Slide 37 of 18 Analyst Visit – 17 October 2006 PLATINUM
Concentrator Plant
• Plant Commission• Commissioning started ahead of schedule• Critical commissioning challenges resolved• Awaiting final strategic spares• Full throughput by end of year• Early recoveries higher than planned
• General• Contractor operations (EPC)• 82 staff (contractor & mine)• Conops• 2 x 12hr shifts per day• 4 on 4 off cycle
Slide 38 of 18 Analyst Visit – 17 October 2006 PLATINUM
Commissioning Challenges
Mill Silo Damage
Mill Discharge Screen
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Slide 39 of 18 Analyst Visit – 17 October 2006 PLATINUM
Plant Commissioning
Mill Gearbox Bearing
Girth Gear
Slide 40 of 18 Analyst Visit – 17 October 2006 PLATINUM
Plant Performance
CONCENTRATOR PLANT
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
22 J
ul
29 J
ul
05 A
ug
12 A
ug
19 A
ug
26 A
ug
02 S
ep
09 S
ep
16 S
ep
23 S
ep
30 S
ep
07 O
ct
14 O
ct
Mill
ed T
ons
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Slide 41 of 18 Analyst Visit – 17 October 2006 PLATINUM
GeneralGeneral
Slide 42 of 18 Analyst Visit – 17 October 2006 PLATINUM
Safety Performance
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2200
2400
Number of employees 193 887 1196 1633 1768 1833 2070 2270 2077 1976 1218 1177
Minor Injuries 1 3 5 3 9 8 12 5 12 8 7 3
Serious Injuries 0 1 1 0 2 0 2 0 0 0 2 0
Fatals 0 0 0 0 0 0 0 0 0 0 0 0
LTIFR 0 3.47 2.67 1.02 1.27 1.10 1.25 1.39 1.22 2.6 2.78 2.27
LTIFR Plan 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 4.5 4 3.5
2003 2004 2005 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 2007 2008 2009
Project To DateFatalities = 0
Fatality Free Shifts = 621,002
LTIFR = 1.22
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Slide 43 of 18 Analyst Visit – 17 October 2006 PLATINUM
Operating CostJul 06 – Sep 06
2007 Financial Year : 1st Quarter
Description UnitYTD
Actual Plan Var
Operating Cost R mil 72.0 94.2 22.2
Mining R mil 35.7 37.8 2.1
Process R mil 19.0 31.1 12.1
Other On Mine Costs R mil 17.3 25.3 8.0
ROM Tons kt 253 338 -86
Cash Operating Cost R/t 285 278 -7
Notes - Other On Mine Costs excludes change in value of unsold stock - Increase in unit costs due to lower production (strike) - Unit operating costs reflect current costs during ramp up - not steady state costs
Slide 44 of 18 Analyst Visit – 17 October 2006 PLATINUM
Industry Cost Curve
0
100
200
300
400
500
600
700
WLT
R (A
MS)
CTRP
(AQP
)
Ever
est(A
QP)
KPM
(AM
S)
Mim
osa
(AQP
)
Aqua
rius
Tota
l (AQ
P)
Mim
osa
(IMP)
*
KPM
(AQP
)
Mar
ikana
(LON
)
Impa
la Le
ase
(IMP)
Impla
ts T
otal
(IMP)
Two
Rive
rs P
latinu
m
Lonm
in (L
ON)
Zim
plats
(IM
P)*
PPRu
st (A
MS)
Zim
plats
(ZIM
)
Anglo
Plat
Tot
al (A
MS)
Limpo
po (L
ON)
Union
(AM
S)
Aman
delbu
lt (A
MS)
Mar
ula (I
MP)
Mar
ikana
(AQP
)
BRPM
(AM
S)
Rust
enbu
rg (A
MS)
Mod
ikwa
(AM
S)
Mar
ikana
(AM
S)
Lebo
wa (A
MS)
North
am (N
HM)
ZAR/
ton
ZAR/ton IRS ZAR/ton ZAR/tonMerrill Ly nch, September 2006
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Slide 45 of 18 Analyst Visit – 17 October 2006 PLATINUM
• Total labour plan = 1000 people• 650 Mine employees• 350 Contracted out services
• Employment of local labour• To the extent possible• Initial skills through contracting
IMIU - 30 March 2006
Operational Labour
Slide 46 of 18 Analyst Visit – 17 October 2006 PLATINUM
Licensing & Permits
• North Open Pit• Application submitted in 2003• Rejected in May 2006• Appeal process
• North Decline• Full application required & well advanced• Scoping document• Authorities & I&A Parties consultation concluded• Submission date : 27 October
• New Order Mining Rights• Expected submission date : Feb 07• Technical skills (artisans, foreman)
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Slide 47 of 18 Analyst Visit – 17 October 2006 PLATINUM
The Way Forward
• Production• Recruitment & Training• Decline Extension• Additional Fleet• North Decline• Full Calendar Operations• Continuous Improvement (LTIFR, R/t, t/man, . . . )
• Skills Development• UG Training Section• Training Fleet• Simulators• Learnership Programs• Regional Training Infrastructure
• Concentrator Plant• Tailings dam return water• Critical Spares Delivery• Process Optimisation (recovery, availability, throughput, . . . .)
Slide 48 of 18 Analyst Visit – 17 October 2006 PLATINUM
The Way Forward
• Licensing & Permits• North Decline Environmental Authorisation (Nov 06)
• New Order Mining Rights (Feb 07)• Local Communities
• Skills Development Programs• Local Economic Development (SMME’s)
• Management Systems• ERP• Production monitoring• SHEQ
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Slide 49 of 18 Analyst Visit – 17 October 2006 PLATINUM
Thank YouThank YouQuestions ?Questions ?