A N A L Y S T P R E S E N T A T I O N J A N U A R Y 2 0 1 9 Discover Develop Deliver
TWO YEAR WAGE AGREEMENT BEST IN CLASS AWARD AT 4 000 FATALITY FREE SAFETY AND SUSTAINABILITY CONCLUDED WITH AMCU MINESAFE PRODUCTION SHIFTS 0.17 3 2 LTIFR YEARS FATALITY FREE SAFETY AWARDS LOST TIME INJURY FREQUENCY RATE 31 December 2018 4 21 82 ENGINEERING LEARNERSHIPS INTERNS AND GRADUATES ADULT EDUCATION AND TRAINING LEARNERS 2
THARISA – AN OVERVIEW THARISA MINERALS PROCESSING RESOURCE MINING 400 ktpm nameplate capacity 860.6 Mt resource 15 year open pit LOM Genesis Plant (100 ktpm) 92.9 Mt reserve of which 74.2 Mt open pit 40 year underground extension Voyager Plant (300 ktpm) MECHANISED DERISKED LARGE SCALE Mechanised open pit mining with a skilled and In production, major capex complete One of the world’s largest single chrome focused labour force FY2019 forecast production of 150 to 160 koz resources Owner mining model PGMs and 1.4 to 1.5 Mt of chrome concentrates Open pit PGM and chrome concentrate co-producer with an integrated marketing, sales, and logistics platform 3
THARISA – ADDING VALUE BEYOND MINING ARXO RESOURCES / PROJECTS ARXO METALS CUSTOMERS ARXO LOGISTICS BENEFICIATION MARKETING AND SALES Production of specialty grade Significant trader of chrome AGREEMENTS concentrates to China chrome concentrates PGM offtake – Impala Platinum and Third party trading ZIMBABWE Lonmin Global reach for specialty chrome Operates the Lonmin K3 UG2 Specialty offtake/agency – Rand York chrome plant producing concentrates 26.8% shareholding in Karo Metallurgical agency – Noble Group +20 ktpm of chrome concentrate Mining Holdings, developing the Strategic agreement – Tisco JV integrated PGM project in LOGISTICS Relationships with stainless steel and Zimbabwe Road/rail transport, warehouse ferrochrome producers and global R&D and port facilities for bulk chrome commodity traders New technology assessment Salene Chrome illuvial chrome concentrates 1 MW PGM smelter exploration project Road transport of PGMs 4
MINING Discover Develop Deliver
MINING RESOURCES AND RESERVES GENERALISED CROSS SECTION SHOWING MG CHROMITITE LAYERS (AT PLANNED DEPTH) Mining rate of 5.2 Mtpa with an average Bench = 20m stripping ratio of 9.5 (m 3 :m 3 basis) MINERAL RESOURCE 200m ▪ 860.7 Mt Reef dip east: 9-12° 53 ° Reef dip west: 14-18° ▪ 1.54 g/t 5PGE+Au 5.5 km strike length ▪ 20.1% Cr 2 O 3 MINERAL RESERVE ▪ 92.9 Mt East pit ▪ 1.39 g/t 5PGE+Au Central East pit ▪ 18.9% Cr 2 O 3 Far East pit West pit OPEN PIT MINERAL RESERVE ▪ 74.2 Mt ▪ 1.39 g/t 5PGE+Au ▪ 18.9% Cr 2 O 3 6
MINE PLAN – CURRENT POSITION 7
MINE PLAN - 2020 8
LOM OPEN PIT STRIPPING RATIO PRODUCTION - MINING 9.5 m 3 :m 3 (LOM FY2017: 9.6 m 3 :m 3 ) REEF MINED [Mtpa] ▪ Reef mined decreased by 7.6% quarter on quarter ▪ Comprehensive maintenance programme implemented to return 5.6 15 5.6 fleet to OEM standards, which reduced availability in FY2018 and in Q1 FY2019 5.0 10.7 10.6 4.9 4.6 4.8 10 ▪ Transitioned to 24 hour, four shift operations, which will increase 7.9 7.5 7.3 4.2 6.7 production capability by approximately 15% 3.9 3.6 5 ▪ Grade control initiatives have yielded positive results ▪ FY2019 will focus on improving efficiencies in drill and blast 2.6 0 operations – three additional drill rigs are on site ▪ New Caterpillar 6050 face shovel commissioned to increase waste 1.6 -5 removal capacity as part of the planned asset replacement 1.1 programme 0.6 -10 FY2014 FY2015 FY2016 FY2017 FY2018 Q1 FY2019 2020 -0.4 -15 Reef mined Stripping ratio 9
FLEET CAPACITY HAUL DRILL BLAST LOAD 13 OB drill rigs Blasting is outsourced 10 excavators and 1 55 haul trucks CAT777 for IB/reef 12 IB/reef drill rigs face shovel Capable of loading CAT785/789 for OB Capable of drilling +1.8 Mm 3 pm Capable of hauling +100 km pm +1.7 Mm 3 pm Current fleet capable of mining the 5.6 Mtpa of reef and more than the life of mine average stripping ratio to meet Vision 2020 targets 10
OPENING OF THE WESTERN CORNER OF THE EAST PIT February 2018 January 2019 11
CHANGING OF IN PIT HAUL ROADS July 2018 January 2019 12
PROCESSING Discover Develop Deliver
INNOVATIVE APPROACH 14
PROCESSING GENESIS PLANT VOYAGER PLANT Nameplate capacity: 100 ktpm ROM Nameplate capacity: 300 ktpm ROM Processes reef layers with lower Processes reefs with higher PGM PGM and higher chromite grades and lower chromite grades Challenger Plant recovers high value Produces both metallurgical and foundry grade and chemical grade chemical grade products chrome concentrates 15
PRODUCTION - PGM PGM PRODUCTION [kozpa] ▪ PGM production decreased by 5.9% quarter on quarter to 33.6 koz 200 200.0 110.0% ▪ PGM rougher feed grade of 1.59 g/t (Q4 FY2018: 1.48 g/t) 180 90.0% 160 85.0% ▪ Reduced recoveries by 9.0% to 76.5%, due to processing of 84.1% 79.7% 76.5% commissioning tailings in the quarter 152.2 69.9% 140 70.0% 65.8% 143.6 132.6 120 50.0% 48.8% 118.0 100 30.0% 80 78.2 10.0% 60 -10.0% 40 33.6 -30.0% 20 0 -50.0% FY2014 FY2015 FY2016 FY2017 FY2018 Q1 FY2019 2020 PGM production PGM recovery 16
PRODUCTION - CHROME CHROME PRODUCTION [Mtpa] ▪ Chrome concentrate production decreased by 10.0% quarter on ,2.0 2.0 quarter to 305.4 kt 150.0% ,1.8 ▪ Cr 2 O 3 ROM grade of 18.5% (Q4 FY2018: 18.3%) 130.0% ,1.6 ▪ Chrome recoveries reduced by 8.7% quarter on quarter to 58.9%, ,1.4 110.0% 1.4 due to the processing of commissioning tailings in the quarter 1.3 ,1.2 1.2 90.0% 85.0% ▪ Specialty grade chrome concentrate production of 72.0 kt 1.1 1.1 ,1.0 70.0% 66.0% 64.1% 62.7% 59.4% 58.9% ,0.8 58.0% 50.0% ,0.6 30.0% 25.4% ,0.4 24.3% 23.6% 21.7% 13.7% 10.1% 0.3 10.0% ,0.2 - -10.0% FY2014 FY2015 FY2016 FY2017 FY2018 Q1 FY2019 2020 Chrome production Chrome recovery Specialty chrome production 17
MARKET REVIEW Discover Develop Deliver
CHROME MARKET DEMAND AND SUPPLY MARKET PRICES AVERAGE MONTHLY FY2018 FY2019 ▪ Demand for metallurgical grade chrome concentrate is mainly 250 4 000 driven by its use in the manufacture of stainless steel 3 500 200 ▪ China is wholly dependent on imports of chrome ores 3 000 ▪ Spot chrome prices traded between US$156/t and US$240/t, 2 500 150 current market pricing is US$160/t 2 000 100 ▪ Chrome stocks at Chinese ports remain below the 3.0 Mt mark at 1 500 2.8 Mt – almost two and half months' supply 1 000 50 ▪ Indonesian installed annual stainless steel melt capacity of 2.0 Mt, 500 with a further 1.0 Mt being brought online - - Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 42% SA chrome concentrate price [US$/t] Port stocks in China [kt] CHEMICAL GRADE FOUNDRY GRADE CHROME ORE FERROCHROME STAINLESS STEEL Cr 2 O 3 – 45% to 47% Cr 2 O 3 >46% SiO 2 <1.2% SiO 2 <1.0% 0.6 tonnes 0.25 tonnes 1 tonne Used to produce sodium Used in moulds for metal castings dichromate used in leather tanning, and nozzle sands pigments and plating 19
PGM MARKET PGM DEMAND AND SUPPLY MARKET PRICES FY2018 FY2019 3 000 ▪ Vital industrial metals largely used in automotive catalytic converters, other drivers of demand include jewellery, industrial 2 500 uses and investment 2 000 ▪ Platinum demand is expected to marginally weaken in 2018, while 1 500 forecast demand for palladium and ruthenium is set to increase 1 000 ▪ Further advances in the deployment of fuel cell technologies are likely to see a rise in platinum demand 500 ▪ Increased promotion of platinum jewellery in China - Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Ir Cu Platinum Palladium Rhodium Iridium Ruthenium Ir 4.4% Ni 0.3% Ru 4.3% 1.2% Ru 14.0% 2.6% CHANGE IN AVERAGE MARKET PRICE FROM Au Rh Au FY2017 TO FY2018 22.7% 0.2% 0.2% PGM REVENUE Platinum ↓5.2% THARISA Rh Pt CONTRIBUTION Pt 9.8% PRILL SPLIT 50.7% Palladium ↑24.9% ex works 54.9% Rhodium ↑111.2% Iridium ↑40.9% Pd 16.7% Ruthenium ↑297.2% Pd 18.0% 20
STRATEGY IMPLEMENTATION Discover Develop Deliver
EXPLORATION PROJECTS DISCOVER Snakes Head PRODUCT DIVERSIFICATION EXPANSION FROM SINGLE ASSET FURTHER HIGHLY Salene GROWTH PROSPECTIVE Chrome OPPORTUNITIES AREA Hartley Platinum Mine Harare Resource of 28.2 Moz (4E) Karo Karo Platinum 4E grade of 4.03 gpt Estimated 96 Moz (4E) Platinum 4E grade of 3.2 gpt STRONG Ngezi Mine MINERAL RICH Resource of 72.6 Moz (4E) CASH GENERATION 4E grade of 3.34 gpt GEOGRAPHY POTENTIAL Unki Mine LOW COST Resource of 30.5 Moz (4E) LARGE SCALE 4E grade of 4.19 gpt PRODUCTION Mimosa Mine Resource of 13.9 Moz (4E) 4E grade of 3.61 gpt Source: https://www.researchgate.net/figure/Generalized-geology-of-the-Great-Dyke-and-locations-of-platinum-mines-and-prospects_fig1_235917128 and Company Data 22
KARO MINING HOLDINGS KARO PLATINUM 26.8% shareholding PROJECT PROGRESS ▪ Development permit awarded ▪ DTM and geophysics completed ▪ First 50 boreholes have been drilled, totaling over 7 600 m ▪ Almost all holes have intersected the Main Sulphide Zone ▪ Samples to be independently assayed ▪ Competent person appointed 23
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