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WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244...

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MUCH ACHIEVED WELL REPOSITIONED …. 14 NOVEMBER 2016 - FINAL RESULTS PRESENTATION
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Page 1: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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MUCH ACHIEVED WELL REPOSITIONED ….

14 NOVEMBER 2016 - FINAL RESULTS PRESENTATION

Page 2: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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2

Agenda

Key Highlights 1

Financial Performance 2

Operational Performance 3

Macro Environment 4

Conclusion and Guidance 5

Page 3: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

KEY HIGHLIGHTS BEN MAGARA CHIEF EXECUTIVE OFFICER

Page 4: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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More colours Main colours Key Highlights: Much Achieved. Well Repositioned

4

Sales of 735,747 Platinum ounces, exceeded the sales guidance of 700,000 ounces

The innovative smelter clean-up project released 73,186 ounces of Platinum during the year, to make up for the shortfall in mined ounces

The Other Precious Metals (OPM) plant commissioned during the year, using improved latest technology, contributed to additional release of Rhodium and Iridium

Exceeded sales guidance

Net cash of $173 million at 30 September 2016 from $69 million after the first quarter

Liquidity of $537 million at 30 September 2016 (gross cash plus undrawn facilities)

Improved net cash position

Dec'15 Sept'16

422 537

Liquidity ($m)

Cost reductions ahead of schedule with R1.3 billion achieved – 86% ahead of promised annual target of R700 million

Underlying costs decreased by 3.2% to R14.1 billion

Cost reduction ahead of schedule

A successful reorganisation, with 19% reduction in headcount

Reskilling and redeployment into more productive roles Reorganisation

completed

Completed Rights Issue, strengthened our balance sheet and renewed bank facilities Balance sheet strengthened

Operating profit of $7 million versus 2015 operating loss of $134 million Enhanced

profitability

Page 5: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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More colours Main colours Delivering on Our Business Plan: Repositioned the Business to Generate Cash

LTIFR improved by 8.1% to 4.97. Regrettably four of our colleagues were fatally injured. Focus on safety improvements remains a priority

Experiencing a reduction in the duration and frequency of Section 54 stoppages and more localised application of the stoppages, based on better collaboration between shaft management, the DMR and the unions

Safety improvements

Generation 2 shafts production 4.0% up on prior year

Decline in high cost Generation 1 shafts production as planned

Refined production of 741,890 Platinum ounces achieved

Production 3,497 2,244

7,752 8,061

FY'15 FY'16

G1

G2

Tonnes mined, kt

5

Completed peaceful and realistic multi-year wage agreement on 31 October 2016, reflecting the maturing of relationships and reducing risk

Construction of employee housing in progress

Reviewing our employee housing strategy

Delivered R1.6 billion procurement deals for the Bapo Ba Mogale community

Employees, other stakeholders and social licence to

operate

Post year end, Lonmin acquired AAP’s 42.5% stake in the Pandora JV. An attractive option for development. Consolidation of shallow and high-grade mineral resource, which is contiguous with our operations. Relies on our mining and processing infrastructure. Pandora JV made an operating loss of R109 million in financial year 2016, and Lonmin 50% share is reflected in our 2016 accounts. Lonmin received a contribution of R117 million from ore purchase agreement, which offsets JV loss

Acquisition of Pandora joint

venture

Page 6: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

FINANCIAL PERFORMANCE BARRIE VAN DER MERWE CHIEF FINANCIAL OFFICER

Page 7: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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Cash Generation

7

Page 8: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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Balance Sheet Strength and Liquidity

8

Net cash position at 30 September 2016 of $173 million with liquidity of $537 million

Rights Issue in November 2015 raised net proceeds of $373 million

Bank debt facilities mature in May

2020 (assuming Lonmin exercises its option to extend by one year)

• Revolving Credit Facility totalling $71 million and a $150 million term loan

• Revolving Credit Facility totalling R1,980 million ($135 million)

320 219

322

203 215 320

422 537

Sep'15 Dec'15 Sep'16

Gross Cash Undrawn facilities

Liquidity ($m)

(185)

69 173

Sep'15 Dec'15 Sep'16

Net (debt) / cash ($m)

Page 9: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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Cost Performance

9

Page 10: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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Unit Cost Performance 8

,51

5kt

7,6

42

kt

53

4o

z

48

6o

z

53

7ko

z

52

2ko

z

54

4ko

z

52

5ko

z

R10

,1m

R9.6

m

R1,0

50

m

R6

42

m

$7

7m

$9

1m

10,339

607 100 14 11,060 (156)

907 (1,063)

10,748

7,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000

15,000

FY15 CPI @ 6.5% Labour aboveCPIIncl

Contractors

Power / waterabove CPI

Sub-Total Grade andRecovery

Volume Cost FY16

R/o

z

-7.0% 2.8%

-4.0%

10

Page 11: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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To update

11

Underlying Operating Profit

1

Page 12: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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12

Capital Expenditure

1

132 -14

118 2 -26

-3 -2

89

50

70

90

110

130

150

Guidance FX RestatedGuidance

Mining Concentrating Smelting &Refining

Other Actual

USD

m

As a direct result in the delay of the Bulk Tailings

treatment project ($19m)

and the Rowland Pump station ($8m)

Weaker rand than orginally anticipated

R14.31 versus budget

of R12.82

Page 13: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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Summary of Financial Results

13

Units 2016 2015

Platinum sales koz 736 752

Rand Basket Price R/oz 11,030 10,207

Revenue $m 1,118 1,293

Underlying EBITDA $m 109 21

Underlying Operating Profit/(Loss) $m 7 (134)

Special costs $m (329) (1,884)

Operating Loss $m (322) (2,018)

Underlying LPS cents (35.6) (194.5)

Basic LPS cents (137.0) (3,437.6)

12 months to 30 September

Page 14: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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In Conclusion

Cash of $104 million generated from Quarter 2 through to Quarter 4 Cash generated

14

Cost reductions ahead of plan, but becoming increasingly challenging Cost reductions

Capital structure stabilised and liquidity levels adequate Capital structure

stabilised

Page 15: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

OPERATIONAL PERFORMANCE BEN MOOLMAN CHIEF OPERATING OFFICER

15

Page 16: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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16

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2011 2012 2013 2014 2015 2016

Lost time injury frequency rate

Safety

Safety remains work in progress until we achieve Zero Harm

Improvement

No. of fatal incidents

(12 Month Rolling)

Comparison of platinum peers – LTIFR

We remain determined to regain our leading position in industry safety by improving our overall safety performance, which is currently not acceptable

Four employees fatally injured. We extend our deepest condolences to their families and friends

LTIFR improved by 8.1% to 4.97 at 30 September 2016 from 5.41 at 30 September 2015

Generation 2 shafts performed well, except for Rowland with two of the fatalities

• 4B/1B shaft achieved 10 million fatality free shifts and won the JT Ryan Safety Award

• K3 shaft achieved 6 million fatality free shifts

• Saffy shaft achieved 3 million fatality free shifts

Section 54 stoppages – more localised and reduced in duration and frequency in the last quarter

0.0

2.0

4.0

6.0

8.0

Jan-13 Dec-13 Nov-14 Oct-15 Sep-16

Lonmin Peer 1 Peer 2 Peer averagePt industry

Page 17: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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More colours Main colours Delivering on Our Business Plan: Reducing High-Cost Production on Track

17

Shafts Status

Ge

ne

rati

on

2

Ge

n 3

G

en

era

tio

n 1

Shaf

ts o

f th

e f

utu

re

69%

FY 2016 FY 2015

78%

K4 N/A • Long term option – remaining on care and maintenance - 49

K3 • Continued operational performance 2,687 2,713

Rowland • Continued operational performance 1,731 1,872

Saffy • Continued operational performance 2,055 1,758

4B • Continued operational performance 1,588 1,409

Total Gen 2 8,061 7,752

E2, E3 (incl. JV 100%)

• Delivering operational performance 827 1,002

E1,W1 • Under contract mining – annual re-evaluation 304 328

Hossy • Orderly closure to care and maintenance planned by end of FY17 712 953

Newman • Lonmin own production stopped Oct 2016. Under contract mining 346 765

1B • 1B – Closed Oct 2015. On care and maintenance 6 220

Open cast • Merensky pit closed. UG2 low cost ounces opened – to close in 2017 49 230

Total Gen 1/OC 2,244 3,497

Focus

Tonnes mined (kt)

Generation 2 contribution to total tonnes mined

Restructuring programme on track - focusing on core Generation 2 shafts in an oversupplied market

4%

36%

Page 18: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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Mining Performance Being Addressed

0

2

4

6

8

10

12

14

Generation 2 Generation 1 & OpenCast

Total

'00

0 t

on

nes

FY 2015 Act FY 2016 Act 2016 BP 2017 BP

Tonnes mined

Immediately Available Ore Reserves (months)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

K3 Rowland Saffy 4B/1B

2015 2016

Generation 2 production

• 4% higher than prior year

• 11.6% (1.1 million tonnes) lower than CPR (Competent Persons Report) Business Plan (BP) 2016

Production for 2016 is in line with BP for 2017

Reorganisation, redeploying and reskilling

Section 54 stoppages in the first nine months

Higher absenteeism also reduced planned blasts

Additional stoping crews to take advantage of Immediately Available Ore Reserves (IAOR)

18

Page 19: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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Productivity Improvements

Generation 2 shafts

• Productivity improved by 5% to 5.9 from 5.6 square meters per mining employee

• Stoping crew productivity (square meters per crew) improved by 7%

• Successful rationalisation of the workforce by 19%

2017 will be the first full settled year after the reorganisation

Additional stoping crews can now be deployed at

Generation 2 shafts to meet BP 2017

Various initiatives being implemented in the Business Support Office to improve productivity and mining performance

2.0

3.0

4.0

5.0

6.0

7.0

FY12 FY13 FY14 FY15 FY16

Squ

are

met

res

per

man

•Generation 2 Productivity

28,000

32,000

36,000

40,000

FY12 FY13 FY14 FY15 FY16

Nu

mb

er

•Total Labour Reduction

19

Page 20: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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Initiatives to Address Mining Performance

• To improve the output of poor performing half levels

• Fully implementing the Theory of Constraints (TOC) management model on the half levels

• Establishing a labour skills buffer on selected production half levels

• Implementing systems, processes and behaviours that impact on people not being available at the working faces

• Ensure that the right people are present on a daily basis in order that daily production targets can be achieved

• Lost blasts due to absenteeism will be reduced and production for the half level targeted to increase by at least 15%

• To empower the front line supervisors so that they can provide their team members with the means and ability to perform their work, and also be able to hold them accountable for what they need to deliver

• Improved accountability at the mining faces is expected to translate into improved safety performance as well as improved production output

Empowerment of Front Line Supervisors

Reducing Absenteeism

Theory of Constraints

Framework – Labour Buffer

20

Page 21: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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Operational Excellence in Processing

21

OPM Plant

PGM and underground concentrator recovery rates

82.4%

85.0%

86.2%

87.2%

89.6%

86.1%

87.0% 87.0% 86.8% 86.7%

2012 2013 2014 2015 2016

Instantaneous PGM Recoveries Underground Concentrator Recovery

Excellent processing performance, realising benefits of innovation and ongoing optimisation and improvement projects

Concentrators achieving consistent levels of PGM recoveries. Industry leading recovery at 87.0%

Smelter clean-up (of past incidences) released 73,186 Platinum ounces, boosting the instantaneous recovery rate to 89.6%

The OPM plant commissioned. Release of 25,280 ounces of Rhodium and 13,068 ounces of Iridium

Overall permanent pipeline reduction

Page 22: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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Operational Excellence in Processing (continued)

22

Smelter Furnaces

(One & Two)

Base Metal Refinery

Precious Metal

Refinery

Ounces (000)

Ounces (000)

Ounces (000)

Capacity per annum 1,135 1,242 1,500

Platinum produced in 2016

742 742 742

Capacity utilisation in 2016

65% 60% 49%

Processing capacity Our processing facilities have stabilised and are operating efficiently

• Concentrators are more efficient

• Furnaces at steady state – Pyromet back-up

• Improvements at Precious Metal Refinery

We continue with various initiatives to fill the pipeline and use the excess capacity

As part of these efforts, and in line with our focus on low cost ounces and near term cash, projects include

• The Bulk Tailings Treatment (BTT) project 29,000 Platinum ounces per year over a seven-year period, with commissioning and ramp up to full production planned for FY 2018

• Toll treating contract with Jubilee Platinum Plc. Commencing in FY 2017, expected to deliver 17,000 Platinum ounces per year

Actively pursuing opportunities to do more

Page 23: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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Right-Sizing Capex to Maintain Production Profile

23

540 562

198 213

326 432

103

414

101

159

2016 2017

R million

Others BTT

Concentrating & Processing (Excl BTT) Other mining

Generation 2

1,268

1,780

Capex spend Capex optimised to focus on our key Generation 2 shafts to maintain production profile, and on processing

Generation 2 shafts: Development of the MK2 resource.

Processing: BTT project which is third party funded

Planned capital expenditure limited to

• Required to satisfy regulatory and safety standards

• Essential sustaining capital expenditure and

• A limited number of development projects

Optimising the operational flexibility from the preserved IAOR at the Generation 2 shafts of 22.1 months

Social Labour Plan commitment of R500 million over 5 years

Page 24: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

MACRO ENVIRONMENT BEN MAGARA CHIEF EXECUTIVE OFFICER

Page 25: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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25

1608 Education Trust has first university graduate – Mandla Yawa

Bapo Ba Mogale community – R1.6 billion of procurement contracts

Maintaining our social licence to operate through securing the trust and acceptance of communities and stakeholders is material as they host our operations

Complex and dynamic socio-political and regulatory environment, and we have confidence in the institutions that safeguard our constitutional rights and we have solid relationships to navigate the environment

Our people and corporate

citizenship agenda

Completed conversion of legacy hostels

Construction of new apartments underway

Reviewing future employee housing strategy

Employee housing

Shared value creates shared vision

Page 26: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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Platinum Demand Analysis

• In the near term the negative sentiments towards diesel, while unhelpful, do not seem to impact demand. In India the new government position on diesel did impact diesel vehicle demand

• Long –term tighter emissions legislation will see demand for platinum continue to grow

Automotive

Other Industrial

26

• Despite the lower prices, which normally induces Chinese jewellery buying, demand is expected to contract as the consumers are now opting to spend on travel rather than luxury goods. The decrease in China was partially offset by healthy growth in India 23% and US of around 5%

• Targeted marketing programmes executed by the PGI could go a long way to mitigate the decline in jewellery demand

Jewellery

• Investors rekindle interest in platinum with aggressive ETF buying leading up to the end of September

• Growth in disposable income and healthier than expected economic conditions are driving demand from the investment sector

• Lower prices incentivised active bar and coin buying by the Japanese investors during 2016

• We continue to support the WPIC initiatives that stimulate existing and new investment products

Investment

• Demand for platinum in the chemical industry has grown more than a third in the past five years

• Petrochemical and glass demand remains cyclical and may remain flat after significant growth in 2015

• Growth in population and urbanisation continues to support the growth trend expected over the next decade

• Opportunities offered within the additive manufacturing space may see increased demand in the long-term

Subdued global market sentiment is driving the low price environment

Page 27: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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Platinum Supply Analysis

• Primary suppliers have mostly released above normal stocks on hand during 2016

• The perception of liquidity remains which dampens price rallies Inventories

27

• Supply from South Africa contracted in 2016 but it was offset by growth in Zimbabwe and North America

• Prior decade investment secured resources and reserves but a continued low price environment disincentivises the reactivation of mothballed shafts and projects. In the long run this may lead to severe fall in primary supply

Primary Production

• Lower prices in scrap steel dampened recycling

• Growth in platinum recycling was further muted due to consumers holding on to older vehicles for longer

Secondary Production

As labour conflict and social political risk reduce, continued low prices threaten supply

Page 28: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

CONCLUSION BEN MAGARA CHIEF EXECUTIVE OFFICER

Page 29: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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Conclusion

29 29 Much achieved. Well repositioned

Improved profitability, cash and liquidity

• Reorganisation has delivered R1.3 billion cost reduction

• Benefiting from maturing union relationships

• Peaceful restructuring and wage negotiations

Housing strategy being implemented

Lonmin now an efficient, lean organisation

• Solid base to drive essential mining production improvement initiatives

• IAOR of 22.1 months for generation 2 provides flexibility and headroom to increase production

• Will only spend on capex using cash generated from operations and third party funding

While market conditions remain tough, we have repositioned the business

• Not only to withstand the current low PGM price environment

• But also to seize opportunities to maximise value for shareholders and stakeholders

Successfully dealt with a series of challenges

Dec'15 Sept'16

422 537

Liquidity ($m)

Sept'15 Sept'16

(134)

7

Underlying Operating (loss)/profit ($m)

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FY 2017 Guidance

30

Platinum sales between 650,000 and 680,000 ounces

Unit costs to remain under pressure until evidence of sustained improvement in mining tonnes comes through – expected to be in the range of R10,800 to R11,300 per PGM ounce

Capital expenditure of R1.8 billion, including R400 million third party funding

• Management is very disciplined and rigorous and will not spend on capex except from cash generated or third party funding. We have the flexibility, using our capital portfolio optimisation model, to delay capex whilst ensuring our production is maintained

30 Our Mantra: Cash positive after capex in a low price environment

Guidance

Thank You

Page 31: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

QUESTIONS?

Page 32: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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APPENDICES

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Changes to the Management Team

33

Ben Magara (49) Chief Executive Officer BSc Eng (Hons), ADP (LBS) Ben joined the Company and Board as Chief Executive on 1 July 2013

Thandeka Ncube (48) Executive Sustainability and Transformation, Phembani Group B.Soc.Sc, MBA (Henley Business School) Thandeka works with Phembani’s investee companies advising on transformation and broad based empowerment

Mike da Costa (52) EVP Business Support Office BSc Engineering, MBA Mike joined Lonmin in September 2008 and has held a number of different roles in the company. He was appointed to his current role in July 2015

Barrie van der Merwe (40) Chief Financial Officer CA (SA) Barrie joined Lonmin and the Board as Chief Financial Officer on 17 May 2016

Ben Moolman (55) Chief Operating Officer BSc Engineering (Mining) Ben joined us in August 2014 to head up our newly established Business Support Office, was promoted to Chief Operating Officer in February 2015 and was subsequently appointed to the Board in June 2015

Abey Kgotle (45) EVP Human Resources B.Soc.Sc, M.Dip HRM Abey joined Lonmin in April 2008 and was appointed Executive Vice President Human Resources in September 2013

Muzi Kuzwayo (48) Acting EVP Communications and Public Affairs B.Sc. (Rhodes), MBA (UCT) Muzi joined Lonmin in October 2016

Page 34: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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Exploration

Mining Processing

Marketing

We are Lonmin – The Investment Case

Lonmin is one of only three

integrated “mine-to-market”

primary platinum producers

globally and the only LSE/JSE

listed Platinum producer

Source: SFA (Oxford)

Sou

th A

fric

an S

haf

t d

epth

s -

mb

s

Shallow Depth Shafts Enhancing Ease of Access and Lower Costs

Top 3 Platinum Producer Globally with High Quality, Long-life PGM Resources

Our aim is to create long term value for our shareholders as we move through the economic cycle

34

-2,500

-2,000

-1,500

-1,000

-500

0South African shaft depths, mbs

Lonmin Generation 1 Shafts

Lonmin Generation 2 Shafts

Lonmin Marikana

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

-50 0 50 100 150 200 250 300 350

In-s

itu

gra

de (

4E g

/t)

Resource size, contained 4E PGMs (moz)

Resources (inclusive of reserves) versus production Bubble size = 4E production, CY2015

Fully integrated

value chain

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Summary of Production Statistics

35

Generation 2 shafts

FY 2016 FY 2015

Tonnes mined K3 shaft kt 2,687 2,713

Rowland shaft kt 1,731 1,872

Saffy shaft kt 2,055 1,758

4B/1B shaft kt 1,588 1,408

Total Generation 2 kt 8,061 7,752

1B Shaft kt 6 219

Hossy Shaft kt 712 953

Newman shaft kt 346 765

W1 shaft kt 162 180

East 1 shaft kt 141 148

East 2 shaft kt 293 390

East 3 shaft kt 63 68

Pandora (100%) kt 471 544

Total Generation 1 kt 2,196 3,267

K4 shaft kt 0 49

Opencast kt 49 230

Total Underground & Opencast kt 10,305 11,297

Tonnes milled Total kt 10,375 11,810

Milled head grade Total g/t 4.59 4.47

Concentrator recovery rate Total % 86.6 86.7

Shaft head per tonne – underground operations excluding K4

K3 shaft R/t 890 840

4B/1B shaft R/t 714 760

Rowland shaft R/t 936 825

Saffy shaft R/t 858 886

Generation 2 R/t 857 830

Hossy shaft R/t 915 927

Newman shaft R/t 1,008 738

East 1 shaft R/t 1,041 1,025

East 2 shaft R/t 1,033 824

East 3 shaft & ore purchases R/t 927 872

W1 shaft R/t 920 902

Generation 1 R/t 957 858

Total Underground R/t 878 838

Page 36: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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Marikana Mines Overview

36

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Shaft Lifecycle of Marikana Mines R

eef

Pro

du

ctio

n %

of

Cap

acit

y

Build-up

High Cost & Capital Requirement Low Unit Costs Increased Unit Costs

Generation 3 Generation 2 Generation 1

Rowland MK2

K3 UG2 Sub-Incline Hossy (Stoping Only)

E2

Newman UG2

E1

W1

Steady-state Wind down

37

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Shaft Head Cost per Tonne (excl. Central Mining Services)

38

0

200

400

600

800

1,000

1,200

K3 4B/1B Rowland Saffy Gen 2 Hossy Newman E1 E2 E3 & ore W1 shaft Gen 1 Gen 1 &Gen 2

2015 2016

2016 890 714 936 858 857 915 1,008 1,041 1,033 927 920 957 878

2015 840 760 825 886 830 927 738 1,025 824 872 902 858 838

(R/t)

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Costs

2016 2015

Revenue (reported) $m 1,118 1,293

Metal stock movement (like-for-like) $m (121) (85)

Costs - PGM Operations Rm (14,083) (14,550)

Like-for-like FX R/$ 11.95 11.95

Costs (like-for-like SA) $m (1,178) (1,218)

Costs (like-for-like RoW) $m (15) (19)

Costs (like-for-like) $m (1,193) (1,237)

Exchange (total) $m 305 50

Cost of sales (reported) $m (1,009) (1,272)

EBITDA (underlying) $m 109 21

Depreciation (reported) $m (102) (155)

EBIT/(LBIT) (underlying) $m 7 (134)

Cost of production (PGM operations) R/oz 10,748 10,339

12 months to September

39

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Special Items

2016 2015

$m $m

BEE transaction

- BEE charge - (13)

- Consulting fees - (1)

Restructuring and reorganisation costs

- FY15 - (20)

- FY16 21 (39)

Debt refinancing costs (10)

Share-based payments (5)

Impairment of non-financial assets (335) (1,811)

- Impairment of goodwill - (40)

- Impairment of intangibles (19) (358)

- Impairment of property, plant and equipment (316) (1,413)

(329) (1,884)

40

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More colours Main colours Consolidated Income Statement for the year ended 30 September

2016 Special 2016 2015 Special 2015

Underlying items Total Underlying items Total

$m $m $m $m $m $m

Revenue 1,118 - 1,118 1,293 - 1,293

EBITDA / (LBITDA) 109 6 115 21 (73) (52)

Depreciation, amortisation and impairment (102) (335) (437) (155) (1,811) (1,966)

Operating loss 7 (329) (322) (134) (1,884) (2,018)

Profit on disposal of joint venture - 5 5 - - -

Finance income 23 32 55 16 20 36

Finance expenses (28) (60) (88) (20) (255) (275)

Share of loss of equity accounted investments (5) - (5) (5) - (5)

Loss before taxation (3) (352) (355) (143) (2,119) (2,262)

Income tax (expense) /credit (109) 64 (45) 35 328 363

Loss for the year (112) (288) (400) (108) (1,791) (1,899)

Attributable to:

- Equity shareholders of Lonmin Plc (89) (253) (342) (94) (1,567) (1,661)

- Non-controlling interests (23) (35) (58) (14) (224) (238)

Loss per share (137.0)c (3,437.6)c

Diluted loss per share (137.0)c (3,437.6)c

41

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More colours Main colours Consolidated Statement of Financial Position at 30 September

42

2016 $m

2015 $m

Non-current assets Intangible assets 74 94 Property, plant and equipment 1,158 1,477 Equity accounted investment 24 26 Royalty prepayment 37 38 Other financial assets 21 19

1,314 1,654

Current assets Inventories 245 281 Trade and other receivables 67 71 Tax recoverable - 1 Other financial assets 69 102 Cash and cash equivalents 323 320

704 775

Current liabilities Trade and other payables (193) (208) Provisions - (39) Interest bearing loans and borrowings - (505) Deferred revenue - (23)

(193) (775)

Net current assets 511 -

Non-current liabilities

Interest bearing loans and borrowings (150) - Deferred tax liabilities (34) (9) Deferred royalty payment (3) (3) Deferred revenue (9) - Provisions (127) (122)

(323) (134)

Net assets 1,502 1,520

Capital and reserves

Share capital 586 586 Share premium 1,816 1,448 Other reserves 88 88 Accumulated loss (821) (493)

Attributable to equity shareholders of Lonmin Plc 1,669 1,629 Attributable to non-controlling interests (167) (109)

Total equity 1,502 1,520

Page 43: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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Consolidated Statement of Cash Flow

43

2016 2015 $m $m Operating loss (322) (2,018) Depreciation, amortisation and impairment 437 1,966 Changes in working capital (25) 63 Other non-cash movements (8) 4

Cash flow generated from operations 82 15 Interest and finance costs (14) (24) Tax paid (10) (3)

Trading cash inflow/(outflow) 58 (12) Capital expenditure (89) (136) Dividends paid to minority shareholders - (19)

Free cash outflow (31) (167) Contributions to joint venture (3) (7) Proceeds from sale of joint venture 5 - Net proceeds from equity issuance 368 3

Cash inflow/(outflow) 339 (171) Opening net debt (185) (29) Foreign exchange 20 17 Unamortised fees (1) (2)

Closing net cash/(debt) 173 (185)

Trading cash inflow/(outflow) (cents per share) 23.2c (24.8)c

Free cash outflow (cents per share) (12.4)c (345.6)c

Page 44: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

016

033

141

008

083

166

000

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072

072

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118

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235

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228

245

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Western European Diesel Market

48%

49%

50%

51%

52%

53%

54%

55%

56%

Jan FebMarAprMayJun Jul AugSep OctNovDec

Diesel car sales in W.Europe, %

2014 2015 2016

4.3M

4.5M

4.7M

300

400

500

600

700

800

900

Jan FebMarAprMayJun Jul Aug Sep Oct NovDec

Diesel car sales in W.Europe, '000 units

2014 2015 2016

2015 YTD:

2014 YTD:

2016 YTD:

Source: SFA (Oxford), LMC Automotive

44

Page 45: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

016

033

141

008

083

166

000

173

226

072

072

072

118

118

118

161

192

218

235

235

235

146

205

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194

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155

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153

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231

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204

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228

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Alternative Powertrains

Diesel21%

Gasoline76%

FHEV, 67%

MHEV, 5%BEV, 13%

EREV, 1%

PHEV, 9%

FCEV, 0.04%

Other, 5%

Other, 3%

Light vehicle production in 2015, %

Diesel Gasoline FHEV

MHEV BEV EREV

PHEV Fuel cell Other

Diesel19%

Gasoline74%

FHEV, 40%

MHEV, 9%

BEV, 21%

EREV, 1%

PHEV, 26%

FCEV, 0.3%

Other, 3%

Other, 7%

Light vehicle production in 2023, %

Diesel Gasoline FHEV

MHEV BEV EREV

PHEV Fuel cell Other

Combustion engines projected to dominate powertrains for years

Source: SFA (Oxford), LMC Automotive

45

Page 46: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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Investors Rekindle Interest in Platinum

46

Page 47: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

016

033

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008

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Market Development Focus

47

Page 48: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

016

033

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008

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PGM Market Outlook

PGM demand remains solid 48

-0.39 -0.19 -0.26 -0.75

-10.00

-8.00

-6.00

-4.00

-2.00

0.00

2.00

4.00

6.00

8.00

10.00

2015 2016(f) 2017(f) 2025(f)

Platinum outlook Palladium outlook Rhodium outlook

2016 • Platinum market remains in deficit

• Primary and secondary supply flat

• Jewellery decline offset by growth in

automotive and industrial sectors

2017 • Supply remains unchanged

• Jewellery could recover but at risk

• If investment continues, the deficit

will remain

• Recycling could narrow deficit

Long

term • Supply will reduce

• Demand will recover in all segments

• Thrifting will result in limited

secondary supply growth

Source: SFA(Oxford), Lonmin

South Africa

Other Mines

Secondary Supply

Automotive

Jewellery

Other Industrial

Investment

-0.34 -1.40 -1.05 -0.49

-15.00

-10.00

-5.00

0.00

5.00

10.00

15.00

2015 2016(f) 2017(f) 2025(f)

South Africa

Other Mines

Secondary Supply

Automotive

Other Industrial

2016 • Palladium market remains in

significant deficit

• Investment may be a supplier

• Auto catalyst demand remains strong

2017 • Automotive demand remains strong

• Investment considered neutral

• Recycling supply recovers

• The deficit marginally narrows

Long

term • Primary Supply remains unchanged

• Secondary supply increases

dramatically

• Demand remains strong

2016 • Rhodium remains in surplus

• Modest increase in demand offset by

recycling

2017 • Surplus prevails

• Automotive demand will grow

modestly

• Recycling will increase

Long

term • As emissions legislation tightens and

mine supply contracts, rhodium will

shift back into deficit

0.00 0.04 0.10 -0.03

-1.50

-1.00

-0.50

0.00

0.50

1.00

1.50

2015 2016(f) 2017(f) 2025(f)

South Africa

Other Mines Secondary Supply

Automotive

Other Industrial

Lhs: moz, Rhs:koz Lhs: moz, Rhs:koz Lhs: moz, Rhs:koz

Page 49: WELL REPOSITIONED...Refined production of 741,890 Platinum ounces achieved Production 3,497 2,244 8,061 FY'15 FY'16 G1 G2 Tonnes mined, kt 5 Completed peaceful and realistic multi

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Disclaimer

This presentation, which is personal to the recipient, has been issued by Lonmin. This presentation includes forward-looking statements. All statements other than statements of historical fact included in this announcement, including without limitation those regarding Lonmin's plans, objectives and expected performance, are forward-looking statements. Lonmin has based these forward-looking statements on its current expectations and projections about future events, including numerous assumptions regarding its present and future business strategies, operations, and the environment in which it will operate in the future. Forward-looking statements generally can be identified by the use of forward-looking terminology such as 'ambition', 'may', 'will', 'could', 'would', 'expect', 'intend', 'estimate', 'anticipate', 'believe', 'plan', 'seek' or 'continue', or negative forms or variations of similar terminology. Such forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors related to Lonmin, including, among other factors: (1) material adverse changes in economic conditions generally or in relevant markets or industries in particular; (2) fluctuations in demand and pricing in the mineral resource industry and fluctuations in exchange rates; (3) future regulatory and legislative actions and conditions affecting Lonmin's operating areas; (4) obtaining and retaining skilled workers and key executives; and (5) acts of war and terrorism. By their nature, forward-looking statements involve risks, uncertainties and assumptions and many relate to factors which are beyond Lonmin‘ control, such as future market conditions and the behaviour of other market participants. Actual results may differ materially from those expressed in forward-looking statements. Given these risks, uncertainties, and assumptions, you are cautioned not to put undue reliance on any forward-looking statements. In addition, the inclusion of such forward-looking statements should under no circumstances be regarded as a representation by Lonmin that Lonmin will achieve any results set out in such statements or that the underlying assumptions used will in fact be the case. Other than as required by applicable law or the applicable rules of any exchange on which Lonmin's securities may be listed, Lonmin has no intention or obligation to update or revise any forward-looking statements included in this presentation after the publication of this presentation. This presentation is for information only and does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase, any shares in Lonmin or any other securities, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied upon in connection with, any contract or investment decision related thereto. Information supplied by host presenters may not be used, referenced or published without the prior written consent of the author of the presentations.

49


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