African Rainbow Minerals Limited · JSE:ARI
African Rainbow Minerals — Investor Presentation (October 2005)
51 slides from African Rainbow Minerals's investor presentation, Oct 11, 2005
Slide 1: Facility Visit
Facility Visit 11 October 2005
Slide 2: Agenda
AGENDA ● Safety ● Ore body ● Mining methods ● Production ● Operating costs ● Capital expenditure ● Human resources ● Key business issues
Slide 3: Locality – Modikwa Platinum Mine
Locality – Modikwa Platinum Mine ZWARTKOPPIES 413 KS BRAKFONTEIN 464 KS WATERKOP 113 KT KLIPFONTEIN 465 KS PASCHASKRAAL MECKLENBURG 466 KS 112 KT AVOCA 472 KS CROYDON DE KAMP TWICKENHAM 120 KT 507 KS 114 KT SURBITON 115 KT BALMORAL 508 KS QUARTZ FOREST HILL HACKNEY 117 KT THE SHELTER HILL 116 KT 121
Slide 4: Location
Location JV Area GARATOUW 282 KT NOOITVERWACHT 324KT MODIKWA PLATINUM MINE EERSTE CELUK 322 KT Legend Mining Licence @ No. 2 Winze @ North Shaft (Decline) © Mid Shaft (Decline) © South Shaft (Decline) © Onverwacht Hill (Adits) = UG2 Reef Workings — Merensky Reef Outcrop —UG2 Reef Outcrop MOOIHOEK 25
Slide 5: Safety
Safety
Slide 6: Lost time injury frequency rate
Lost time injury frequency rate 5.00 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 2002 2003 2004 YTD Act/F_cast 1.51 3.39 4.56 2.79
Slide 7: Fatalities
Fatalities 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 2002 2003 2004 YTD Act/F_cast 1 3 3 1
Slide 8: Geology Resources/Reserves
Geology Resources/Reserves
Slide 9: Modikwa Platinum Mine – lease area
Modikwa Platinum Mine – lease area N km .8 24 Total lease area 14 278 ha Not to scale Mpumalanga Province
Slide 10: Modikwa Platinum Mine – mining area
Modikwa Platinum Mine – mining area Base case Phase 1 North shaft South shaft Phase 2 extension extension Phase 3 l Deepening of North shaft declines by 1 level commenced in 2005.
Slide 11: Stratigraphic column in proximity of UG2
Stratigraphic column in proximity of UG2 ● Outcropping Merensky & UG2 , Westerly Dip ~11° ● Merensky to UG2 separation HW approximately 260m Triplet 3 12cm ● Variable middling of triplets and Triplet 2 12cm Leuconorite Parting Plane (LPP) to 15m UG 3A 5cm Triplet 1 Top Reef Contact (TRC) on UG2 10m
Slide 12: Optimal Stoping Cut
Optimal Stoping Cut (per shaft area) 4 Leuconorite Unit 17 10 5 50 10 8 21 30 25 7 8 TRC 8 3 4 107 Planned 97 Planned 101 Planned UG2 58 61 56 BRC 10 20 45 21 20 21 21 16 NORTH SHAFT SOUTH SHAFT HILL ADITS l Mine average planned at 102 cm
Slide 13: Vertical grade distribution in UG2
Vertical grade distribution in UG2 North Shaft South Shaft Average g/t 4E: North 5.65 South 5.99 Total 5.81 Reef channel Hanging wall Foot wall
Slide 14: 2004 UG2 Resource Categories
2004 UG2 Resource Categories (Data Mine model) Measured Resource Indicated Resource Inferred Resource
Slide 15: 2004 Merensky Resource Categories
2004 Merensky Resource Categories (Data Mine model) 117 boreholes Indicated Resource Inferred Resource
Slide 16: Resource & Reserve statement – 2004
Resource & Reserve statement 2004
Slide 17: Exploration status
Exploration status • Phase 1 footprint complete by end 2006 • Phase 2 drilling commenced in line with current exploration programme • 3D seismic will be conducted in 2006 over a target area on North and South Shafts • Merensky Exploration continuing – trial mining to commence in 2006
Slide 18: Drilling Programme 2005-2008
Drilling Programme 20052008 Phase 1 Phase 2 2005 2005 S# 2006 2007 2005 N# 2008 2006 Infill
Slide 19: On Mine – Exploration drilling
On Mine Exploration drilling Surface Drilling 45000 40000 35000 30000 metres 25000 20000 15000 10000 5000 0 2003 2004 2005 2006
Slide 20: Mining Method
MINING METHOD
Slide 21: Original Design
ORIGINAL DESIGN • Twin decline shaft systems • Vehicle access decline • Belt decline • Main strike development onreef • Conventional downdip stoping • Twin raises separated by 5m pillar • 90 cm stoping width • Mechanised development and tramming • Flat management / supervisory structures • Self di
Slide 22: Changes to Original Design
CHANGES TO ORIGINAL DESIGN • Chairlift decline access • Main strike development in the footwall • Stoping changed from downdip to breast • 102 cm stoping width • Introduced night shift • Traditional management structure • Ball milling to increase capacity • 240 ktpm, 162 kozpa
Slide 23: Downdip Twin Raise Reef Drive layout
Reef Drive Diagonal Muck Bay Dip Pillar Mining Twin Reef Raise Direction Mined Out Area Unmined Area 200 m 210m 70m Reef Drive Downdip Twin Raise Reef Drive layout
Slide 24: Downdip Single Raise Reef Drive layout
Reef Drive Diagonal Muck Bay Strike Pillar Dip Pillar Single Reef Raise Mining Direction Mined Out Area Unmined Area 200 m Enlargement 210 m 210m 6m 80° 2m 70m 3m 4m See Enlargement 30 m Reef Drive Downdip Single Raise Reef Drive layout
Slide 25: Breast Footwall layout
Footwall Drive Mining Mining Direction Direction ASG 105 m PILLARS Mined Out Area Unmined Area See Enlargement 200 m 210 m Enlargement 10 m 4m 4m 30 m 8m Footwall Drive Muck Bay Cross Cut Breast Footwall layout Travelling Way & SO
Slide 26: Breast Footwall layout
‘Cross Cut = 5m x 5m_ Travelling Way = 2.5m x 3.0m Diagonal = 2.5m x 2.5m Breast Footwall layout Raise @ 10° Diagonal Muck Bay Travelling Way @ 34° Cross Cut __~Footwall Drive
Slide 27: Current Mine Design
Current Mine Design ies BS 2 . / ’ / MINE DESIGN LOW 200 / aa
Slide 28: Current Mine Design – North Shaft
Current Mine Design – North Shaft
Slide 29: Production sources
Production sources (000’s tons per month) Production area 2005 2006 Steady state North Shaft 80 100 120 South Shaft 60 81 120 Hill 35 38 Mid Shaft 10 14 Low grade dev. 25 TOTAL 210 233 240 29
Slide 30: Development & Stoping Profiles
Development & Stoping Profiles
Slide 31: Conversion to footwall strike development & breast stoping
Conversion to footwall strike development & breast stoping Development required to generate ore reserves Breast mining Dip mining Footwall drives Twin raise & reef drives Required to Required to m²/metre replace 50 000 m²/metre replace 50 000 m² m² m²/ Total Dev 53 935 17 2 874 m²/ Prim. R/W, TW, 1
Slide 32: Total Primary Development metres / month
Total Primary Development metres / month (Excludes # Sinking) 3,500 3,000 2,500 Metres 2,000 1,500 1,000 500 0 '03 '04 H1 05 History 3,184 2,002 2,108 l 2003 to 2004 reduction due to single raise dip mining l At steady state breast requires less development than dip to generate the same ore reserves
Slide 33: Immediately Available Reserves (Raises Holed)
Immediately Available Reserves (Raises Holed) 20 18 17.8 17.3 18 16 14 12 months 12.1 10 8 7.7 6 4 2 0 2004 2005 * 2006 2007 2008 * Revised dip method increased rate of ore reserve build up l Includes depletion of Hill and mid shaft areas l Transition to 100% underground production
Slide 34: Face Length Build-up
Face Length Buildup 10,000 9,000 8,000 7,000 Metres 6,000 5,000 4,000 3,000 2,000 1,000 0 Aug '05 'Mar '06 'Sep '06 'Jun '07 Immediately available (Holed) Available for equipping (Holed + Ledged) Immediately stopable (Holed + Led. + Equip.) Resourced ( Stoping) l Planned ratio – stopable: stoping 1
Slide 35: Monthly area mined
Monthly area mined (m ) 2 40,000 35,000 30,000 25,000 m² 20,000 15,000 10,000 5,000 0 '03 '04 H1 05 History 22,195 34,842 37,486 l Planned steady state – 100% underground at 50 000m2 / month
Slide 36: Stoping Width
Stoping Width 115 110 105 100 cm 95 90 85 80 '03 '04 H1 05 History 113 103 105 l Steady state mine average planned at 102 cm by end 2006
Slide 37: Average Tons Milled per month
Average To ns Milled per month 250,000 200,000 Tons m ille d 150,000 100,000 50,000 2002 2003 2004 H1 05 Other Sources 75,545 44,323 22,886 38,124 HG UG2 119,455 157,427 174,114 181,543
Slide 38: Grade g/t 4E
Grade 5.00 4.00 3.00 g/t 4E 2.00 1.00 0.00 2002 2003 2004 H1 05 Built Up Grade 2.52 3.23 4.09 4.13 l Includes low grade ‘other’ sources – depleted by end 2005 l Current underground average grade 4,45 g/t
Slide 39: Plant 4E Recovery
Plant 4E Recovery 90.00% % Recovery 4E 85.00% 80.00% 75.00% 70.00% 2002 2003 2004 H1 05 4E Recovery 80.50% 83.60% 84.00% 84.09% ● Steady state planned recovery 86% ● Achieved 240 ktpm in May 2005 ● Expert systems in place – circuit optimisation ongoing
Slide 40: Equivalent refined Pt Oz / month
Equivalent refined Pt Oz / month 11.00 10.50 10.00 9.50 Pt Oz's (000's) 9.00 8.50 8.00 7.50 7.00 6.50 6.00 '03 '04 H1 05 History 7.67 9.52 10.69
Slide 41: Operating Costs
Operating Costs
Slide 42: Cash cost / ton milled
Cash cost / ton milled Cash cost / Ton milled 400 350 300 R / Ton Milled 250 200 150 100 50 0 2002 2003 2004 H1 05 Cash cost / ton milled 162 296 349 346
Slide 43: Cash cost / Pt oz
Cash cost / Pt oz Cash cost / Equivalent Pt oz refined 9,000 8,000 7,000 6,000 R / Pt oz 5,000 4,000 3,000 2,000 1,000 0 2002 2003 2004 H1 05 Cash cost / Pt oz 5,732 7,789 7,225 7,105 l Lower platinum content of Modikwa ore results in higher unit cost per Pt oz, comparable cost per PGM oz
Slide 44: Operating Costs
Operating Costs ● Current cash costs per ton milled and Pt oz high as build up continues. ● Drivers of cost reduction ● Volume increase ● 4 mining areas to 2 ● 1,5m of equipped face per m face blasted ● Novice workforce moving up learning curve ● Less development required ● Cost reduction initiative
Slide 45: Capital program
Capital program
Slide 46: Capital expenditure (R000's)
Capital expenditure (R000’s) Total Modikwa 1,200,000 1,000,000 800,000 600,000 400,000 200,000 Error H1 + R140m 2002 2003 2004 H1 05 Total Modikw a 1,077,952 438,241 147,212 302,741 Total Modikw a • Approximately R 160 m to be spent on average on LOM ongoing / replacement capital • Approximately
Slide 47: Capital Expenditure
Capital Expenditure Main Items for 2005 ●Burgersfort Housing Project R 125 million ●Flag Boshielo Damwall R 19 million ●Ore reserve development R60 million and commencement of North Shaft deepening by 1 level ●Off mine capex largely complete
Slide 48: Human Resources
Human Resources
Slide 49: Employee Relations
EMPLOYEE RELATIONS ● Community and employee expectations high ● Nonprocedural workplace disruptions – higher than normal ● Resistance to management discipline ● Significant management effort and focus to educate and mentor workforce and improve relationships ● Mining Charter Compliance Strategy in
Slide 50: Human Resources Development
HUMAN RESOURCES DEVELOPMENT • Underground and surface training centres. • Increased training of supervisors. • Fall Of Ground competency compliant by Dec 2005.
Slide 51: Key Business Issues
KEY BUSINESS ISSUES • Improved safety performance • Smooth transition from down dip to breast stoping and moving drives into footwall • Further improve efficiency of the mechanised development and tramming • Improve efficiencies of stoping teams • Achieve planned volume increase • Major transition c
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