arm platinum moving into overdrive rbc platinum conference 16 may 2008
TRANSCRIPT
ARM Platinum
Moving into overdrive
RBC Platinum conference
16 May 2008
2
Perfect diversified commodity mix
90%
3
Growing diversified commodity business
Platinum Group Metals
37.0%
Nkomati*20.3%
Iron Ore20.6%
Manganese19.3%
Chrome2.6%
Thermal Coal0.3%
12 months to 30 June 2007 6 months to 31 December 2007
Attributable EBIT split between operations
Nkomati*13.6%
Iron Ore12.6%
Manganese41.2%
Platinum Group Metals
27.0%
Thermal Coal0.3%
Chrome5.3%
* Nkomati operating profit split:
Nickel (52%) and Chrome (48%)
* Nkomati operating profit split:
Nickel (86%) and Chrome (14%)
Attributable EBIT split between operations calculated from published EBIT (or segmental results) before corporate and exploration expenses and excluding the 45% minority interest in Two Rivers
4
ARM Platinum volume growthExplorers, Juniors,????, Majors
-
50
100
150
200
250
300
350
400
450
2005a 2006a 2007a 2008e 2009e 2010e
Tho
usan
d ou
nces
.
Modikwa Two Rivers Nkomati
Attr
ibut
able
PG
MS
(‘0
00 o
z)
5
Power mitigation
• Dayshift – Nightshift
• Compressed Air vs Diesel / Electric
• Diesel / Gas Generators
• Stockpile management
• Shallow Deposits / Opencast
6
• Western – Eastern – North – Zimbabwe
• Reef Type, Width, Grade, Prill Split, F/W and H/W
• Dip, Strike (4 – 5 km), Depth
• Mining Method – Production Statistics
• Infrastructure - Water,power,road,rail,towns
• Project Management
• Timing
• Capex
• Opex
Platinum Mine Optimisation
7
Mine project – time versus depth
Mine development
0 years 8 years
Depth from surface
500m
OpencastTwo Rivers
Modikwa
4 years
Plant
Nkomati
8
Two Rivers: Introduction
• Eastern Limb of Bushveld Complex
• PGM 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
• Owner operator
• Outsource concentrator & tailings operations
• Undertaking to employ local labour
9
Two Rivers: Mine – Shallow Deposit
• Dec 01 : Land Purchase
• Sep 02 : Bulk Sample Shaft
• Jan 04 : Trial Mining
• Jun 05 : Project Approval
• Aug 06 : Plant Commissioning (1 month early and 12% below budget)
• Jan 07 : North Decline
• Mar 07 : Plant Full Production
• Mar 08 : UG Mining Full Production
7 Years
10
Two Rivers: Geology
11
Two Rivers UG2 Reef Section : North - South
12
Analyst Visit
Two RiversResource & Reserve Statement
As at Feb 2008
Moz Moz
Pt Pd Rh Au (3E+Au) (5E+Au) Pt 6E
UG2 ResourcesMeasured 14.78 2.54 1.56 0.47 0.05 4.62 5.52 1.21 2.62
Indicated 41.69 2.05 1.23 0.38 0.04 3.70 4.46 2.75 5.98
Total 56.47 2.18 1.32 0.40 0.04 3.94 4.74 3.96 8.60
UG2 ReservesStockpile 0.10 1.89 1.27 0.35 0.04 3.55 4.10 0.01 0.02
Proven 10.32 2.10 1.27 0.38 0.04 3.78 4.58 0.73 1.48
Probable 27.74 1.85 1.09 0.35 0.03 3.33 4.01 1.60 3.46
Total 38.16 1.92 1.14 0.36 0.03 3.45 4.17 2.34 4.96
Category MtGrade (g/t)
Merensky Reef 120m above UG2
13
Two Rivers: Mining
14
Two Rivers: Decline Cross Section
Analyst Visit – Sep 07
560m
430m
15
Two RiversOperational Summary Statistics
2007 SteadyActual State
Safety
LTIFR rate 3.6 - Fatal no 1 -
Technical
ROM '000 t 1,277 3,068 Tonnes Milled '000 t 2,044 2,700 Head Grade 4E g/t 3.49 3.42 Concentrator Recoveries 4E % 77.40 82.50 Ounces produced '000 oz 154 250 Platinum Produced '000 oz 88 133
Financial
Operating Cost R'000 424,876 Capex R'000 488,035 Operating Profit R'000 891,005 Net Profit R'000 492,791
KPI's
Cost per ton mined R/ton 333 - Cost per ton milled R/ton 208 275 Cost per Platinunm Ounce R/Pt oz 4,834 - Operating Margin % 69 - Capex to Revenue % 35 6
Description Unit
16
-
50,000
100,000
150,000
200,000
250,0002
00
3
20
04
20
05
Jul-
06
Au
g-0
6
Se
p-0
6
Oct
-06
No
v-0
6
De
c-0
6
Jan
-07
Fe
b-0
7
Ma
r-0
7
Ap
r-0
7
Ma
y-0
7
Jun
-07
20
08
20
09
20
10
20
11
20
12
To
ns
History Actual Future Plan
Ton
s p
er M
onth
Two Rivers: Tonnes Milled Profile
Unprotected Strike
Ramp Up
17
0
100
200
300
400
500
600
700
800
900
WLT
R (
AM
S)
CT
RP
(A
QP
)
Kro
onda
l (A
QP
)
Eve
rest
(A
QP
)
Mim
osa
(AQ
P)
Aqu
ariu
s G
roup
(A
QP
)
Mim
osa
(IM
P)
Kro
onda
l (A
MS
)
Tw
o R
iver
s (A
RI)
Zim
plat
s (Z
IM)
Zim
plat
s (I
MP
)
Mot
otol
o (A
MS
)
Mar
ikan
a (A
QP
)
PP
Rus
t (A
MS
)
Impl
ats
Gro
up (
IMP
)
Impa
la (
IMP
)
Mar
ula
(IM
P)
Mar
ikan
a (L
ON
)
Mar
ikan
a (A
MS
)
Ang
loP
lat G
roup
(A
MS
)
Uni
on (
AM
S)
Pan
dora
(LO
N)
Lonm
in G
roup
(LO
N)
Mod
ikw
a (A
RI)
Am
ande
lbul
t (A
MS
)
Rus
tenb
urg
(AM
S)
BR
PM
(A
MS
)
Mod
ikw
a (A
MS
)
Lim
popo
(LO
N)
Nor
tham
(N
HM
)
Lebo
wa
(AM
S)
Tw
icke
nham
(A
MS
)
ZA
R/to
n C
ash
Ope
ratin
g C
ost
ZAR/t IRS/t AMS other/t
Industry Cost CurveR/ton Milled 2007
Two RiversSteady State:
275 R/t
v
v
Source: BJM research
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Locality – Modikwa Platinum Mine
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Total lease area 14 278 haMpumalanga Province
Modikwa Platinum Mine – lease area
24.8km
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ModikwaResource Classification – Tonnage
100 % JV (Millions)
• Resource discounted for geological losses
Merensky UG2 Total
Measured 18.7
(8.6%)
50.7
(24.8%)
69.4
(16.4%)
Indicated46.8
(21.5%)
64.4
(31.5%)
111.2
(26.3%)
Inferred152.0
(69.9%)
89.6
(43.8%)
241.6
(57.2%)
Total 217.5 204.7 422.2
December 2007 Resource Statement
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UG2 Investment Centres
N3#N1#N2# S1#
S2#S3#
Merensky Investment Centres
N3#N1#N2#
S2#S1#
ModikwaBoth Reefs under continuous evaluation
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Footwall Drive
ASG
PILLARS
Footwall Drive
20
0 m
4 m
210 m
105 m
MiningDirection
MiningDirection
Mined Out Area
Unmined AreaSee Enlargement
30
m
8 m
10 m
4 m
Enlargement
Cross Cut
Travelling Way & SO
Muck Bay
Final Layout
ModikwaBreast stoping layout with footwall development
23
0
20
40
60
80
100
120
'Dec 07 'Dec 08 'Dec 09 'Dec 10
No
. o
f P
an
els
Standard Final Breast spacing at 210 m Interim Breast spacing at 100m Breast from Dip spacing at 70m
• Only breast mining is taking place (dip mining completely phased out)
• All panels are expected to be on the standard 210m breast spacing by 2010
Modikwa Conversion from Dip to Breast Mining
24
0
50000
100000
150000
200000
250000
To
ns
Mill
ed
Other Sources 75,545 44323 22886 28094 4,843 8,419 11,907
HG UG2 119,455 157,427 174,114 189,156 205,824 176,677 197,934
'02 '03 '04 '05 '06 '07 H1 '08
Merensky trial mining
ModikwaAverage Tons Milled per Month
• H1 07 – Strike
• Steady State – 240 kt / month
25
0
1
2
3
4
5
g/t 4
E
UG2 HG BUH 3.22 4.28 4.47 4.46 4.40 4.51
'03 '04 '05 '06 '07 H1 '08
ModikwaBuilt-up Headgrade
26
Nkomati Nickel Project
Nkomati Nickel is a 50:50 JV between ARM and Norilsk Nickel
Total nickel in concentrate: 20 500 tpa Average grade: 0.35% Ni; Total plant capacity: 625 ktpa
PCMZ Nickel in concentrate: 5 000 tpaAverage grade: 0.25%Ni; PCMZ plant: 250 ktpm
MMZ Nickel in concentrate: 15 500 tpaAverage grade: 0.45%Ni; MMZ plant: 375 ktpm
Project releasedSept 2007
Open cast mine expected to produce at a steady state C1 cash cost of c.$3.50/lb
Ramp-up: 2009
Full production: 2011
Capital cost of R3.2 billion, >20% committed, mainly funded from Nkomati cash flows
CHROME a significant value contributor
• Oxidised lumpy chrome sales of 1 mtpa for 4 yrs
• Chrome concentrate sales of 1 mtpa (2011) from PCMZ plant completed and processing of chrome fines currently being stockpiled
Other By-products include:
• 110 000 ounces of PGM (Pt:Pd 1:2.7)
• 9 000 tpa Copper
• 250 tpa Cobalt
27
Nkomati
28
Kalplats
• Exploration
• Pre-feasibility in progress
• Opencast Potential
• Platinum Australia presentation later
29
2 x 2010 Delivering on growth plans in ARM Platinum
Operation
(100% basis)
Project
stage
Production in
FY 2007
At steady state
Life of mine
(years)Production Financial year
ModikwaApproaching
steady state274 174 PGMs 350 000 oz PGMs 2008/9
30 years on the
UG2 orebody
Two Rivers At steady state 184 099 PGMs 220 000 oz PGMs 200820 years on the
UG2 orebody
Nkomati Interim Ramp-up
4 418 t Ni
2 788 t Cu
46 101 oz
PGMs
5 500 t Ni
2 500 t Cu
21 000 oz PGMs2008
10 years without
large scale
expansion
released
Nkomati Large
Scale Expansion
Project
Released
and
constructing
n/a 20 500 t Ni
9 000 t Cu
110 000 oz PGMs2011 20
Nkomati Chrome Production 584 177 t 1 000 000 tpa 2007 5
Kalplats PGM
ProjectExploration n/a n/a n/a n/a
30
ARM Platinum Summary
• Eastern Limb
• Shallow, Long Life Assets
• Established PGM Producer
• Positive Cash Flows
• Growth Potential
31
Questions?