Impala Platinum Holdings Limited · JSE:IMP
Impala Platinum — Royal Bafokeng Platinum — FY2018 Earnings Presentation
38 slides from Impala Platinum's earnings presentation, March 2019
Slide 1: Audited Annual Results for the year ended 31 December 2018
AUDITED ANNUAL 20 RESULTS FOR THE YEAR ENDED 31 DECEMBER 2018 18
Slide 2: Disclaimer
lL] DISCLAIMER > This presentation is being supplied to you solely for your information and used at the presentation held in March 2019. The information contained herein is for discussion purposes only and does not purport to contain all information that may be required to evaluate Royal Bafokeng Pl
Slide 3: Disclaimer
lL] DISCLAIMER > Certain statements contained in this presentation that are not historical facts are “forward-looking statements.” These forward-looking statements may be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “plans”, “projects”, “anticipa
Slide 4: Disclaimer
lL] DISCLAIMER > In member states of the European Economic Area (the “EEA”), this communication is directed only at “qualified investors” within the meaning of Article 2(1)(e) of Directive 2003/71/EC (as amended, including by Directive 2010/73/EU). This communication is only being distributed to, an
Slide 5: Contents
CONTENTS Overview Market review Operational review Financial review Outlook
Slide 6: Overview
OVERVIEW ROYAL BAFOKENG @ PLATINUM MORE THAN MINING
Slide 7: Safety, financial, operations and social highlights
Safety Financial Operations Social > > 25.8% > 13.2% > R63.2 > R3.2 > 28.4% > 12.2% > > 1.0% > 1 000 > 11.9% R883.5 > > R3 459 > R832.4 > > > 4.7% > R3 billion
Slide 8: Delivering on our strategic objectives
DELIVERING ON OUR STRATEGIC OBJECTIVES x Achieve zero harm 0 1 v Labour stability v¥ Optimise volumes v Manage costs 01 v Maintaining our IMS panel ratio OEEE CUAL 02 v Created flexibility in our processing through the EXCELLENCE BUILD 0 2 Maseve acquisition FLEXIBILITY vy UG2 and chrome studies pro
Slide 9: Ownership, performance and spending to grow
2010 2018 67% OWNERSHIP 100% OWNERSHIP PERFORMANCE 2 366kt milled 3 420kt milled ownership of ownership of LTIFR LTIFR BRPM JV our operations 5.00 2.48 LABOUR 260Mt 348Mt OPERATIONS STABILITY RESOURCES 67% 100% Consistent stable labour and community relations SOCIAL FREE FLOAT SHAREHOLDING PERFORMAN
Slide 10: Market Review
- Lu iil Si 02 o fee ROYAL BAFOKENG Diary
Slide 11: Platinum weakness offset by palladium and rhodium
Platinum weakness offset by Indexed price (2 January 2018=100) palladium and rhodium 160 > 150 140 > 130 120 > 110 100 > 90 80 > 70 60 > Jun-18 Jul-18 Jan-18 Mar-18 Feb-18 Aug-18 Sep-18 Nov-18 Dec-18 Oct-18 Apr-18 May-18 Pt Pd Rh ZAR basket USD basket
Slide 12: Another challenging year is expected for platinum in 2019
Another challenging year is expected for platinum in 2019 > 9 7 600 > 8 7.9 8.0 8.0 8.1 7 1.9 1.9 1.9 1.9 25 > 65 6 7 400 > 6.0 6.1 6.1 6.2 (35) 5 4.4 4.4 4.5 4.3 4 3 7 200 7 400 7 345 > 2 1 > 0 7 000 > 2016 2017 2018 2019F 2018 Industrial Jewellery Auto 2019F Mine Supply Recycling SA supply
Slide 13: On-going tightness is expected in the palladium market in 2019
On-going tightness is expected in the palladium market in 2019 > 12 11 000 > 10 9.6 9.9 9.4 9.0 2.6 125 2.3 2.6 8 10 500 > 2.2 (5) (65) 6 > 7.1 7.0 7.3 6.8 4 10 000 10 465 10 410 > 2.4 2.5 2.5 2.5 2 0 9 500 2016 2017 2018 2019F 2018 Auto Jewellery Industrial 2019F Mine Supply Recycling SA supply
Slide 14: Operational Review
L 03 OPERATIONAL REVIEW =< ROYAL BAFOKENG CO iti
Slide 15: Achieving safe production remains key to operational excellence
Achieving safe Leading employee production remains key health and wellness to operational programmes and excellence initiatives Organic growth Operational flexibility underpinned by increased through ongoing production from Styldrift asset optimisation and additional and appropriate BRPM Styldrift t
Slide 16: Safety performance: TIFR, LTIFR and SIFR
Total recordable injury frequency rate Lost time injury frequency rate 12.00 3.00 2.808 10.173 2.475 10.00 9.267 2.50 8.00 7.229 2.00 1.902 /1 000 000 hrs /1 000 000 hrs 6.00 improvement improvement 8.9% in TIFR 1.50 11.9% 4.00 in LTIFR 1.00 2.00 0.50 0.00 Number of fatalities 2016 2017 2018 0.00 20
Slide 17: Health and wellness: TB and HIV
TB incidence rate HIV prevalence rate / 100 000 people 767 24.5% 765 23.1% 631 23.0% 2016 2017 2018 2016 2017 2018 Health and wellness initiatives > Rollout of personalised hearing protection > Our wellness programme equips our workforce and doorstep communities with information to manage and preven
Slide 18: Environmental efficiency targets and performance
We have efficiency-based reduction targets for our steady state operations BRPM and Styldrift retained ISO 14001 certification B scores for climate change and water submissions to the CDP We subscribe to SDG 13: Taking action to combat climate change Investigating development of renewable energy sou
Slide 19: Tonnes delivered and stoping square metres
Total tonnes delivered Total stoping square metres Description Unit 2017 2018 % Var 4 000 600 Total development km 36.1 35.0 (3.0) 542 3 395 550 2 3 500 Total stoping square metres 000m 510 542 6.3 510 2 992 500 466 BRPM 000m2 469 420 (10.4) 3 000 2 759 Styldrift 450 Styldrift 1 127 Styldrift 000m2
Slide 20: Tonnes milled and 4E metals in concentrate
Tonnes milled 4E metals in concentrate Description Unit 2017 2018 % Var Total tonnes milled kt 3 021 3 420 13.2 4 500 400 4 320ktpa 368 BRPM kt 2 449 2 299 (6.1) 4 000 350 328 Styldrift kt 572 1 121 96.0 3 500 304 3 000ktpa 300 Merensky kt 2 464 2 997 21.6 3 000 2 762 3 420 3 021 250 UG2 kt 557 423
Slide 21: Labour and productivity
Working cost labour Description Unit 2017 2018 % Var 7 000 6 271 Total labour No. 8 350 9 479 (13.5) 5 691 5 843 6 000 Working cost labour No. 5 691 5 843 (2.7) 5 000 Number 4 000 Capital labour No. 2 659 3 636 (36.7) increase 3 000 2.7% in working Stoping efficiency - BRPM m2/crew 353 336 (4.8) cos
Slide 22: Cash operating costs
Description Unit 2017 2018 % Var Cash operating costs R’m 2 815 2 788 1.0 Cash operating cost/tonne milled R/t 1 149 1 213 (5.6) Mining cost/tonne milled R/t 826 880 (6.5) Processing cost/tonne milled R/t 172 179 (4.1) Services cost/tonne milled R/t 151 154 (2.0) Cash operating cost/Pt oz R/oz 15 41
Slide 23: Capital expenditure
Description Unit 2017 2018 % Var Stay-in- R196 million for 2018 business > 3.4% of BRPM operating cost Stay-in-business capital (SIB) R'm 118 196 66.1 capital SIB % of BRPM operating cost % 3.8 3.4 (9.4) Replacement capital R'm 34 50 47.1 R50 million for 2018 Replacement > Phase III expenditure of R
Slide 24: Styldrift project progress
Section N1 - W Description Unit 2017 2018 % Var Section N1 - W Capital expenditure Annual R’bn 2.01 3.21 59.7 Section S1 - W Project-to-date R’bn 8.46 11.8 39.5 Project progress Development m 6 834 7 011 2.6 Project-to-date development m 17 800 24 811 39.4 Section S2 - W ROM tonnes delivered kt 561
Slide 25: Key infrastructure required for 230ktpm
Key infrastructure required for 230ktpm > 642 level infrastructure to complement 230ktpm footprint > Production sections 4 North, 5 North and 4 South > Primary and secondary fleet > Silo 3 Surface infrastructure Key LOM infrastructure > Ventilation shaft 2 Production infrastructure > Main shaft > Si
Slide 26: Maseve concentrator upgrade and chrome recovery
Maseve concentrator Chrome recovery upgrade > Maseve concentrator > Full co-processing > Value add to UG2 capability > Volume 160ktpm – 200ktpm > Recovery benefit UG2 optionality Operational focus areas > Improved UG2 revenue > IMS basket price > Cost management > Re-introduce South shaft UG2 > Cape
Slide 27: Financial Review
04 FINANCIAL REVIEW
Slide 28: Income statement summary
YoY Description Unit 2018 2017 % change Average basket price R/Pt oz 21 006 19 156 9.7 Average R:US$ exchange rate R:US$ 13.82 13.29 4.0 Revenue R’m 3 627.1 3 498.5 3.7 Cost of sales R’m (3 317.2) (3 186.5) (4.1) Gross profit R’m 309.9 312.0 (0.7) Administration expenses and other income R’m (160.0)
Slide 29: Improvement in US$ metal prices except platinum
IMPROVEMENT IN US$ METAL PRICES EXCEPT PLATINUM Description Unit 2018 2017 Revenue contribution Volume* USD Volume* USD 2.1% 1.1% 2.2% 1.0% 6.6% 5.9% 2.1% 1.0% Platinum oz 172 648 833/oz 182 638 934/oz 46.4% 1.7% 2.2% 55.1% 6.8% Palladium oz 70 620 1 095/oz 75 593 939/oz 11.3% 3.4% Gold oz 8 231 1 2
Slide 30: Cost of sales breakdown
2018 2018 YoY 2017 2017 Description R million % of total % change R million % of total Labour 1 095.0 37.3 (1.6) 1 077.5 38.2 Utilities 303.5 10.3 (14.6) 264.9 9.3 Contractor costs 831.1 28.3 (5.0) 791.8 28.0 Materials and other mining costs 558.2. 19.0 18.0 681.0 24.1 Total cash costs excl. 2 787.8
Slide 31: Headline earnings per share
Group Year ended 31 December YoY Description Unit 2018 2017 % change Headline earnings R’m 49.8 108.8 (54.2) Weighted average shares outstanding # million 199.2 192.7 3.4 Headline earnings per share R/share 0.25 0.56 (55.7) Restructuring costs R/share - 0.17 100.0 Housing receivable and PIC fair val
Slide 32: Headline earnings bridge 2017 to 2018
R’ million - 100.0 200.0 300.0 400.0 ( 200.0) ( 100.0) Headline earnings - 2017 108.8 Revenue - volume decrease 262.3 Decrease in costs due to decreased volumes 173.6 Maseve care and maintenance and 40.8 operational readiness costs (231.8) controllable Increase in admin and other costs, decrease in
Slide 33: Headline earnings per share bridge
Cents per share 15.0 40.0 65.0 90.0 115.0 140.0 165.0 ( 10.0) Headline earnings per share: 2017 56.4 Revenue - improved realised average 98.4 rand basket price Revenue - decreased volumes 66.0 9.4 Decrease in other income Maseve care and maintenance and 9.9 operational readiness costs Increase in de
Slide 34: Cash flow and net debt
YoY Description Unit 2018 2017 % change Cash generated by operating activities R’m 665.9 618.4 7.7 Cash utilised in investing activities* R’m (3 600.5) (2 231.0) 61.4 - Capital expenditure*** R’m (3 510.9) (2 138.3) 64.2 - Styldrift on-reef revenue receipts R’m 973.4 451.1 115.8 - Maseve acquisition
Slide 35: RBPlat announces R1.029bn capital raise through Rights Offer
> RBPlat announces R1.029bn capital raise through Rights Offer > Strong shareholder support > Key dates:
Slide 36: Transformative year and robust funding position
> Transformative year for > 7.7% > Robust funding position > Finance focus areas for Royal Bafokeng Platinum 2019 and beyond R665.9 > 37.3%
Slide 37: Outlook
05 OUTLOOK
Slide 38: Guidance
> > safety culture remains key > Guidance • Production is forecast to be between 4.0Mt and 4.4Mt yielding between 450koz and 480koz 4E metals in concentrate • Forecast built-up head grade of 3.91g/t to 4.02g/t (4E) • Total capex for 2019 forecast at approximately R1.7 billion - SIB expenditure is ex
Royal Bafokeng Platinum — FY2018 Earnings Presentation on 6ix