Todays presentation Implats Overview of results Market review - - PDF document

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Today’s presentation

Implats Overview of results Market review Financial analysis Review of operations and expansion projects Corporate issues Prospects Barplats Review of operations

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OVERVIEW OF RESULTS

Good operational performance Dollar basket price steady Production growth on track Strengthening rand has negative impact on results

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Key features

Revenue up 21% to R6 411 million Unit cost increases held at 9.6% for Impala Lease Area Operating income up 18% to R3 billion Balance sheet translation losses of R211 million as a result of strengthening rand Attributable income of R2 billion Headline earnings per share R30.42 Interim dividend – R9.00 per share

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Share price performance

400 450 500 550 600 650 700 750 Dec-01 Feb-02 Apr-02 May-02 Jul-02 Sep-02 Oct-02 Dec-02 Implats ALSI Mining Index Outperformed JSE Mining Index by 10% Outperformed JSE ALSI40 by 11% Source: Reuters

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Key ratios (%)

49 38 Return on assets 68 43 Return on equity FY02 FY03 (interims) 20 14 IRS 59 56 Impala Lease Area 52 47 Gross FY02 FY03 (interims)

Margin

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Implats refined production

15 1 292 1 486 PGMs (000oz) 8 6 573 7 090 Nickel (tonnes) 15 91 105 Rhodium 24 349 434 Palladium 14 680 773 Platinum (000oz) Variance % FY02 (interims) FY03 (interims)

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Platinum sales (‘000oz)

15 597 687 Metal available for sale (4) (83) (86) Metals returned 14 152 173 Metals purchased – 3rd party 14 528 600 Mine to market Variance % FY02 (interims) FY03 (interims)

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THE MARKET

Resilient platinum overshadows weaker palladium and rhodium markets

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Average metal prices achieved

38 5 122 7 057 Nickel ($/tonne) (1) 10 936 8 480 927 9 353 Revenue per Pt oz sold ($/oz) (R/oz) (40) 1 268 757 Rhodium (22) 399 312 Palladium 17 471 553 Platinum ($/oz) Variance % FY02 (interims) FY03 (interims)

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Platinum price ($/oz)

Auto sales robust Growth in diesel vehicle sales continues in Europe Chinese jewellery demand still robust, but high prices could have an impact

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Platinum supply and demand (‘000oz)

(65) (375) (170) Net supply deficit 6 900 6 550 6 255 Total supply 6 965 6 925 6 425 Total demand 90 90 90 Investment 1 580 1 550 1 545 Industrial 2 755 2 755 2 160 Jewellery 2 540 2 530 2 180 Automobile 2003 (forecast) 2002 2001

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Palladium price ($/oz)

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Consumer de-stocking and substitution, coupled with plentiful supply impacts price Price differential to platinum will attract additional auto usage

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Palladium supply and demand (‘000oz)

430 25 875 Net supply surplus 6 880 6 940 8 925 Total supply 6 450 6 915 8 050 Total demand 650 620 550 Other 815 760 720 Dental 895 1 200 1 425 Electronics 4 090 4 335 5 355 Automobile 2003 (forecast) 2002 2001

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Rhodium price ($/oz)

500 1000 1500 2000 2500 Jan-01 Mar-01 May-01 Jul-01 Sep-01 Nov-01 Jan-02 Mar-02 May-02 Jul-02 Sep-02 Nov-02 Jan-03

Producer selling keeps metal under pressure Demand stable – supply growth = price weakness

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Outlook

Platinum Outlook for platinum remains positive, supported by fundamental demand Short-term price fuelled by uncertain timing of new production and speculative activity Palladium Swing back by automotive industry in long term as users encouraged by price and supply Rhodium Remains vulnerable to oversupply in the longer term

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FINANCIAL REVIEW

Solid performance

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Income statement

18 2 581 3 035 Operating income (24) 2 719 3 376 Cost of sales 21 5 301 6 411 Turnover Variance % FY02 (interims) FY03 (interims) R million (14) 1 020 1 160 Taxation (8) 2 192 2 011 Attributable income (17) (338) (394) Royalties

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3 209 Income before taxation 5 606 636 Income from associates (202) 231 (236) Other income/expenses

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Sales revenue variance analysis

6 411 Half-year December 2002 533 Exchange rate (165) Price 742 Volumes 5 301 Half-year December 2001 R million

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Exchange rate

2 4 6 8 10 12 14

R/$

Jun 02 Dec 02 Dec 01

2 4 6 8 10 12 14

Interims 03 Interims 02

Exchange rate at balance sheet date Average exchange rate achieved

R/$

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Implats group – cost of sales (Rm)

(24.1) 2 719 3 376 Total (119.2) (233) 45 Change in stock 16.9 1 015 844 Metals purchased (80.7) 78 141 Other costs (26.3) 139 176 Amortisation (17.6) 172 202 Refining (26.6) 297 377 Processing (27.3) 1 251 1 592 On-mine operations Variance % FY02 (interims) FY03 (interims)

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Cash in hand at end of period

500 1000 1500 2000 2500 3000 3500 Dec-01 Jun-02 Dec-02

R (m) R2 319m R3 150m R974m

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Capex

200 400 600 800 1000 1200 1400 1600 1800 2000 FY02 FY03

R1 853m

H1 H2 H1 H2*

* forecast

R1 250m

R (m)

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REVIEW OF OPERATIONS AND PROJECTS

Platinum production rises by 14%, exceeding growth objectives

despite disappointing performance from Barplats

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Platinum production (000oz)

83 86 Toll refining (metal returned) 14 680 773 Total platinum 5 17 Other 55 66 Aquarius 8 8 Mimosa 1 35 Zimplats/Makwiro 21 16 Barplats 32 173 228 Impala Refining Services 7 507 545 Platinum – Impala Lease Area Variance % FY02 (interims) FY03 (interims)

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IMPALA LEASE AREA

Good operational performance with a 7.5% increase in platinum production

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Safety

40 10.7 6.4 LTIFR 25 4 3 Fatal accidents Variance (%) FY02 (interims) FY03 (interims)

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All injury rate

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Per million man hours

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Success of FOG campaign

192 191 190 9 17 19 15 5 5 9

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Before GCDs After GCDs

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Key features – mining and processing

Tonnes mined up by 9.6%

20 additional teams deployed underground

Tonnes milled up 5%

Recovery up 1%

Unit cost increases well-contained

9.6% per Pt oz and 7.6% per PGM oz

Decline projects on track 16 Shaft scoping exercise nearing completion

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Efficiencies

7 412 443 Centares per stoping team 0.4 42.3 42.5 Centares per panel employee Variance % FY02 (interims) FY03 (interims)

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Key features - refining

Excellent safety performance – zero lost time injuries Unit costs increased by 4% - a real decrease

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Refinery expansion to 1.65Moz of platinum complete Scoping of next expansion to 2.5Moz of platinum underway

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Technology update: processing Dryer

Capital cost of R100 million Increased drying capacity to 2.5Moz Pt per annum

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Technology update: processing Sulfacid plant

Capital cost of R65 million 60% reduction in SO2 emissions

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MARULA PLATINUM

Excellent progress at Marula Platinum as construction proceeds on time and within budget

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Marula Platinum

August 2002 Plant construction begins September 2002 Mine development starts September 2003 Plant commissioning begins October 2003 Mine stoping begins March 2004 Full throughput August 2004 Steady state

Decline development progressing well Stockpile being built in anticipation of plant commissioning Steel construction has begun Steady state output of 103 000 Pt ounces

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BARPLATS

Disappointing operational performance exacerbated by strength of rand

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Barplats

Tonnes milled down 32% Platinum in concentrate down 25% to 16 290 ounces Cash costs up 24% Attributable loss of R17 million Minimal impact on Implats

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STRATEGIC INTERESTS AND ALLIANCES

Important contributor to earnings with attributable contribution to Implats of R443 million after tax

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Implats - contribution by company (Rm)

16.0 383 443 Attributable income (4.0) 383 368 Lonplats

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Aquarius

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Mimosa

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Zimplats/Makwiro Variance (%) FY02 (interims) FY03 (interims)

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Strategic interests and alliances

Lonplats

• Attributable annualised production of 225 000 Pt ounces
• Contract with IRS for processing of concentrates

Aquarius

• Commissioning of Marikana ahead of schedule
• Everest South feasibility nearing completion

Two Rivers

• Potential production of 98 000 Pt ounces pa
• Tiso Capital empowerment deal

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Strategic interests and alliances

Zimplats/Makwiro Project ramping up Potential production of 95 000 Pt ounces pa Potential expansion to 440 000 Pt ounces pa under investigation Mimosa Ramp-up on schedule Potential production of 65 000 Pt ounces pa

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Corporate issues

Gencor ADR programme HIV/AIDS – delivery of ART through Impala Medical Plan

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Implats’ empowerment scorecard

Equity

• wnership

Employment equity Training

Social investment Affirmative procurement

• 19% units
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production

• RBN
• Mmakau

and community

• TISO

Capital - Two Rivers

• 34%

designated in management positions

• R80 m pa
• Blasting

certificates

• Apprenticeships
• Learner mining
• fficials
• Graduates
• 70% HDSA

bursars

• R70 to

R100m over next 5 years, largely on HDSA communities

• Spend on

HDSA companies for interim period of R150m

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Prospects

500 1000 1500 2000 2500 FY02 FY03 FY04 F05 FY06 Mine to market 3rd Party Toll

000oz Growth strategy remains on track – 2Moz by 2006

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Prospects

Platinum market to remain firm, underpinned by sound fundamental demand Given current rand strength, earnings will be significantly down on 2002 levels

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