Impala Platinum Holdings Limited · JSE:IMP
Impala Platinum — Royal Bafokeng Platinum — H1 2018 Earnings Presentation
35 slides from Impala Platinum's earnings presentation, 2018
Slide 1: Condensed Consolidated Interim Results
Condensed Consolidated Interim Results For the six months ended 30 June 2018
Slide 2: Disclaimer
Disclaimer The information presented in this presentation is of a general nature and the forward-looking information, opinions and beliefs of the Company and its affiliates are based on various market related assumptions. Changes in market circumstances after the production of the information may im
Slide 3: Contents
CONTENTS Overview Market Review Operational Review Financial Review Outlook
Slide 4: Overview
Ki y ZA OVERVIEW tz
Slide 5: Solid performance from Styldrift; continued cost savings at BRPM
Solid performance from Styldrift; continued cost savings at BRPM > 3.1% increase in lost time injury frequency rate (LTIFR) SAFETY > 54.6% increase in serious injury frequency rate (SIFR) > Regrettably, one fatality post the reporting period > 69.2% increase in tonnes milled from Styldrift to 406kt
Slide 6: On track to meeting our strategic objectives
On track to meeting our strategic objectives > Sustained labour stability > Stable labour productivity > Reduction in cash operating costs > Creating flexibility in our processing through restructuring through the Maseve acquisition > Committed to improving our safety performance > Impala royalties
Slide 7: Market Review
MARKET REVIEW
Slide 8: Platinum supply forecast to be steady in 2018
Platinum supply forecast to be steady in 2018 as the increase in recycling supply offsets the decrease in SA mine output Global platinum supply forecast Global platinum demand forecast 10,0 7 800 9,0 Peak = 6.9 7 700 45 45 8,0 2.0 130 2.0 7 600 110 7,0 2014 = 4.9 6.0 7 500 (30) (120) 6,0 koz Moz 5,0
Slide 9: Total palladium supply to remain flat as recycling increases slightly
Total palladium supply to remain flat as output from recycling increases slightly Global palladium supply forecast Global palladium demand forecast 10,0 2,1 10 600 9,0 2.5 45 65 Peak =7.1 10 400 8,0 (15) (1) (20) 7.0 (25) 7,0 (75) (35) 10 200 6,0 Moz koz 5,0 2014 = 6.4 10 000 4,0 10 325 10 295 10 32
Slide 10: Operational Review
OPERATIONAL REVIEW
Slide 11: Business strategy continues to drive operational performance
Business strategy continues to drive operational performance Styldrift Community 150ktpm and ramp-up workforce on target stability Focus on for Q4 2018 improving injury frequency rates Maseve Operating costs acquisition continue unlocks organic to remain flat growth path to 230ktpm Condensed Consoli
Slide 12: Reversing safety trends key to achieving a resilient safety culture
Reversing safety trends key to achieving a resilient safety culture Description Unit H1 2016 H1 2017 H1 2018 % Var Total injury frequency rate Lost time injury frequency rate Fatal injuries No. 1 - - 0.0 12,00 11,19 3,00 2,68 2,60 9,92 TIFR* Rate 5.95 11.19 9.92 11.3 10,00 2,50 LTIFR* Rate 1.61 2.60
Slide 13: Leading health and environmental programmes
Leading health and environmental programmes Health Environment > HIV self-test campaign > Pursuing long-term environmental stability > Extensive TB treatment program which includes our doorstep > Carbon disclosure project - CDP communities • Maintained A list sustainable water management score for t
Slide 14: Increased Styldrift contribution aligned to 150ktpm ramp-up
Increased Styldrift contribution aligned to 150ktpm ramp-up Description Unit H1 2016 H1 2017 H1 2018 % Var > BRPM development 13.3% − remains aligned with Total development km 17.6 19.1 17.0 (11.0) depletion rates BRPM km 15.6 15.8 13.7 (13.3) > BRPM IMS panel ratio of 1.89 Styldrift capital devel
Slide 15: BRPM concentrator at full capacity: Maseve plant start-up H2 2018
BRPM concentrator at full capacity: Maseve plant start-up H2 2018 Description Unit H1 2016 H1 2017 H1 2018 % Var Total tonnes milled Pt metal in concentrate Total tonnes milled kt 1 292 1 477 1 529 3.5 1 800 120 Styldrift 106,5 Styldrift 406 BRPM kt 1 150 1 237 1 123 (9.2) 1 600 240 100 100,0 Styldr
Slide 16: Working cost labour aligned to restructuring
Working cost labour aligned to restructuring Description Unit H1 2016 H1 2017 H1 2018 % Var Working cost labour Capital labour Total labour No. 7 228 7 819 8 520 (9.0) 7 000 6 330 6 247 3 500 5 627 2 893 6 000 3 000 Working cost labour No. 6 330 6 247 5 627 9.9 5 000 2 500 Capital labour No. 898 1 5
Slide 17: Containing unit costs remains a key focus
Containing unit costs remains a key focus Description Unit H1 2016 H1 2017 H1 2018 % Var Cash operating costs Cash operating cost/Pt oz Cash operating costs R'm 1 329 1 429 1 342 6.1 1 600 18 000 16 159 1 429 15 882 15 913 1 400 1 329 1 342 16 000 Cash operating cost/tonne milled R/t 1 156 1 155 1 1
Slide 18: Accelerating construction activities drives increase in capital expenditure
Accelerating construction activities drives increase in capital expenditure Description Unit H1 2016 H1 2017 H1 2018 % Var Stay-in-business capital (SIB) R'm 56 59 57 3.4 Stay-in-business capital (BRPM) R'm 56 54 42 22.2 SIB % of operating cost (BRPM) % 4.2 3.8 3.2 15.8 Stay-in-business capital R57
Slide 19: Styldrift project progress: 150ktpm on target for Q4 2018
Styldrift project progress: 150ktpm on target for Q4 2018 Description Unit H1 2016 H1 2017 H1 2018 Stoping production Capital expenditure 50 000 44 628 Annual R’bn 0.41 0.78 1.30 40 535 Project-to-date R’bn 5.89 7.23 9.76 40 000 Project progress Development m 2 068 3 328 3 285 30 000 m2 Project-to-d
Slide 20: Innovative solution to Silo 4 geotechnical conditions
Innovative solution to Silo 4 geotechnical conditions 642 level 6m diameter steel rings Excavation sidewall 64m Concrete void filling > Challenging geotechnical conditions 8m – Concrete Plug > Installation of sixty 6-metre diameter by 1-metre high rings > Forty rings completed in H1 2018 Bulkhead in
Slide 21: Stoping gearing up to meet Q4 150ktpm milestone
Stoping gearing up to meet Q4 150ktpm milestone Legend Section N1 - W Development completed end June 2018 Stoping completed end June 2018 Section strike belts commissioned Section strike belts to be installed Section N2 - W Section S1 - W Section S2 - W Section N2 - E Section N1 - E Section S2 - E S
Slide 22: Key milestone dates for Styldrift ramp-up to 230ktpm
Key milestone dates for Styldrift ramp-up to 230ktpm Ventilation shafts Services Shaft 1,2 and 3 Legend Main Shaft Development completed end 2017 Development completed end Jun 2018 Decline and infrastructure development 150ktpm Decline and infrastructure development 230ktpm Section N5 Q1 -’20 Sectio
Slide 23: Key Styldrift life of mine infrastructure progress
Key Styldrift life of mine infrastructure progress Description 150ktpm 230ktpm Completion date Surface infrastructure Main shaft Complete Offices & changehouse Complete Overland belt Complete Services shaft Complete Underground infrastructure Electrical supply Complete Material distribution Complete
Slide 24: Financial Review
FINANCIAL REVIEW
Slide 25: Improved realised average rand basket
Improved realised average rand basket 6 months ended 6 months ended Year ended Description Unit 30 June 2018 30 June 2017 % Change 31 December 2017 Average basket price R/Pt oz 19 990 17 745 12.7 19 156 Average rand received R:US$ 12.95 13.07 (0.9) 13.29 Revenue R’m 1 659.6 1 593.9 4.1 3 498.5 Cost
Slide 26: 40.2% of capital expenditure funded from operating cash and Styldrift revenue
40.2% of capital expenditure funded from cash generated by operating activities and Styldrift on-reef development revenue 6 months ended 6 months ended Year ended Description Unit 30 June 2018 30 June 2017 % Change 31 December 2017 Cash generated by operating activities R’m 150.4 122.0 23.3 618.4 Ne
Slide 27: Significant strengthening of most USD metal prices except platinum
Significant strengthening of most USD metal prices except platinum 2018 6 months ended 6 months ended Description Unit 2,3% 30 June 2018 30 June 2017 7,7% 2,1% 2,0% 48,9% Volume* US$ Volume* US$ 10,5% 3,3% Platinum oz 83 001 896/oz 89 825 940/oz 22,1% Palladium oz 34 079 985/oz 37 516 845/oz Gold oz
Slide 28: 6.4% decrease in costs of sales excluding depreciation and amortisation
6.4% decrease in costs of sales excluding depreciation and amortisation 6 months ended 6 months ended 6 months ended 6 months ended Description 30 June 2018 30 June 2018 % Change 30 June 2017 30 June 2017 R million % of Total R million % of Total Labour 511.9 38.6% 5.8 543.6 38.4% Utilities 129.6 9.
Slide 29: Headline loss per share bridge: H1 2017 to H1 2018
Cents/share -50 -25 0 25 50 Headline loss per share: H1 2017 (15.3) Revenue - improved realised average rand 52.9 basket price Revenue - decreased volumes (36.5) Headline loss per share Decrease in other income (12.0) Condensed Consolidated Interim Results for the six months ended 30 June 2018 Masev
Slide 30: Headline loss bridge: increase in non-controlling interest
R’million -50 -200 -150 -100 0 50 100 150 200 250 300 Headline loss - H1 2017 (29.4) Revenue - volume decrease (146.8) Headline loss Decrease in costs due to decreased volumes 146.5 Maseve care and maintenance and operational readiness costs (20.5) 21.5 controllable Increase in admin and other costs
Slide 31: Cash and cash equivalents movement
R’million -400 0 400 800 1 200 1 600 2 000 Cash and cash equivalents - 1 January 571.2 2018 761.9 1 333.1 Cash generated by operations 150.4 Interest, dividends and tax 604.7 42.3 Styldrift on-reef development revenue receipts 412.0 SIB capex (57.1) Replacement capex Condensed Consolidated Interim R
Slide 32: RBPlat well positioned to continue to grow as planned
RBPlat well positioned to continue to grow as planned > Significant progress made with strategic value-enhancing transactions • Successful financial closure of Phase 1 and Phase 2 of the Maseve acquisition • Maseve plant and surface rights sold to the BRPM JV at cost • Conclusion of legally binding
Slide 33: Outlook
ag 2 Tl E Bike a 2 OUTLOOK
Slide 34: Committed to long-term value creation
Committed to long-term value creation > The platinum market is forecast to be in surplus in 2018 • Without significant supply cuts from loss-making mines, prolonged lower platinum prices can be expected > Reversing the deterioration in our key safety metrics is a key objective > Production guidance
Slide 35: Condensed Consolidated Interim Results
Condensed Consolidated Interim Results For the six months ended 30 June 2018
Royal Bafokeng Platinum — H1 2018 Earnings Presentation on 6ix