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ARM Platinum Moving into overdrive

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  • pg 1
									       ARM Platinum

Moving into overdrive
    RBC Platinum conference
               16 May 2008
Perfect di  ifi d      dit   i
P f t diversified commodity mix




          90%




                                  2
                                              Growing diversified commodity b i
                                              G   i di      ifi d      dit business
                              Attributable EBIT split between operations
                 th to    June 2007
           12 months t 30 J                                                     th t      December 2007
                                                                           6 months to 31 D    b

                Iron Ore                                                                         Manganese
                 20.6%                                                                             41.2%
                                      Manganese
Nkomati*                                19.3%                        Iron Ore
 20.3%                                  Chrome                        12.6%                                  Chrome
                                         2.6%                                                                 5.3%

                                                                                                            Thermal Coal
                                                                       Nkomati*
                                      Thermal Coal                                                             0.3%
                     Platinum                                           13.6%
                                         0.3%                                                   Platinum
                   Group Metals                                                               Group Metals
                      37.0%
                      37 0%                                                                      27.0%
                                                                                                 27 0%

  * Nkomati operating profit split:                                     * Nkomati operating profit split:
    Nickel (86%) and Chrome (14%)                                        Nickel (52%) and Chrome (48%)

 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

                                                                                                                           3
                                                             ARM Platinum volume growth
                                                            Explorers, Juniors,????, M j
                                                            E l        J i     ???? Majors


                          450
                          400       Modikwa    Two Rivers    Nkomati
At Thousan ounces0 .oz)




                          350
 ttributable PGMS (‘000




                          300
                          250
             nd




                          200
             P




                          150
                          100
                          50
                            -
                            2005a      2006a       2007a        2008e    2009e    2010e



                                                                                          4
                                          Power mitigation
                                          P      iti ti


•   Dayshift – Nightshift
•   Compressed Air vs Diesel / Electric
•   Diesel / Gas Generators
•   Stockpile management
•   Shallow Deposits / Opencast




                                                         5
                                                   Platinum Mi O ti i ti
                                                   Pl ti    Mine Optimisation


•   Western – Eastern – North – Zimbabwe
•   Reef Type, Width, Grade, Prill Split, F/W and H/W
•   Dip, Strike     km), Depth
    Di St ik (4 – 5 k ) D th
•   Mining Method – Production Statistics
•   Infrastructure - Water,power,road,rail,towns
•   Project Management
•   Timing
•   Capex
•   Opex




                                                                            6
                                  Mine project – time versus depth

  500m
  500



Depth
from
surface

                                            Modikwa

                    Nkomati    Two Rivers
                Opencast
                               Plant

          0 years                           4 years         8 years
                              Mine development


                                                                      7
Two Rivers




             8
                                                        Two Rivers: Introduction

•   Eastern Limb of Bushveld Complex
•   PGM Producer
     •   2.7 Mtpa (225,000 tpm)
     •   220,000           (120,000
         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: Location


North Decline
N th D li




                Analyst Visit – Sep 07                      11
Two Rivers: G l
T   Ri      Geology




                  12
                    Two Rivers
UG2 Reef Section : North - South




                               13
                                                                  Two Rivers
                                                Resource & Reserve Statement
                                                                                  As at Feb 2008


                                                 Grade (g/t)                       Moz    Moz
        Category    Mt
                           Pt     Pd            Rh        Au    (3E+Au) (5E+Au)    Pt     6E

UG2 Resources
Measured           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 Reserves
Stockpile          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




 Merensky Reef 120m above UG2



                                         Analyst Visit                                           14
Two Rivers: Mi i
T   Ri      Mining




                 15
                   Two Rivers: Decline Cross Section




       560m



430m




              Analyst Visit – Sep 07               16
                                                   Two Rivers
                                  Operational Summary Statistics
                                        2007          Steady
             Description      Unit
                                       Actual          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
                Fi     i l
                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
                  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




                                                                     17
                                                                                              Two Rivers: Tonnes Milled Profile

                 250,000


                                                                  Unprotected                                             Ramp Up
                 200,000                                            Strike



                 150,000
      er Month
Tons pe Tons




                 100,000
                 100 000




                  50,000




                       -




                                                                                                                                             May-07
                                                         Aug-06




                                                                                     Nov-06




                                                                                                                           Mar-07


                                                                                                                                    Apr-07
                           2003


                                  2004


                                         2005


                                                Jul-06




                                                                   Sep-06


                                                                            Oct-06




                                                                                              Dec-06


                                                                                                       Jan-07


                                                                                                                Feb-07




                                                                                                                                                      Jun-07


                                                                                                                                                               2008


                                                                                                                                                                      2009


                                                                                                                                                                             2010


                                                                                                                                                                                    2011


                                                                                                                                                                                           2012
                                                                                     History           Actual            Future Plan


                                                                                                                                                                                                  18
                                                                             ZAR              ating Cost
                                                                               R/ton Cash Opera




                                                                   0
                                                                       100
                                                                              200
                                                                                    300
                                                                                          400
                                                                                                 500
                                                                                                         600
                                                                                                                700
                                                                                                                      800
                                                                                                                            900
                                                   WLTR (AMS)
                                                      P
                                                   CTRP (AQP)
                                                Kroondal (AQP)
                                                 Everest (AQP)




     Source: BJM research
                                                  Mimosa (AQP)
                                          Aquarius Group (AQP)
                                                        a
                                                   Mimosa (IMP)
                                                         (
                                                Kroondal (AMS)
                                                                                                   275 R/t


                                                        s
                                               Two Rivers (ARI)
                                                                                                 Two Rivers
                                                                                                Steady State:




                                                         s
                                                  Zimplats (ZIM)
                                                         s
                                                  Zimplats (IMP)
                                                 Mototolo (AMS)
                                                Marikana (AQP)
                                                  PPRust (AMS)




                            ZAR/t
                                             Implats Group (IMP)
                                                         a
                                                    Impala (IMP)




                            IRS/t
                                                        a
                                                   Marula (IMP)
                                                Marikana (LON)
                                                Marikana (AMS)
                            AMS other/t   AngloPlat Group (AMS)
                                                                              v




                                                   Union (AMS)
                                                 Pandora (LON)
                                            Lonmin Group (LON)
                                                       a
                                                 Modikwa (ARI)
                                                         (
                                             Amandelbult (AMS)
                                              Rustenburg (AMS)
                                                   BRPM (AMS)
                                                        (
                                                Modikwa (AMS)
                                                 Limpopo (LON)
                                                                                     v




                                                 Northam (NHM)
                                                 Lebowa ( AMS)
                                             Twickenham (AMS)
                                                                                                                                  R/ton Milled 2007
                                                                                                                                                      Industry Cost Curve




19
Modikwa




          20
Locality – M dik
L   lit            Pl ti    Mine
           Modikwa Platinum Mi




                               21
                      Modikwa Platinum Mi – l
                      M dik   Pl ti    Mine lease area




                        24 8km
                        24.8km




Mpumalanga Province                Total lease area 14 278 ha

                                                                22
                                                                           Modikwa
                                                 Resource Classification – Tonnage
                                                                                (Millions)
                                                                       100 % JV (Milli   )



                                   Merensky              UG2                  Total


                                      18.7               50.7                  69.4
    Measured
                                     (8.6%)             (24.8%)              (16.4%)

                                      46.8               64.4                 111.2
    Indicated
                                    (21.5%)             (31.5%)              (26.3%)

                                     152.0               89.6                 241.6
    Inferred
                                    (69.9%)             (43.8%)              (57.2%)


    Total                            217.5               204.7                422.2


•    Resource discounted for geological losses             December 2007 Resource Statement


                                                                                              23
                                             Modikwa
                  Both Reefs d      ti         l ti
                  B th R f under continuous evaluation

               UG2 Investment Centres
                                                   S3#
N3#                                         S2#
       N2#         N1#         S1#




              Merensky Investment Centres


 N3#                                         S2#
        N2#         N1#         S1#




                                                         24
                                                             Modikwa
                       Breast stoping layout with f t ll d
                       B    t t i l                           l     t
                                           t ith footwall development
Footwall Drive

                                       Mining         Mining
                                      Direction      Direction
         ASG

        PILLARS

      Mined Out Area
      Unmined Area
                          See Enlargement




     Enlargement




                                                                 4m
                                              30 m

Footwall Drive
                                        Muck Bay             Cross Cut

                                                      Travelling Way & SO
                                            210 m                           Final Layout
                                                                                      25
                                            Modikwa Conversion f
                                            M dik   C             Dip to Breast Mi i
                                                           i from Di t B      t Mining

                            120


                            100
                 nels




                              80
        No. of Pan




                              60


                              40


                              20


                               0
                                          'Dec 07                'Dec 08                 'Dec 09                'Dec 10

                        Standard Final Breast spacing at 210 m   Interim Breast spacing at 100m    Breast from Dip spacing at 70m


     y             g
• Only breast mining is taking p
                             g place ( p mining completely p
                                     (dip     g    p                 )
                                                         y phased out)
• All panels are expected to be on the standard 210m breast spacing by 2010


                                                                                                                                    26
                                                                                          Modikwa
                                                                     Average T
                                                                     A            Mill d     Month
                                                                             Tons Milled per M th

                                                                                     Merensky trial
                                                                                        mining
                            250000


                            200000
         Tons Milled




                            150000


                            100000
         T




                             50000


                                 0
                                         '02       '03       '04         '05       '06        '07     H1 '08
                       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


•   H1 07 – Strike
•   Steady State – 240 kt / month

                                                                                                                27
                                                      Modikwa
                                           Built-up H d d
                                           B ilt    Headgrade



           5


           4


           3
g /t 4 E




           2


           1


           0
               '03    '04    '05    '06     '07    H1 '08
UG2 HG BUH     3.22
               3 22   4 28
                      4.28   4.47
                             4 47   4 46
                                    4.46    4 40
                                            4.40    4.51
                                                    4 51



                                                            28
Nkomati




          29
                                                                                Nkomati Ni k l P j t
                                                                                Nk   ti 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 tpa                      MMZ Nickel in concentrate: 15 500 tpa
     Average grade: 0.25%Ni; PCMZ plant: 250 ktpm               Average grade: 0.45%Ni; MMZ plant: 375 ktpm

CHROME a significant value contributor                     Other By-products include:
•   Oxidised lumpy chrome sales of 1 mtpa for 4 yrs        •   110 000 ounces of PGM (Pt:Pd 1:2.7)
•   Chrome concentrate sales of 1 mtpa (2011) from         •   9 000 tpa Copper
    PCMZ plant completed and processing of chrome          •   250 tpa Cobalt
    fines currently being stockpiled


                                                       p                 p          p p
                                                      Open cast mine expected Ramp-up: 2009
       Project l    d
       P j t released
                                                      to produce at a steady state
          Sept 2007
                                                                               Full
                                                      C1 cash cost of c.$3.50/lb production: 2011


     Capital cost of R3.2 billion, >20% committed, mainly funded from Nkomati cash flows


                                                                                                              30
Nkomati




      31
Kalplats




           32
                                            Kalplats
                                            K l l t



•   Exploration
•   Pre-feasibility in p g
                  y progress
•   Opencast Potential
•   Platinum Australia presentation later




                                                   33
                                                                      2 x 2010
                                    Delivering on growth plans in ARM Platinum
                                                               At steady state
Operation            Project           Production in                                         Life of mine
(100% basis)          stage                 FY 2007          Production    Financial year        (years)

                   Approaching                                                              30 years on the
Modikwa                                274 174 PGMs     350 000 oz PGMs          2008/9
                    steady state                                                              UG2 orebody

                                                                                               y
                                                                                            20 years on the
T Rivers
Two Ri                t d t t
                  At steady state      184 099 PGM
                                               PGMs                PGM
                                                        220 000 oz PGMs          2008
                                                                                              UG2 orebody

                                           4 418 t Ni         5 500 t Ni                    10 years without
                                           2 788 t Cu         2 500 t Cu                        large scale
Nkomati Interim     Ramp-up                                                      2008
                                      46 101 oz PGMs     21 000 oz PGMs
                                                                   PGM                          expansion
                                                                                                 released

                     Project                     n/a         20 500 t Ni
Nkomati Large         Released                                9 000 t Cu
                                                                                 2011             20
Scale Expansion         and                             110 000 oz PGMs
                    constructing

Nkomati Chrome      Production              584 177 t      1 000 000 tpa         2007              5

K l l t PGM
Kalplats
                   Exploration                    n/a                n/a          n/a             n/a
Project


                                                                                                               34
                                ARM Platinum Summary


•   Eastern Limb
•   Shallow, Long Life Assets
•   E t bli h d PGM P d
    Established     Producer
•   Positive Cash Flows
•   G o t ote t a
    Growth Potential




                                                   35
             36




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