OVERVIEW

• Tragically one loss of life occurred in Q4 2018
• Total PGM production (expressed as 5E+Au metal in concentrate) of 1,256,900 ounces, increased 3% (Q4 2017: 1,220,000 ounces), due to improved operational performances particularly at Unki and the JV portfolio
• Own managed mines PGM production marginally decreased to 535,600 ounces, down 2% as lower production at Mogalakwena (due to planned reduction in grade) and Amandelbult (due to the impact of a tragic fatality) was partially offset by a strong performance from Unki and the inclusion of Mototolo as own mined production
• Joint venture PGM production (mined and purchase of concentrate) had a strong performance, increasing 6% to 281,600 ounces due to productivity improvements
• Purchase of PGM concentrate from third parties increased by 32% to 439,700 ounces due to production purchased from Union mine and inclusion of all material from BRPM following its sale
• Refined PGM production was strong, increasing by 5% to 1,528,200 ounces due to partially refining the build-up of work-in-progress inventory following scheduled smelter rebuilds and maintenance earlier in 2018, and the performance was up against a strong comparative quarter in Q4 2017 when additional work-in-progress inventory was processed following the Waterval smelter run-out
• PGM sales volumes were flat at 1,507,200 ounces

REVIEW OF THE QUARTER

SAFETY

Anglo American Platinum tragically had one loss of life in Q4 2018. Mr Emmanual Thato Segale, lost his life due to a fall of ground related incident which occurred on Thursday, 18 October 2018 at the Company’s Dishaba Mine in Amandelbult. 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, and the Company is providing support and assistance to all involved. Anglo American Platinum remains committed to the elimination of fatalities.

The Total Recordable Case Frequency Rate (“TRCFR”) per million hours at managed operations for the quarter was 2.99, an 11% improvement compared to 3.36 in Q4 2017.

PGM PRODUCTION

Total PGM production increased to 1,256,900 ounces, up 3% (Q4 2017: 1,220,000 ounces), due to improved operational performances across the majority of the portfolio. Platinum production increased by 3% to 602,300 ounces (Q4 2017: 587,000 ounces) and palladium production increased by 3% to 386,600 ounces (Q4 2017: 374,900 ounces).

PGM production from own-managed mines

Own managed mines PGM production decreased by 2% to 535,600 ounces (Q4 2017: 545,600 ounces) due to lower production at Mogalakwena (as guided) and Amandelbult, offset by strong performances from Unki and the inclusion of Mototolo as an own-mine from 1 November 2018, following the completion of the acquisition of Glencore and Kagiso-Tiso’s stakes in the Mototolo mine. Platinum production decreased by 3% to 244,400 ounces (Q4 2017: 252,900 ounces) and palladium production decreased by 1% to 193,600 ounces (Q4 2017: 195,700 ounces).

Mogalakwena PGM production decreased by 9% to 256,800 ounces (Q4 2017: 282,200 ounces) due to an 8% reduction in the built-up head grade, following from the decline in Q3 2018 and as previously guided, as well as maintenance at one crusher, which led to a reduction in tonnes milled. Mining performance was strong, with an increase in total tonnes mined, up 7% to 22.9 million tonnes. Platinum production decreased 11% to 108,400 ounces (Q4 2017: 121,700 ounces) and palladium production decreased 8% to 118,200 ounces (Q4 2017: 127,800 ounces).

Amandelbult PGM production decreased by 16% to 190,700 ounces (Q4 2017: 226,800 ounces) due to lower underground production delivered to the concentrator primarily due to the section 54 stoppage following the fatal incident on 18 October 2018 and subsequent extensive retraining of employees, some impact from Eskom load shedding, and an increase in absenteeism in the final quarter. Platinum production decreased 16% to 96,500 ounces (Q4 2017: 114,800 ounces) and palladium production decreased by 16% to 44,900 ounces (Q4 2017: 53,700 ounces).

Unki had a strong production performance, with PGM production increasing by 36% to 49,800 ounces (Q4 2017: 36,600 ounces) due to a strong operational performance with a 20% increase in tonnes milled, 10% improvement in recovery and 3% improvement in built-up head grade. Platinum production increased by 34% to 22,000 ounces (Q4 2017: 16,400 ounces) and palladium production increased by 38% to 19,600 ounces (Q4 2017: 14,200 ounces).

The acquisition of the remaining 50% of Mototolo was concluded on 1 November 2018, from which date 100% of its production became own mined production, contributing 38,300 PGM ounces, 17,500 platinum ounces and 10,900 palladium ounces.

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

Joint venture PGM production (Mototolo to 31 October 2018, Modikwa and Kroondal) increased by 6% to 281,600 ounces (Q4 2017: 265,800 ounces). Platinum production increased by 6% to 126,200 ounces (Q4 2017: 119,600) and palladium production increased 6% to 82,400 ounces (Q4 2017: 77,400 ounces). This was driven by productivity improvements, improved plant recoveries and an increase in built-up head grades. Production from joint ventures is split 50:50 between own mined production and purchase of concentrate.

Purchases of PGM concentrate from third parties

Purchase of PGM concentrate from third parties increased by 32% to 439,700 ounces (Q4 2017: 334,200 ounces) due to concentrate purchased from Union mine following its sale to Siyanda in February 2018, as well as including all purchased concentrate from BRPM following its sale. Platinum production increased by 31% to 231,700 ounces (Q4 2017: 177,400 ounces) and palladium increased by 31% to 110,700 ounces (Q4 2017: 84,700 ounces).

Refined production and sales volumes

Refined PGM production had a strong performance in Q4 2018, up 5% to 1,528,200 ounces (Q4 2017: 1,455,600 ounces). This was due to partially refining the build-up of work-in-progress inventory following scheduled smelter rebuilds and maintenance at both Mortimer smelter and Polokwane smelters earlier in 2018, and the performance was up against a strong comparative quarter in Q4 2017 when additional work-in-progress inventory was processed following the Waterval smelter run-out. Platinum refined production increased 7% to 770,900 ounces (Q4 2017: 722,200 ounces), while palladium production was flat at 493,800 ounces (Q4 2017: 491,400 ounces).

PGM sales volumes (excluding refined metal purchased from third parties) was flat at 1,507,200 ounces (Q4 2017: 1,511,800 ounces). However, platinum sales volumes increased by 8% to 776,900 ounces (Q4 2017: 721,700 ounces) due to higher refined production, supplemented by a draw down in platinum stocks. Palladium sales volumes decreased by 4% to 455,300 ounces (Q4 2017: 473,500 ounces).

2019 Outlook

PGM production outlook (excluding tolling material from Sibanye-Stillwater) for 2019 is between 4.2 - 4.5 million ounces, including platinum production of between 2.0 - 2.1 million ounces and palladium production guidance of between 1.3 – 1.4 million ounces. Production guidance is down on 2018 due to the transition of Sibanye-Stillwater material to a tolling arrangement in place of its concentrate purchased. Purchased production from Sibanye-Stillwater in 2018 equated to 903,900 PGM ounces, including 464,100 platinum ounces and 231,800 palladium ounces. Refined production and sales volumes should increase as the backlog of work-in-progress-inventory is processed in full during 2019.

Johannesburg, South Africa
24 January 2019

Sponsor
Merrill Lynch South Africa Proprietary Limited

Download the Anglo American Platinum Limited Production Report for the fourth quarter ended 31 December 2018