African Rainbow Minerals Limited · JSE:ARI
African Rainbow Minerals — Corporate Update (October 2008)
80 slides from African Rainbow Minerals's corporate update, Oct 16, 2008
Slide 1: ARM Platinum Investor Trip
ARM Platinum Investor Trip 15 & 16 October 2008 African Rainbow Minerals Disclaimer Certain statements in this report constitute forward looking statements that are neither reported financial results nor other historical information, include but are not limited to statements that are predictions of
Slide 2: Contents
Contents Page • Opening Remarks Steve Mashalane 4 • ARM Overview Andre Wilkens 7 • Market Review Stompie Shiels 17 • ARM Platinum Overview Mike Schmidt 31 • Nkomati Nickel & Chrome Mine g Horst Jäger 52 • Modikwa Platinum Sean O’Connor • Two Rivers 3 Opening Remarks Steve Mashalane Chief Executive:
Slide 3: ARM Platinum Overview and Outlook
ARM Platinum Overview • Construction of Modikwa, Two Rivers and Nkomati completed – no immediate capital requirements, only ongoing/sustaining capex • During F2008 F2008, all operations obtained 90% of necessary power supply from Eskom – all operations achieved ± 100% production • At current commodi
Slide 4: ARM Overview
ARM Overview Andre Wilkens Chief Executive Officer ARM 100% 100%*** 51% 65% 16% Exploration Gold TEAL Harmony Platinum Ferrous Coal (primary listing on TSX) (primary listing on JSE) PGMs Iron Ore 20% Xstrata Coal Zambia 50% Modikwa* 50% Beeshoek South Africa 100% Konkola North** 55% Two Rivers 50% K
Slide 5: Growing diversified commodity business; reducing costs
Growing diversified commodity business Attributable EBIT split between commodities (excluding corporate and exploration costs) 9 Continuous focus on reducing costs ARM target for operations on the respective global cost curves by 2012 (benchmarked at steady state) Nkomati Chrome Manganese Smelter 20
Slide 6: Investing in our future; electricity cutbacks
No significant impact due to electricity cutbacks ARM Ferrous ARM Platinum ARM Coal • Most operations at 90% of • All operations operating at 90% of • All operations at 100% as Eskom steady-state steady state demand steady-state steady state demand requires uninterrupted coal supply • Some offset be
Slide 7: Capital expenditure and funding capacity
Attributable capital expenditure by division ARM Coal 6000 Two Rivers Modikwa 5000 Nk Nkomati ti 4 836 TEAL 4 235 ARM Ferrous 4000 3 760 R and millions 3000 2 779 2000 1000 0 F2008a F2009e F2010e F2011e • Strong EBITDA of R7.2 billion generated for the 12 months under review • All projects fully fun
Slide 8: Market Review: Safety
Safety • Absolute focus on safety over the past four years – ARM has performed significantly better than the industry • ARM’s performance over past financial year has however been mixed: progress was made in certain areas, but opportunities for improvement exist in others • Modikwa achieved 3 millio
Slide 9: Platinum historical ETF investment
Platinum 17 Historical ETF investment Source: ETF Securities, ZKB, Macquarie Research, September 2008 18 9
Slide 10: Platinum supply versus demand
Platinum supply versus demand Source: Johnson Matthey, Macquarie Research, September 2008 19 Platinum Supply versus demand analysis 2007a 2008e 2009e 2010e 2011e 2012e 2013e 2014e 2015e 2016e Platinum Price (US$ per oz) 1 331 1 675 1 550 1 625 1 650 1 575 1 500 1 450 1 520 1 566 Supply South Africa
Slide 11: PGM loadings; palladium supply versus demand
PGM loadings over time Source: Johnson Matthey, Macquarie Research, September 2008 21 Palladium supply versus demand Source: Johnson Matthey, Macquarie Research, September 2008 22 11
Slide 12: Break-even price rising; current producers
The break-even price is rising – Will it encourage new production? Source: RBC Capital Markets estimates 23 Current producers Source: Company reports, RBC Capital Markets estimates 24 12
Slide 13: Supply trends – Nickel
Supply trends – Nickel Committed greenfield projects • Nickel production growth lagged demand and brownfield expansions, 000 tonnes for much of this decade due to underinvestment, project delays and production disruptions Sulphide Concs • Production accelerated in 2007 2007, and after a Laterite Con
Slide 14: Supply trends – Chrome ore; Questions
Supply trends – Chrome ore • Chrome ore production reached 22.75 mt in 2007. Chrome ore production, 2005 - 2012 To meet the growing needs of the stainless steel 000 tonnes and ferrochrome industries, ore production will need to rise to 36.59 mt by 2012. • South Africa represents the largest single s
Slide 15: ARM Platinum Overview: Location
ARM Platinum Overview Mike Schmidt Executive: Platinum Operations Location Northern Limb Eastern Limb Bushveld Complex Bushveld Complex Western Limb Bushveld Complex Polokwane Mokopane Stella Layered Intrusion Modikwa Burgersfort Two Rivers Lydenburg Sun City Nelspruit Machadodorp Pretoria Mafikeng
Slide 16: Ownership; Platinum division contributes significantly
Ownership 83% 17% ARM Mining Consortium Modikwa Communities 50% 55% 50% 90% Modikwa** Two Rivers Nkomati Kalplats* 50% 45% 50% 10% Anglo Platinum Implats Norilsk Nickel Anglo American * Platinum Australia will earn in up to 49% on completion of a bankable feasibility study and owns 50% of the Kalpla
Slide 17: Revenue contribution; Modikwa overview
Revenue contribution per commodity Other Chrome 1% 16% Platinum Copper 34% 2% Nickel 14% Palladium 6% Rhodium 27% 33 Modikwa overview F2008 objectives F2008 performance F2009 objectives Achieve steady-state production during Steady-state production level achieved Achieving full year of steady state
Slide 18: Two Rivers and Nkomati overview
Two Rivers overview F2008 objectives F2008 performance F2009 objectives Achieve steady-state production in Steady-state production level achieved Achieving full year of steady state F2008 on a monthly basis production at 220 000 PGM oz Complete North Decline at a capital Construction and development
Slide 19: Sensitivity; Outlook
Sensitivity Commodity Prices Platinum $ / oz 1 050 Palladium $ / oz 200 Rhodium $ / oz 4 000 Nickel ($/ton) $/t 12 000 Chrome ($/ton) $/t 200 Cash Operating Margin Exchange g Rate ((R / $)) 8.50 9.50 10.50 Modikwa 16% 25% 32% Two Rivers 34% 40% 46% Nkomati 24% 33% 39% 37 Outlook • Supply • Banks app
Slide 20: Operating costs split; Modikwa strategies
ARM Platinum operating costs split Two Rivers Modikwa Nkomati R340/tonne milled R538/tonne milled R339/tonne milled 16% 4% 4% 3% 2% 3% 32% 47% 56% 48% 60% 25% Labour Consumables Labour Consumables Labour Consumables Power Other Power Other Power Other Average Contribution to Total Cost Two Rivers Mo
Slide 21: Two Rivers and Nkomati strategies
Two Rivers strategies • Plant Recoveries (72% - 78%) • R150m capex injection to improve grinding and floats (12 months) • Grade • Split S lit R Reeff causing i dil dilution ti • Working costs • Dependency on mechanisation • Imports • Increase in the price of diesel, electricity, steel and explosives
Slide 22: Growth strategy
Growth strategy Attributable PGMs 450 Modikwa Two Rivers Nkomati 400 350 300 Thousand ounces 250 200 150 100 50 - 2005a 2006a 2007a 2008a 2009e 2010e 2011e 2012e 43 Growth strategy 100% basis nickel 25 20 Thousand tonnes 15 10 5 - 2005a 2006a 2007a 2008a 2009e 2010e 2011e 2012e 44 22
Slide 23: Long term outlook; Nkomati nickel project
Long term outlook 100% chrome sales 160,000 140,000 120,000 100,000 Tonnes 80,000 60,000 40,000 20,000 0 Lumpy Screened Chips Washed Chips CWP Concentrate PCMZ Concentrate 45 Nkomati nickel project • Nkomati Nickel is a 50:50 JV between ARM and Norilsk Nickel Total nickel in concentrate: 20 500 tpa
Slide 24: Kalplats overview
Kalplats overview The Kalplats projects are located in the North West Province, 330 kilometers west of Johannesburg on the Kraaipan Greenstone Belt and comprises of two joint ventures with Platinum Australia (PLA) • ARM Platinum’s current interest in the “Kalplats Platinum Project” is 90% and PLA ca
Slide 25: Kalplats platinum project
Kalplats platinum project Crater 12.98Mt @ 1.63g/t 3E Updated mineral resources on 3 of 7 deposits Crater, Orion & Crux Mt 3E* g/t Moz Vela N Updated (Snowden) 57.36 1.37 2.52 Sirius Previous (Harmony) 35.63 1.53 1.76 Difference +61% +43% *3E = Pt+Pd+Au Stella Layered Orion 13,05Mt @ 1.44 g/t 3E Int
Slide 26: Nkomati Nickel and Chrome Mine
Nkomati Nickel and Chrome Mine Horst Jäger - Business Unit Leader and team Contents • Overview • History • SHREQ • Geology • Current Operations • Expansion Project • Q&A 26
Slide 27: Overview
Overview • Unincorporated JV • ARM – 50% • NNAf – 50% • South Africa’s only primary nickel producer • Substantial credits on by-products • Low cash cost operator at -$4.45/lb (net of by-products) • Rich poly-metallic ore body • Nickel • Copper • Cobalt • PGM’s • Large nickel and chrome resource with
Slide 28: Our vision and mission; values
Our vision and mission • Nkomati – • a Significant Nickel Producer • creating Quality of Life • and Sustainable Growth • Developing organization capability whilst caring for and growing our people • Making a g innovative, o at e, e efficient ce t aand d responsible use of our resources • Engaging wi
Slide 29: Business goals 2009; History
Our business goals 2009 • Commission Chrome Washing Plant • Complete pre-strip open pits • Grow chrome sales to 1.4 Mt 57 History The Uitkomst Complex was discovered by Asbestos Prospectors in late 1800’s and early 1900’s 1929 • The Uitkomst Complex first described by Wagner in his book “Platinum Pl
Slide 30: The future of Nkomati; Revenue analysis
The future of Nkomati Calendar Years 2006 2007 2008 2009 2010 2011 MSB ((30ktpm) p ) Production Phase 1 100ktpm F.S (100 ktpm) Construction Production Phase 2A 375 ktpm Feasibility Study MMZ Construction (475ktpm) Production Phase 2B PCR upgrade P1 to 250 ktpm Feasibility Study Construction (675 ktp
Slide 31: SHREQ; SHREQ model
SHREQ • Ethical approach • Zero Harm Mindset • No Repeats • Standards • Approved EMP in place • EIA’s in progress for full expansion • WULA submitted • Full participation in ARM Enterprise Risk Management System 61 SHREQ model SHREQ Policy Nkomati IMS Integrated Management System Working SHREQ Polic
Slide 32: Safety performance
- 10.00 15.00 20.00 25.00 30.00 5.00 2008 6.70 2009 2.09 12 mnth avg 4.64 Oct-07 26.98 Nov-07 - Dec-07 - Jan-08 6.54 Actual Feb-08 6.05 BP 2009 Mar-08 11.70 Apr-08 - May-08 6.64 Jun-08 3.11 Jul-08 2.73 Aug-08 - Sep-08 3.73 Safety performance Geology 64 63 32
Slide 33: Regional geological setting; Uitkomst complex
Regional geological setting Karoo Waterberg BOT SWANA Lebowa Granite Suite Rustenburg Layered Suite Polokwane Transvaal Sequence Archean Granite - Greenstone Steelpoort Bela Bela Rustenburg Pretoria Witbank UITKOMST Badplaas COMPLEX Johannesburg 65 Uitkomst complex VIEW Nkomati Mine : 66 33
Slide 34: Uitkomst complex extent; cross section
Uitkomst complex extent 67 Idealised cross section of Uitkomst Upper Gabb Uppe Gabbro o Timeball Hill Shales & Gabbronorite Quartzites Upper Diabase Sills Pyroxenite Peridotite (Main Harzburgite) Massive Chromitite Chromititic Di b Diabase Sill Sills Peridotite Malmani Lower Dolomite Basal Gabbro Py
Slide 35: Mineralised zones; down dip potential
Mineralised zones Chrome PCMZ MMZ BMZ MSB Sulphides 69 Nkomati down dip potential PIT 3 PIT 2 PIT 1B PIT 1A UG Underground Workings 70 35
Slide 36: Nickel ore types; resource statement
Nickel ore types MSB MMZ - Wherlite PCMZ BMZ MMZ - Blebby Minerals Pyrrhotite Pentlandite Chalcopyrite Pyrite Cobalt PGM’s Gold Silver 71 Nickel resource statement – 30 June 2008 2008 MINERAL RESOURCES, NKOMATI MINE & PHASE 2 EXPANSION PROJECT(with depletion by production as at 30 June 2008) Measure
Slide 37: Nickel reserve statement
Nickel reserve statement – 30 June 2008 2008 MINERAL RESOURCES, NKOMATI MINE & PHASE 2 EXPANSION PROJECT(with depletion by production as at 30 June 2008) Measured Mineral Resource Indicated Mineral Resource Total Mineral Resource Cut-off '000 Cut-off '000 '000 Ni% Cu% Co% 4E g/t Ni% Cu% Co% 4E g/t N
Slide 38: Chrome resources and reserves
Chrome resources and reserves – 30 June 2008 Resource Oxidized Massive Chromitite Resource ((with depletion p by y production p as at 30 June 2008) Indicated Mineral Resource Tonnes Cr2O3% Chromitite (at 30% Cr2O3 cut off) 4 600 000 31.04 Reserve Chromitite Tonnes Cr2O3% Probable Mineral Reserve (30
Slide 39: Delineation and exploration; Current operation
Delineation and exploration • MSB • Down dip extension Total 811 holes 161 300m • MMZ • Open pit infill drilling complete • Modeling in progress • Nickel & Chrome • Exploration permits for surrounding farms (Doornhoek JV) • Drilling has commenced 77 Current operation 78 39
Slide 40: Current mine phase 1; ore production
Current mine – phase 1 interim • Disconnect between MSB closure in 2007 & commissioning of the main expansion project • Objective of the Phase 1 project • Financially self-sustaining self sustaining • Sustain metal output • Maintain skill set • Trial mining opportunity, e.g. grade control • Tax impl
Slide 41: Concentrate production; Phase 2 expansion
Current mine - Concentrate production NICKEL CHROME • Base metal process • Chrome processing • Crush & Screen • Crush & Screen • Mill • Wash • Float • Mill • Filter • Spiral • Two Plants running in • Commissioning plant – tandem on MMZ milling 112 designed feed: 100 ktpm ktpm • Products • Average he
Slide 42: Nkomati expansion phases; Pit 3 dimensions
Nkomati expansion phases Phase 2 Total Nkomati Phase 1 A B at Steady State Plant Capacity (MSB) Plant Capacity (MMZ) Plant capacity (MMZ) Plant Capacity (PCMZ) Plant Capacity 30 000tpm 100 000tpm 375 000 tpm 250 000tpm 625 000tpm MSB Underground MMZ Underground MMZ Opencast PCMZ Processing MMZ/PCMZ
Slide 43: Open pit ore production and nickel grade
Open pit - ore production 85 Open pit – nickel grade 86 43
Slide 44: Nickel production; C1 cash costs
Nickel production 87 C1 cash costs (net of by-products) 88 44
Slide 45: Quarterly capital expenditure; Construction progress
Quarterly capital expenditure 89 Construction progress 90 45
Slide 46: Phase 2 and 2B summary cash flows
R Million 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600 2,800 3,000 3,200 3,400 3,600 3,800 Jul/07 Aug/07 Sep/07 Oct/07 Nov/07 Dec/07 Jan/08 Feb/08 Mar/08 Apr/08 May/08 Jun/08 Jul/08 Aug/08 Sep/08 Oct/08 EST ESCALATED PROG CASH FLOW Nov/08 Dec/08 Jan/09 Feb/09 Mar/09 Apr/09
Slide 47: Conclusion; Questions
Conclusion • Phase 2A project on schedule for commissioning September ’09. • Primary crusher and milling sections on critical path. • All other projects (open pit pre-stripping, tailings and waste rock dump) on schedule. • Phase 2A project currently within approved budget. • Challenges • Eskom power
Slide 48: Two Rivers Platinum Mine
Two Rivers Platinum Mine Nico Muller – Business Leader and team Contents • Overview • Safety • Geology • Current Operations • Q&A 48
Slide 49: Introduction; Locality
Introduction • Eastern Limb of Bushveld Complex • Platinum Producer • 2.7 Mtpa (225 ( 000 tpm)) • 220 000 PGE oz pa (120 000 Pt oz pa) • Joint Venture • ARM (55%) Management • Impala (45%) Smelting, Refining, Marketing • Fundamentals • Ensure excellent shareholder returns • Operate responsibly in an
Slide 50: Resource & Reserve Statement
Resource & Reserve Statement As at June 2008 Grade (g/t) Moz Moz Category Mt Pt Pd Rh Au (3E+Au) (5E+Au) Pt 6E UG2 Resource Measured 14.78 2.54 1.56 0.47 0.05 4.62 5.53 1.21 2.62 Indicated 41.69 2.05 1.23 0.38 0.04 3.70 4.46 2.75 5.98 Inferred 0.54 2.71 1.72 0.59 0.05 5.07 6.07 0.05 0.11 Total 56.47
Slide 51: Milestones
Milestones July 08 March 08 ND Sinking Feb 07 complete July 07 Mining ND Sinking June 2007 Complete 225,000tpm commences Aug 06 sinking of MD Jun 05 Plant Plant 225,000tpm Jan 04 Project Commission Sep 02 Release Trial Mining Dec 01 Bulk Purchase Sample # Land • Initial Capital Project completed 1 m
Slide 52: Mills
TRP Visit – 29 May 2008 Filtration House Concentrating Cells Thi k Thickener Overland Belt Mills Mill Feed Silos TRP Visit – 29 May 2008 52
Slide 53: 2008 Executive Summary
“Cyclone” Tailings dam TRP Visit – 29 May 2008 2008 Executive Summary • Transition from Project to Operation • 1 Fatality, LTIFR 3.20 per million man hours • ROM Tonnage • Deficit in first 6 months • Ramp up to 250 ktpm in 2nd half of 2008 • Oz Output Shortfall • Throughput and Recovery, 230 ktpm Q4
Slide 54: Safety
Safety Description 2005 2006 2007 2008 Labour 887 2 077 1 513 2 511 Dressing Cases 36 85 60 52 Lost Time Injuries 1 5 5 7 Reportables 1 5 8 11 Fatals 0 0 1 1 LTIFR 3.50 2.83 3.52 3.20 Severity Rate 54 175 213 146 • Fatality (05 July 2007) : Mudrush, Level 7 Orepass • Fatality Free Shifts : 638 767 s
Slide 55: Environment and permitting
Environment and permitting Description Status Comment Chrome Recovery Plant Finalised May 2008 Rehabilitation Trust Fund Finalised June 2008 (R562,952 contribution) North Decline Fuel & Emulsion facilities Finalised June 2008 Mining License Conversion Pending Submitted July 2007 Concentrator Plant U
Slide 56: Main Decline; Decline cross section
Main Decline Level 7 Level 6 Level 5 Level 4 Level 3 Level 2 Level 1 111 Decline cross section 615m 560m 430m 280m 112 56
Slide 57: North Decline; Run of mine total
North Decline Mine Plan 70 000 NORTH 1 NORTH 2 tonnes Fleet 4 Fleet 2 20 000(t) 20 000(t) Dev & Ledge Fleet 1 10 000(t) 370m SOUTH 1 Fleet 3 20 000(t) 113 Run of mine total 300,000 Revised 250,000 Production Strategy 200,000 150,000 Tonnes 100,000 50,000 - Aug-07 Oct-07 Jan-08 Feb-08 Jun-08 2004 200
Slide 58: Run of mine grade; Mill feed
Run of mine grade 5.0 4.5 4.0 3.5 g/t (6E) 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Aug-07 Oct-07 Sep-07 Nov-07 Dec-07 Jan-08 Feb-08 Apr-08 Jun-08 2004 2005 2006 2007 Jul-07 Mar-08 2009 2010 2011 2012 2013 May-08 Actual Future History Business Estimate Plan Forecast Estimate 115 Mill feed 300,000 2008 Average 19
Slide 59: 6E ounces produced; Production status
6E ounces produced 30,000 2008 Average 17 208 oz (18 715 oz) 25,000 20,000 Ounces 15,000 10,000 5 000 5,000 0 Oct/07 Dec/07 Jul/07 Aug/07 Sep/07 Apr/08 2007 Nov/07 Jan/08 Feb/08 Mar/08 May/08 Jun/08 2009 2010 2011 2012 2013 Actual History Future Plan Estimate 117 Production status - concentrator • C
Slide 60: Concentrator optimisation strategy
Concentrator optimisation strategy • Increase mill throughput • Improve primary crushing capacity • Introduce secondary crushing • Improve mill availability • Upgrade mill lubrication coolant system • Increased engineering operating and maintenance capacity • Improve recoveries • Increase cleaner ca
Slide 61: Run of mine total 2009; Grade year to date
Run of mine total 2009 year to date 300,000 250,000 200,000 150,000 Tons 100,000 50,000 - Aug-08 Oct-08 Jul-08 Sep-08 Nov-08 Dec-08 Jan-09 Feb-09 Apr-09 Jun-09 2004 2005 2006 2007 2008 Mar-09 May-09 2010 2011 2012 2013 Future Plan Estimate Actual 2009 History Business Estimate Plan 121 Grade - 2009
Slide 62: Run of mine total; Mill feed grade
Run of mine total 300,000 250,000 200,000 150,000 Tons 100,000 50,000 - Jul-08 Oct-08 2004 2005 2006 2007 2008 Aug-08 Sep-08 Jan-09 Feb-09 Dec-08 Mar-09 Apr-09 Jun-09 2010 2011 2012 2013 Nov-08 May-09 Future Plan Estimate Actual 2009 History Business Estimate Plan 123 Mill feed grade 6E g/t 5.0 4.5
Slide 63: Human resources development; Local economic development
Human resources development 2008 2008 Description 2009 Plan Comment Plan Actual Conclude an agreement with union on ABET ABET 82 29 128 classes 11 Engineering Learnerships (8 advanced, 3 Learnerships 10 11 16 basic). 5 Mining Learnerships to commence in September 2008. Basic computer training, Busin
Slide 64: Opportunities; Questions
Opportunities • Operational • Concentrator throughput – secondary crushing • Plant recovery – additional cleaner capacity • Optimise operating costs • Tolling • Strategic • Mining method optimisation • Merensky reef • Opencast – North open pit • Other 127 Questions www.arm.co.za 64
Slide 65: Modikwa Platinum Mine
Modikwa Platinum Mine Sean O’Connor - Business Leader and team Contents • Safety • Ore body • Mining methods • Production • Operating costs • Capital expenditure • Human resources • Key business issues 130 65
Slide 66: Locality; Lost time injury frequency rate
Locality 131 Lost time injury frequency rate 132 66
Slide 67: Fatalities; Lease area
Fatalities Achieved 4 Million Fatality Free Shifts on 26 August 2008 133 Lease area Mpumalanga Province Total lease area 14 278 ha 134 67
Slide 68: Optimal stoping cut; Vertical grade
Optimal stoping cut per shaft area 4 Leuconorite Unit 17 10 5 50 10 8 21 30 25 7 8 TRC 8 3 4 107 Planned 97 Planned 101 Planned UG2 58 61 56 BRC 10 20 -45 45 21 20 21 21 16 NORTH SHAFT SOUTH SHAFT HILL ADITS Mine average planned at 101.4cm – currently 101.6cm 135 Vertical grade distribution in UG2 T
Slide 69: UG2 resource categories; Resource classification
2008 UG2 resource categories (Data Mine model) Measured Resource Indicated Resource Inferred Resource 137 Resource classification Tonnage discounted (millions) Merensky UG2 Total 18.7 50.7 69.4 Measured (8.6%) (24.8%) (16.4%) 46.8 64.4 111.2 Indicated (21.5%) (31.5%) (26.3%) 152.0 89.6 241.6 Inferre
Slide 70: Mining layout; Modikwa Lev 1 LOM
Mining layout Footwall Drive ASG Mining Mining direction direction Pillars Mined out area See enlargement U i d area Unmined Enlargement 4m 30 m Footwall Drive Muck bay Cross cut Travelling way & SO 210 m Breast footwall layout Final layout 139 Modikwa – Lev 1 LOM Large Ends – Reef drive vs Fwall dr
Slide 71: Conversion to footwall strike; Mining Right plan
Conversion to footwall strike development & breast stoping Development required to generate ore reserves Breast mining Dip mining Footwall drives Twin raise & reef drives Required to replace Required to replace m² / metre m² / metre 50 000 m² 50 000 m² m² / Total Dev 52 953 17 2 941 m² / Prim – R/W,
Slide 72: Mining Right plan – Merensky design
Mining Right plan – Merensky design 143 Tonnes to concentrator stockpile 144 72
Slide 73: Merensky resource categories; primary development
2008 Merensky resource categories (Data Mine model) 131 boreholes 242 reef cuts Measured Resource Indicated Resource Inferred Resource 145 Total primary development metres / month (Excludes shaft sinking) At steady state breast requires less development than dip to generate the same ore reserves 146
Slide 74: Immediately available reserves; Monthly area mined
Immediately available reserves (Raises holed) 18 month reserve achieved by 2010 Includes depletion of Hill and Midshaft Transition to 100% production from North and South Shafts 147 Monthly area mined (m2) (UG2 & Merensky) 148 74
Slide 75: Stoping width UG2; Average tonnes milled
Stoping width UG2 149 Average tonnes milled per month Merensky Trial Mining 150 75
Slide 76: Built-up headgrade; monthly platinum ounce profile
Built-up headgrade UG2 151 Estimated monthly platinum ounce profile 152 76
Slide 77: Cash cost per tonne milled and per platinum ounce
Cash cost per tonne milled 153 Cash cost per equivalent refined platinum ounce Lower Platinum content of Modikwa ore results in higher unit cost per Platinum ounce, comparable cost per PGM ounce 154 77
Slide 78: Cash cost per 4E ounce; Operating cost
Cash cost per 4E ounce 155 Operating cost • Current cash costs per ton milled and Pt oz high as build up continues to 50 000m² • Drivers of cost reduction • Volume increase • 4 mining areas to 2 • 1.5m of equipped face per metre face blasted • Novice workforce moving up learning curve • TM3 Efficien
Slide 79: Capital expenditure; Employee and community relations
Capital expenditure Main Items for 2008: • Replacement or refurbishment of mechanised fleet – R103.6 R103 6 million illi • Modikwa Phase 2 Replacement – R211.2 million for 2008 only 157 Employee and community relations • Relationships with communities steady • Estimating R11 million spend on Communi
Slide 80: Key business issues; Questions
Key business issues • Improved safety performance • Achieve planned volume increase • Smooth transition from down dip to breast stoping and moving drives into footwall • Further improve efficiency of the mechanised development and tramming • Improve efficiencies of stoping teams 159 Questions www.ar
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