Impala Platinum Holdings Limited · JSE:IMP
Impala Platinum — Royal Bafokeng Platinum — FY2011 Earnings Presentation
39 slides from Impala Platinum's earnings presentation, 2012
Slide 1: Audited Abridged Results for the year ended 31 December 2011
more than AUDITED ABRIDGED RESULTS for the year ended 31 December 2011 mining
Slide 2: Disclaimer
Disclaimer The information presented in this presentation is of a general nature and the forward looking information, opinions and beliefs of the Company and its affiliates are based on various market related assumptions. Changes in market circumstances after the production of the information may im
Slide 3: In Memory of Castigo Mario Ndeve
In Memory of Castigo Mario Ndeve We remember Castigo Mario Ndeve who passed away on 6th February 2012 as a result of injuries sustained during a fall of ground incident at BRPM’s North Shaft. Personal Information • Name : Castigo Mario Ndeve • Occupation : Cheesa (explosives assistant) • Birth Date
Slide 4: Contents
Contents 1. Overview 2. Safety 3. Market Review 4. Operational Review 5. Financial Review 6. Conclusion & Outlook 4
Slide 5: Overview
Overview > . : E ma. |
Slide 6: Good progress against strategy despite challenging year
Good progress against strategy despite challenging year Achievements • Fatality-free year, 1.8 million fatality-free shifts by year-end • Landmark three-year wage agreement provides stability and focus • Improvement in headgrade (4.35g/t) and recoveries (87.83%) • Styldrift I on track, R323 million
Slide 7: Safety
Safety 7
Slide 8: Encouraging safety performance
Encouraging safety performance Description Unit 2009 2010 2011 Var Var % Fatal injuries No. 1 3 0 3 100% LTIFR /200,000 1.18 1.00 0.90 0.10 10% SIFR /200,000 0.39 0.53 0.47 0.06 12% • Zero fatalities LTIFR SIFR 0.60 • 1.8 million fatality free shifts Dec’11 1.40 0.53 1.18 • Improved LTIFR and SIFR 1
Slide 9: Safety stoppages
Safety stoppages Classification Blasting Fumes, 1.7% Ventilation, 8.9% Scraper Operations, 21.5% Support, 64.2% Ground • No of Stoppages : 12 Conditions, 3.7% • Lost milling tonnes : 91.6 kt • Ounces lost : 11.5 koz (4E) • Increase in unit costs : 16.1 R/t 9
Slide 10: Market Review
Market Review 10
Slide 11: 2011 – a year of two quite different halves for PGMs
2011 – a year of two quite different halves for PGMs 1st half of 2011: • Characterised by the earthquake and tsunami in Japan • Platinum prices pushed to the US$1 850/oz level – This encouraged recycling of around 300koz of platinum jewellery ,capping any further price increase 2nd half of 2011: • I
Slide 12: Price forecast for platinum, palladium and rhodium
Price forecast for platinum, palladium and rhodium PGM price forecasts (2011 money terms) 5 000 4 500 4 000 3 500 3 000 $/oz 2 500 2 000 1 500 1 000 500 0 2009 2010 2011 2012 2013 2014 2015 Pt Pd Rh 3E Source: SFA Oxford 12
Slide 13: Recovery in demand despite events in 2011
Recovery in demand despite events in 2011 Autocatalysts • Platinum demand was up 12% to 3.48 Moz in 2011 (still 811 koz down on 2007 peak) • Palladium demand rose 5% to 5.77 Moz (718 koz higher than in 2007) • Rhodium demand was 4% higher at 871 koz (105 koz lower than 2007 levels) Jewellery • Gross
Slide 14: Operational Review
‘Operational Review Cy
Slide 15: Mining
Mining Description Unit 2009 2010 2011 Var Var % Tonnes delivered - Total kt 2 177 2 366 2 284 -82 -3% Tonnes delivered - MER kt 2 158 2 288 2 026 -262 -11% Tonnes delivered - UG2 kt 19 78 258 180 232% Working cost development km 21 29 27 -2 -7% Stoping to development replacement rate m 2/m 31.8 35.
Slide 16: Concentrating
Concentrating BRPM Concentrator Recovery (4E) Description Unit 2010 2011 Var Var % 90.0 10.0% 87.8 Tonnes milled - Total kt 2 407 2 305 -102 -4% 88.0 86.3 9.0% 86.5 Tonnes milled - M ER BRPM kt 2 329 2 047 -282 -12% 86.0 8.0% Tonnes milled - UG2 BRPM kt 51 116 65 128% 84.0 7.0% Tonnes milled - UG2 T
Slide 17: Operating strategy
Operating strategy Expand UG2 production • Shallow UG2 accessible on levels where Merensky is depleted • Requires significant initial development (10m2/m) Increase stopable reserves • Development replacement rate (30 m2/m) • Ledging and equipping – restructuring / resources • Re-development resource
Slide 18: Labour
Labour 7 500 Operating Labour Description Unit 2009 2010 2011 Var Var % 7 000 6 793 Labour - total No. 7 497 7 670 7 942 -272 -4% 6 605 6 553 Labour - working cost No. 6 605 6 793 6 553 240 4% 6 500 Labour - capital No. 892 877 1 389 -512 -58% 6 000 2 Stoping effeciency - total m /Crew 358 349 318 -
Slide 19: Operating Expenditure
Operating Expenditure Description Unit 2009 2010 2011 Var Var % Cash operating costs R'm 1,516 1,700 1,802 -102 -6% Cash unit cost R/t 704 707 782 -75 -11% Cash unit cost R/4E oz 5,616 5,901 6,399 -498 -8% Cash unit cost R/Pt oz 8,629 9,076 9,863 -788 -9% Escalation 60.1 R/t (8.5%) Disruptions 23.6
Slide 20: Operating Expenditure (continued)
Operating Expenditure (continued) Process Costs Cost Breakdown 900 2010 2011 800 Utilities Utilities 7% 124 8% 700 Sundries 12% Sundries 104 112 Labour 13% Labour 40% 38% 600 120 99 105 R/t milled 500 Stores 20% Stores 20% 400 Contractors Contractors 21% 21% 300 539 501 490 200 100 Operational flexi
Slide 21: Capital Expenditure
Capital Expenditure Description Unit 2010 2011 Var Var % Total capex Rm 967 1 164 196 20% SIB Rm 98 146 48 49% Replacement Rm 380 379 -1 0% Phase II Rm 304 209 -95 -31% Phase III Rm 60 167 107 176% BRPM UG2 Rm 14 3 -12 -82% Expansion Rm 490 638 149 30% Styldrift I Rm 480 636 155 32% BRPM Concentrato
Slide 22: BRPM Replacement Projects
BRPM Replacement Projects Phase II (Extend N# and S# from level 6 to level 10) Description Unit Plan Act Var • North Shaft complete N# % complete % Complete Complete Complete • South Shaft completion Sept 2012 S# % complete % 95% 90% -5% • Estimate at completion - R53 million N# completion date mont
Slide 23: Styldrift I Project
ROYAL BAFOKENG QD Prati Styldrift | Project
Slide 24: Styldrift I Project
Styldrift I Project Desc ription Unit Plan Ac t V ar Overall progress % 25.4 25.8 0.4 Shaft sinking m 510 371 -140 Main shaft m 264 219 -45 Service shaft m 246 152 -94 Milestone dates Unit Plan Forec ast V ar Main shaft 594 level date 2012 Q2 2012 Q3 -3 months Main shaft sink date 2014 Q1 2014 Q2 -3
Slide 25: Styldrift I Project (continued)
Styldrift I Project (continued) R millions Description Unit Mining Concentrator Total 3 000 2 500 Authorised and Contingency Rm 6,289 1,422 7,711 2 000 Escalation Rm 3,153 938 4,091 1 500 1 000 Total Nominal Rm 9,442 2,360 11,802 500 Total Cost to Date Rm 1,229 9 1,238 0 2008 2009 2010 2011 2012 201
Slide 26: Styldrift I Project (continued) – Studies
Styldrift I Project (continued) – Studies Shaft bottom infrastructure • Deepen main and service shafts by 18m & additional silo ‐ Improved geotechnical environment ‐ UG2 access • 40 million / 5 weeks Bord & pillar layout • Complete design - Q1 2012 • Impact on operating cost, extraction rates and ra
Slide 27: Styldrift II
ROYAL BAFOKENG Styldrift I Detar {| a 2
Slide 28: Styldrift II
Styldrift II • Desktop study – Desktop study completed in March 2011 – Concluded a positive business case • Concept study – Concept study completion Q1 2012 – Reviewing initial capex, ramp-up and opex assumptions • Pre-feasibility and feasibility studies • Exploration drilling program – Total of 42
Slide 29: Financial Review
Financial Review 29
Slide 30: Key financial performance indicators
Key financial performance indicators % Normalised Description Unit 2011 2010 % Change change Average basket price R/Pt oz 16,282 15,555 4.7 4.7 Average Rand:US$ received R/US$ 7.26 7.30 0.5 0.5 Revenue Rm 2,974.9 2,106.8 41.2 2.1 Cost of sales Rm 2,408.7 1,608.1 49.8 11.6 Gross profit Rm 566.2 498.7
Slide 31: Key financial performance indicators (continued)
Key financial performance indicators (continued) Description Unit 2011 2010 % Change Headline earnings Rm 273.7 270.2 1.3 Weighted average shares outstanding #m 163.7 141.0 16 HEPS R/share 1.67 1.91 12.6 Fair Value depreciation and amortisation R/share 0.52 0.83 Optimisation project costs R/share 0.
Slide 32: Key financial performance indicators (continued)
Key financial performance indicators (continued) Description Unit 2011 2010 % Change Cash generated by operating activities Rm 1,025.1 785.3 30.5 Cash, net of debt (incl. pref share investment) Rm 1,364.1 1,150.3 18.6 Capital expenditure (100% BRPM) Rm 1,163.6 976.1 20.3 Gross profit margin % 19.0 2
Slide 33: Revenue contribution by metal
Revenue contribution by metal Average price 2011 Description achieved* Ru Sales volume 0.9% 2010 (US$) Cu Ir 0.7% Co Au 2.4% 0.4% 2.9% Platinum (oz) 182,712 1,697/oz Rh 6.7% Pt Ni Pd Palladium (oz) 74,820 720/oz 9.8% Pd Rh Au Cu Ni Pt Ru Ir Gold (oz) 9,806 1,716/oz 10.9% 65.3% Co Rhodium (oz) 14,260
Slide 34: Cost of sales breakdown
Cost of sales breakdown 2011 2011 2010 2010 Description R million % of Total R million % of Total Labour 673.9 35.7% 489.5 39.7% Utilities 144.5 7.6% 87.6 7.1% Contractor costs 377.0 19.9% 264.1 21.4% Materials and other mining costs 583.3 30.9% 377.6 30.6% Total cash costs excl once–off costs 1,778
Slide 35: Headline earnings variance analysis
Headline earnings variance analysis 1200 145.7 14.6 198.0 467.6 53.2 128.3 1000 682.1 800 52.0 101.0 600 10.9 131.4 17.3 8.4 136.2 43.7 54.5 400 271.7 1.5 273.7 270.2 200 0 35
Slide 36: Cash flow analysis
Cash flow analysis 2500.0 326 1 147 2000.0 1 025 1500.0 250 15 1 364 R million 4 1 099 1000.0 899 500.0 0.0 Cash and cash Cash generated by Settlement of Capex Other Cash and cash Initial investment Dividends Cash and cash equivalent 1 Jan operations RPM receivable equivalent 31 capitalised to date
Slide 37: Conclusion & Outlook
Conclusion & Outlook 37
Slide 38: Challenging year ahead
Challenging year ahead • Downgrading of demand growth due to weaker macro economic outlook • Medium-term demand fundamentals remain overwhelmingly in favour of palladium • Cost reduction remains key focus • Safety performance encouraging • Styldrift I shaft sinking gains momentum and project below b
Slide 39: Thank you
Thank you a x - , | ~ ; is 39
Royal Bafokeng Platinum — FY2011 Earnings Presentation on 6ix