OVERVIEW

• Tragically one loss of life occurred in Q1 2018
• Total PGM production (expressed as 5E+Au metal in concentrate) increased 8% to 1,289,200 ounces, including platinum production up 7% to 613,800 ounces and palladium production up 9% to 407,400 ounces due to improved operational performances across the portfolio
• Own mined PGM production (excluding Union) increased 18% to 580,400 ounces due to an exceptional performance from Mogalakwena, supported by strong performances from all own mined operations
• Joint venture PGM production (mined and purchase of concentrate) increased 14% to 298,000 ounces due to strong performances from all operations
• Purchase of PGM concentrate from associates was down 25% primarily due to the closure of unprofitable ounces from Bokoni which was placed on care and maintenance in Q3 2017, partially offset by strong production from BRPM as the Styldrift project ramps up
• Refined PGM production decreased 11% to 1,017,500 ounces primarily due to planned maintenance in February at the ACP and Q1 2017 benefitting from treating the 2016 Waterval smelter backlog in addition to normal production
• PGM sales volumes was in line with the prior period at 1,151,600 ounces

REVIEW OF THE QUARTER

SAFETY

Anglo American Platinum tragically had one loss of life in Q1 2018. Mr Johannes Maimela, a 42-year-old tyre fitter, lost his life on 12 February 2018 following an attack by a swarm of African bees at the Amandelbult open-pit operations. Our deepest condolences go to his family, friends and colleagues. An independent and comprehensive investigation is under way to understand the circumstances and learn from them to create a safer work environment for all.

The Total Recordable Case Frequency Rate (“TRCFR”) per million hours at managed operations for the quarter improved significantly to 2.67 compared to 5.48 in Q1 2017.

PGM PRODUCTION

Total PGM production (expressed as 5E+Au metal in concentrate) of 1,289,200 ounces, increased 8% due to to improved operational performances across the portfolio. Total platinum production increased 7% to 613,800 ounces and total palladium production increased 9% to 407,400 ounces.

PGM production from own-managed mines

Own mined PGM production (Mogalakwena, Amandelbult, Unki and excluding Union for prior year comparison) increased 18% to 580,400 ounces due to an exceptional performance from Mogalakwena and supported by increased production from the other own mined operations. Platinum production was up 17% to 363,900 ounces, and palladium up 19% to 219,000 ounces.

Mogalakwena PGM production increased by 23% to 327,600 ounces as a result of targeting higher-grade areas in Q1, and optimisation to the North Concentrator Plant leading to an increase in concentrator throughput. Concentrator recoveries also increased 5% due to the higher feed grades and improvements in stability. Platinum production increased by 25% to 139,400 ounces and palladium production increased by 22% to 150,500 ounces. Base metal production decreased due to lower base metal content in the North pit.

The Mogalakwena built-up head grade of 3.34g/t is due to targeting a high-grade area in the North pit, which will normalise in H2 2018 to around 3.18g/t. High grade production was planned for Q1 2018, to get early ounces prior to the planned smelter rebuilds in Q2 and Q3 2018.

Amandelbult PGM production increased by 12% to 207,000 ounces due to improved underground efficiencies and higher grades. Platinum production increased 9% to 103,900 ounces, and palladium was up 16% to 50,700 ounces. Chrome production from Amandelbult increased 45% as the spiral plant has reached steady state, as well as improved yield.

Unki PGM production increased 9% to 45,800 ounces due to an increase in tonnes milled off the back of availability of ore stockpiled ahead of the concentrator following planned maintenance to the mill feed silo at the concentrator. This was completed in December 2017. Platinum and palladium production increased 9% to 20,600 ounces and 17,800 ounces respectively.

Other mined production

Union mine was sold to Siyanda Resources (“Siyanda”) on 1 February 2018, after which Union production was treated as third party purchase of concentrate. As a result, PGM mined production at Union decreased by 70% to 23,000 ounces, with mined platinum production down 69% to 11,600 ounces and mined palladium production down 70% to 5,200 ounces.

Total chrome production for Anglo Platinum reduced due to the sale of Union mine and MASA Chrome, which contributed one month of chrome production, to Siyanda.

PGM production from joint ventures (own mined production and purchase of concentrate)

Total joint venture PGM production increased 14% to 298,000 ounces. Platinum and palladium production increased 14% to 135,000 ounces and 86,900 ounces respectively.

PGM production at Mototolo increased by 38% to 84,700 ounces due to improved stoping efficiencies, leading to improved built-up head grade, supported by additional processing of ore stockpiles that had built-up following the temporary closure of the Helena Tailings Dam facility in Q3 2017. The ore stockpile was also toll-treated through Bokoni contributing to the year-on-year increase. Platinum production increased 37% to 38,900 ounces and palladium production increased by 44% to 24,700 ounces.

Modikwa PGM production increased by 16% to 77,100 ounces due to improved stoping efficiencies and plant recoveries, as well as due to purchasing ore stockpile concentrate from Mototolo. Platinum production increased by 21% to 31,200 ounces and palladium production increased by 11% to 28,000 ounces.

Kroondal PGM production increased by 1% to 136,200 ounces due to operational efficiency improvements. Platinum production increased 2% to 64,900 ounces and palladium production increased by 1% to 34,200 ounces.

Purchases of PGM concentrate from associates

Purchase of PGM concentrate from associates declined 25% due to the closure of unprofitable ounces from Bokoni which was placed on care and maintenance in Q3 2017 (platinum down 19% to 52,300 ounces, palladium down 34% to 21,700 ounces). PGM production from BRPM increased by 12% to 90,500 ounces due to the ramp up of the Styldrift project, in line with expectations, (platinum production up 13% to 52,300 ounces and palladium production up 11% to 21,700 ounces).

Purchases of PGM concentrate from third parties

Purchase of PGM concentrate from third parties increased 23% to 297,300 ounces due to an increase in purchased production from Union mine following the sale to Siyanda Resources. Purchase of concentrate increased 20% for both platinum, to 151,000 ounces, and palladium, to 74,500 ounces.

Refined production and sales volumes

Refined PGM production decreased 11% to 1,017,500 ounces primarily due to planned maintenance at the ACP causing downtime of 16 days, and a Section 54 stoppage affecting Waterval Smelter in December 2017, following the loss of life incident, and impacting production through into January 2018. Furthermore, Q1 2017 refined volumes were unusually high following the 2016 Waterval Smelter run-out backlog being treated, in addition to normal production volumes. Refined platinum production decreased by 13% to 502,600 ounces and refined palladium production decreased by 10% to 319,800 ounces.

There are planned smelter rebuilds of Mortimer smelter in Q2 2018 and Polokwane smelter in Q3 2018, resulting in a work-in-progress inventory increase in H1 and Q3, which will hopefully be processed in full by the year-end.

PGM sales volumes were in line with the prior year at 1,151,600 ounces. Platinum sales volumes decreased by 4% in line with the reduction in refined production to 500,500 ounces and palladium sales volumes increased by 10% to 336,200 ounces.

Full year guidance

Following the strong quarter production, full year production guidance is expected to be at the top end of the guidance range of 4.7 - 5.0 million PGM ounces, including 2.30 - 2.40 million platinum ounces and 1.5 - 1.6 million palladium ounces.

Refined production and sales volumes will be in line with production, but lower than 2017, which had the Waterval smelter run-out backlog and 2017 stock count gain which equated to c.200,000 PGM ounces including 100,000 platinum ounces of additional refined production that year.

Download the Anglo American Platinum Limited Production Report for the first quarter ended 31 March 2018