ARM Platinum

Two Rivers Platinum Mine

Description of assets

The mine is located near the town of Steelpoort, in Mpumalanga on the eastern limb of the Bushveld Complex. The operation comprises an underground mine consisting of the Main Decline, the North Decline and a concentrator plant. ARM’s economic interest in Two Rivers is 55%.

Management

The mine is managed by ARM.

Reserves and resources (100% basis)

	Measured and Indicated Resources PGM+Au			Proved and Probable Reserves PGM+Au
	Mt	(6E) g/t	Moz	Mt	(6E) g/t	Moz
UG2	54.09	4.71	8.19	37.29	3.98	4.8
Merensky	18.7	3.55	2.13	–	–	–

4E = Platinum + Palladium + Rhodium + Gold

Refining

All metal produced is smelted and refined by Implats subsidiary Impala Refining Services Limited (IRS).

Number of employees

2  852 (including 2 078 contractors)

Operational review – F2009

Two Rivers completed its first financial year at full production capacity. Tonnes milled increased by 11%. This, together with a head grade improvement, resulted in a 19% increase in PGM ounces in concentrate. At year-end the surface ore stockpile was 207 122 tonnes. As part of the plant optimisation, the secondary crusher and additional cleaning circuit were commissioned during August 2009. Cost-containment initiatives and the postponement of capital expansion projects were implemented as part of a cash-preservation strategy.

The Impala Platinum and ARM Boards have approved a transaction in terms of which Impala Platinum will exchange portions 4, 5 and 6 of Kalkfontein, as well as all Tweefontein prospecting rights, for an additional 4% shareholding in Two Rivers, thereby increasing its stake to 49%. The transaction will become effective pending Section 11 approval from the DMR.

100% basis		F2006	F2007	F2008	F2009	F09/08 % change
Concentrate production
Platinum	Ounces	–	87 934	98 621	118 023	20
Palladium	Ounces	–	50 479	56 411	67 390	19
Rhodium	Ounces	–	14 501	16 130	19 136	19
Gold	Ounces	–	1 190	1 301	1 627	25
Ruthenium	Ounces	–	24 342	27 683	35 577	18
Iridium	Ounces	–	5 651	6 345	7 541	19
PGMs	Ounces 6E	–	184 099	206 491	246 295	19
Nickel	Tonnes	–	250	298	365	23
Copper	Tonnes	–	118	143	190	33
Operational statistics
Tonnes milled	Mt	–	2.04	2.37	2.62	11
Head grade (6E)	g/t	–	4.24	4.00	4.10	3
Average number of own employees	Number	–	479	583	774	33
Average number of contractors	Number	–	1 445	1 612	2 078	29
Financial indicators
Cash cost	R/tonne	–	246	340	399	17
Cash cost	R/Pt pz	–	5 724	8 161	8 846	8
Cash cost	R/PGM oz 6E	–	2 734	3 898	4 239	9
Cash cost	R/kg 6E	–	87 906	125 319	136 288	9
Basket price (6E)	R/kg	–	268 928	362 935	246 680	(32)
Net sales revenue	R million	–	1 408	2 362	1 022	(57)
Cash operating cost	R million	–	425	805	1 044	30
Cash operating (loss)/profit	R million	–	945	1 485	(83)	(106)
Cash operating margin	%	–	69	63	(8)
Capital expenditure	R million	957	464	357	346	(3)

Refer to note 2 of the financial statements (PDF - 41KB) for Two Rivers segmental information.