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ROYAL BAFOKENG PLATINUM LIMITED - Quarterly Review and Production Report for the Period 1 July to 30 September 2018 and Styldrift I Project Update

Release Date: 22/10/2018 11:03
Code(s): RBP RBPCB     PDF:  
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Quarterly Review and Production Report for the Period 1 July to 30 September 2018 and Styldrift I Project Update

ROYAL BAFOKENG PLATINUM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2008/015696/06)
JSE share code: RBP
ISIN: ZAE000149936
Company code: RBPD
Bond code: RBPCB
ISIN: ZAE000243853
(“RBPlat” or the “Company”)

ROYAL BAFOKENG PLATINUM LIMITED QUARTERLY REVIEW AND PRODUCTION REPORT FOR THE PERIOD
                1 JULY TO 30 SEPTEMBER 2018 AND STYLDRIFT I PROJECT PROGRESS UPDATE
                   LTIFR AND SIFR IMPROVE BUT SAFETY PERFORMANCE REMAINS AN OPERATIONAL FOCUS

                                  STYLDRIFT ON TRACK TO DELIVER 150KTPM BY YEAR END

OVERVIEW
    •    17.9% improvement in our lost time injury frequency rate
    •    Disappointingly, experienced two fatal accidents during the quarter
    •    18.4% increase in tonnes delivered to concentrators
    •    18.9% increase in tonnes milled
    •    14.7% increase in 4E metals in concentrate
    •    15.4% increase in platinum metal in concentrate
    •    5.1% increase in cash operating costs
    •    54.3% increase in capital expenditure

SAFETY

The health and safety of our employees remains a key business objective on our journey towards establishing a resilient
operating culture and achieving zero harm. However, despite achieving a million fatality free shifts at our Styldrift project
on 8 September 2018 and recording improvements in both our lost time and serious injury frequency rates, there were
tragically two fatalities at our BRPM operation during the quarter under review.

Mr V Alfeu was fatally injured on 24 July in a scraper winch related accident at BRPM South shaft, whilst Mr F Lenyatsa
was fatally injured in a fall of ground accident on 11 September at BRPM North shaft. The board of directors,
management as well as colleagues at RBPlat wish to extend their sincere condolences to the family and friends of Mr
Alfeu and Mr Lenyatsa.

Notwithstanding the disappointing safety performance for the period under review, we remain confident that our safety
strategy, as evidenced with the million fatality free shifts achieved at our Styldrift project and ongoing focus on leadership
development across all our supervisory and management levels in the business, will result in a resilient operating culture
and allow us to achieve our ultimate goal of zero harm.

Two Section 54 stoppages related to the fatal accidents were issued during the quarter, affecting 14 production shifts
and equating to a loss of 52kt milled tonnes. No safety related stoppages were recorded during the comparative 2017
period.

PRODUCTION

Total tonnes delivered to concentrators for the reporting period increased by 18.4% to 939kt. Styldrift delivered tonnes
increased by 138.9% to 356kt in line with ramp-up requirements to achieve the 150ktpm milestone by year end, whilst
BRPM delivered tonnes decreased by 9.5% to 583kt. The decrease in BRPM delivered volumes is mainly attributable
to production losses incurred as a result of the two Section 54 stoppages.

Total tonnes milled for the quarter increased by 18.9% to 981kt, supported by the higher delivered volumes, with BRPM
contributing 611kt (8.8% lower than the corresponding quarter in 2017) and Styldrift 370kt (138.7% increase compared
to the corresponding quarter in 2017). Merensky tonnes milled amounted to 875kt and UG2 amounted to 106kt, resulting
in the UG2 percentage milled for the quarter reducing to 11% of total tonnes milled compared to 18% in the third quarter
of 2017.

Total delivered and milled tonnes, for the year to date period ended 30 September 2018, have increased by 8.4% and
9.1% to 2 456kt and 2 510kt respectively. This increase in production volumes is as a result of the Styldrift ramp-up
more than offsetting the decline in BRPM volumes due to the deferment of South shaft UG2 in the second half of 2017.

The Maseve concentrator was commissioned during August 2018 and a total of 141kt of Styldrift ore was treated for the
third quarter. The concentrator is operating well and achieving designed throughput and recovery efficiencies. The
BRPM concentrator processed 778kt and 62kt of UG2 ore was toll treated.

The 4E built-up head grade for the quarter reduced by 1.5% to 3.85g/t compared to 2017, despite overall built-up head
grades at BRPM and Styldrift increasing by 0.2% and 12.8%, respectively. The decrease in grade is attributable to the
increased contribution of lower grade development ore from Styldrift to the overall ore mix. Year to date head grade
remains within guidance limits.

Overall concentrator recoveries reduced by 1.9% to 84.5%, with the reduction being attributable to the lower overall
head grade achieved and lower recovery potential of the Maseve plant in its current configuration. However, recoveries
remain in line with expected grade recovery limits.

The 18.9% increase in overall tonnes milled, 1.5% reduction in built-up head grade and lower overall recovery, yielded
a respective 14.7% and 15.4% increase in 4E and platinum metals in concentrate to 102.4koz (4E) and 66.6koz (Pt) for
the quarter.

4E and platinum metal in concentrate production has increased by 9.5% and 10.2% to 267koz and 173koz respectively
for the nine month period ended 30 September 2018.

CASH OPERATING COSTS

Cash operating costs for the quarter amounted to R761 million, representing a 5.1% increase compared to the
comparative 2017 period in line with anticipated above inflation wage increases, offset by ongoing cost control initiatives.

This, combined with the Section 54 related production disruptions at BRPM, resulted in the cash operating cost per
tonne milled increasing by 15.2% to R1 245 and cost per platinum ounce increasing by 16.0% to R16 864 compared to
the third quarter of 2017.

Year to date, the cash cost per platinum ounce has increased 5.9% compared to the comparative period in 2017. BRPM
cash operating unit costs are expected to normalise in the fourth quarter and we remain confident in our ability to achieve
unit cost increases below inflation for the full year.

CAPITAL

Total capital expenditure for the reporting period increased by R332.8 million to R945.8 million compared to 2017.
Styldrift expansion capital expenditure increased by R299.4 million to R877.5 million, with replacement capital
expenditure increasing by R1.4 million to R11.1 million and stay-in-business (SIB) expenditure increasing by R32.0
million to R57.2 million.

Expansion capital expenditure remains aligned with the Styldrift mining, construction and equipping schedule required
to meet the ramp-up schedule as well as the additional capitalisation of operating costs due to the delay in
commissioning of Silo 4.

Replacement and SIB capital expenditure remains aligned with the BRPM North shaft Phase III project and ongoing
operational requirements.

Total capital expenditure for the nine month period ended 30 September 2018 amounted to R2 325.9 million, equating
to a 59.3% increase year-on-year. This increase is mainly attributable to the acceleration of mining and construction
activities in order to support the Styldrift ramp-up schedule, with expansion capital related expenditure increasing by
60.7% from R1 356.0 million to R2 179.6 million.

PROJECTS
BRPM NORTH SHAFT PHASE III PROJECT (REPLACEMENT)

Project expenditure for the quarter amounted to R11.1 million bringing the total project expenditure to date to
R1.1 billion. Expenditure remains aligned with the project progress and construction schedule to complete the scope of
work related to the installation of services and conveyor belts on 14 and 15 levels. Estimated cost at completion is
forecast at R1.2 billion against a budget of R1.4 billion, indicating a potential saving of R200 million.

STYLDRIFT I PROJECT (EXPANSION)

The focus at Styldrift during the quarter under review remained geared towards securing operational resources, ore
reserve development and establishing of infrastructure required to meet the 150ktpm ramp-up milestone by year end.

During the quarter 356kt of ore was delivered to the concentrators at a head grade of 3.36g/t (4E). Mining and
construction activities continued to make steady progress with key items completed during the reporting period being:

    •       1.8km of ore reserve development
    •       Commissioning of ventilation Shaft No.3
    •       Commissioning of two on-reef strike belt sections
    •       Rehabilitation of Silo 4 – with full commissioning of the silo expected in October 2018
    •       Commissioning of additional two trackless workshops

Capital expenditure for the reporting period amounted to R877.5 million bringing the total capital project expenditure to
date to R10.6 billion.

GUIDANCE

Given year to date operational performance, we have lowered the upper end of our previously guided range for the full
year to between 3.35Mt and 3.45Mt at a 4E built-up head grade of between 3.95g/t and 4.00g/t, yielding 4E ounce
production of between 370koz and 380koz. Operating unit cost increases are expected to be below CPI inflation.

Total capital expenditure for the year is estimated to be R3.1 billion, with SIB expenditure forecast to remain at 4% to
5% of operating cost.

                                                                       Quarter 3
                                               Unaudited   Unaudited                 Unaudited      Unaudited
                                                                         2018
                                                 quarter     quarter                year to date   year to date   YTD 2018 vs.
                                                                          vs.
Description                             Unit    ended 30    ended 30                 ended 30       ended 30       YTD 2017
                                                                       Quarter 3
                                               September   September                September      September       % Change
                                                                         2017
                                                  2018        2017                     2018           2017
                                                                       % Change


Safety
SIFR (/1,000,000 hrs)                   rate     2.42        2.45         1.2          2.15           1.70           (26.5)
LTIFR (/1,000,000 hrs)                  rate     3.02        3.68         17.9         2.80           2.98            6.0
Production
Tonnes delivered to concentrators        kt       939         793         18.4         2 456          2 266           8.4
  BRPM                                   kt       583         644         (9.5)        1 697          1 879           (9.7)
  Styldrift                              kt       356         149        138.9          759            387            96.1

Total tonnes milled                      kt       981         825         18.9         2 510          2 301           9.1
  BRPM                                   kt       611         670         (8.8)        1 734          1 907           (9.1)
  Styldrift                              kt       370         155        138.7          776            394            97.0
  Merensky                               kt       875         678         29.1         2 188          1 857           17.8
  UG2                                    kt       106         147         27.9          321            445            27.9
% UG2 of total tonnes milled             %        11          18          39.4          13             19             33.9

 4E built-up head grade                 g/t      3.85        3.91         (1.5)        3.93           3.84            2.3
   4E built-up head grade - BRPM        g/t      4.14        4.13         0.2          4.16           4.07            2.2
   4E built-up head grade - Styldrift   g/t      3.36        2.98         12.8         3.36           2.71            24.0
   4E built-up head grade - MER         g/t      3.83        3.88         (1.3)        3.89           3.82            1.8
   4E built-up head grade - UG2         g/t      4.04        4.05         (0.2)        4.06           3.91            3.8
Recovery- 4E total concentrating         %       84.5        86.1         (1.9)        84.6           85.8            (1.4)
 Metals in concentrate produced
BRPM JV
  4E                                    koz      102.4       89.3         14.7         267.0          243.8           9.5
  Platinum                              koz      66.6        57.7         15.4         173.1          157.1           10.2
  Palladium                             koz      27.1        23.8         13.9         71.0           65.3            8.7
  Rhodium                               koz       5.5         5.1         7.8          14.6           14.3            2.1
  Gold                                  koz       3.2         2.6         23.1          8.3            7.2            15.3
  Iridium                               koz       1.8         1.7         5.9           4.8            4.8            0.0
  Ruthenium                             koz      42.7        21.4         99.5         24.9           24.5            1.6
  Nickel                                 kt      0.681       0.556        22.5         1.773          1.464           21.1
  Copper                                 kt      0.430       0.360        19.4         1.111          0.959           15.8
BRPM
  4E                                    koz      69.5        77.0         (9.7)        197.9          216.1           (8.4)
  Platinum                              koz      45.1        49.8         (9.4)        128.1           139            (7.8)
  Palladium                             koz      18.4        20.5        (10.2)        52.6           57.9            (9.2)
  Rhodium                               koz       3.9         4.5        (13.3)        11.2           12.9           (13.2)


                                                                                  Quarter 3
                                                  Unaudited       Unaudited                    Unaudited      Unaudited
                                                                                    2018
                                                    quarter         quarter                   year to date   year to date   YTD 2018 vs.
                                                                                     vs.
Description                               Unit     ended 30        ended 30                    ended 30       ended 30       YTD 2017
                                                                                  Quarter 3
                                                  September       September                   September      September       % Change
                                                                                    2017
                                                     2018            2017                        2018           2017
                                                                                  % Change

   Gold                                   koz         2.1             2.2            (4.5)        6.0            6.3            (4.8)
   Iridium                                koz         1.3             1.5            (13.3)       3.7            4.3           (14.0)
   Ruthenium                              koz         6.7             7.9            (15.2)      19.1            22            (13.2)
   Nickel                                  kt        0.421           0.450           (6.4)       1.208          1.200           0.7
   Copper                                  kt        0.273           0.297           (8.1)       0.776          0.800           (3.0)
Styldrift
   4E                                     koz        32.9            12.2            169.7       69.1           27.8           148.6
   Platinum                               koz        21.5             7.9            172.2       45.0           18.1           148.6
   Palladium                              koz         8.7             3.3            163.6       18.4            7.4           148.6
   Rhodium                                koz         1.6             0.6            166.7        3.4            1.4           142.9
   Gold                                   koz         1.1             0.4            175.0        2.3            0.9           155.6
   Iridium                                koz         0.5             0.2            150.0        1.1            0.5           120.0
   Ruthenium                              koz        36.0            13.5            166.7        5.8            2.5           132.0
   Nickel                                  kt        0.260           0.106           145.3       0.565          0.264          114.0
   Copper                                  kt        0.157           0.063           149.2       0.335          0.159          110.7
Cash operating costs*
Cash operating cost                       R’m         761             724            (5.1)       2 103          2 153           2.3
Cash operating cost / tonne milled         R/t       1 245           1 081           (15.2)      1 213          1 129           (7.4)
Cash operating cost / 4E ounce            R/oz      10 939           9 393           (16.5)     10 622          9 970           (6.5)
Cash operating cost / Pt ounce            R/oz      16 864          14 535           (16.0)     16 407         15 495           (5.9)

Capital expenditure
Total capital                             R'm        945.8           613.0           (54.3)     2 325.9        1 460.0         (59.3)
   Expansion (Styldrift)                  R'm        877.5           578.1           (51.8)     2 179.6        1 356.0         (60.7)
   Replacement                            R'm        11.1             9.7            (14.4)      32.0           20.0           (60.0)
   Stay-in-business (SIB)                 R'm        57.2            25.2           (127.0)      114.3          84.1           (36.0)
   BRPM mine                              R'm        20.7            20.1            (3.0)       49.1           60.7            19.1
   Styldrift mine                         R'm        25.0             0.3             NM         39.8            5.2          (671.7)
   Maseve mine                            R'm         0.5              0               -          0.5            0.0              -
   Concentrator                           R'm        11.0             4.8           (129.2)      24.9           18.2           (36.8)
   BRPM SIB as a % of operating cost       %          2.7             2.8             2.0         2.3            2.8            17.2

* Costs are calculated excluding Styldrift I on-reef development tonnes, ounces and costs

The information set out in this announcement has not been reviewed and reported on by the Company’s external
auditors.

Johannesburg
22 October 2018

JSE Sponsor:
Merrill Lynch South Africa (Pty) Ltd

For further information, please contact:

Investors:
Lindiwe Montshiwagae
Executive: Investor relations
+27 (0) 10 590 4510
lindiwe@bafokengplatinum.co.za

Media:
Mpueleng Pooe
Executive: Corporate Affairs
+27 (0) 10 590 4515
mpueleng@bafokengplatinum.co.za

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