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The platinum investment of choice
Investor Presentation
May 2003
IMPLATS
2
2003 – not without its challenges
o Dollar platinum market held up well – 20-year highs of over $700/oz in March 2003
o Rand one of the world’s strongest performing currencies
o Minerals Act, Mining Charter and Royalty Billo Gencor unbundling proceeding apace o Strike at Impala resolved without mass dismissal
3
Who we are
o Focussed PGM business – second largest producer in the worldo 3 Moz PGMs per annum; 1.6 Moz platinum per annum
o Primary listing JSE Securities Exchangeo Also, LSE and US (sponsored ADR)
o Significant reserves and resources in SA and Zimbabwe; active exploration programme underway
About Implats
4
Where we areAbout Implats
Operations:o South Africa
o Bushveld Complex –Western and Eastern limbs
o Zimbabweo The Great Dyke
Exploration:o North America, South Africa,
Australia, Brazil
5
Where we areAbout Implats
6
Where we areAbout Implats
7
What we have
Platinum ounceso Reserves: 23.8Mozo Resources: 75.4Mozo Attributable ounces (JVs and strategic investments):
50.4Mozo Total resources: 149.6Moz
As at 30 June 2002
About Implats
8
What we do
Impala Platinum
Marula Platinum
Barplats
100%
83%
80%*
*20% allocated to BEE partnership
Lonplats
Aquarius Platinum
Two Rivers
Zimplats (Makwiro)
ZCE Platinum(Mimosa)
27%
32%
45%**
55%
50%
** Up to 12% to be allocated to BEE partnership
Concentrate offtake
agreements
Implats100%
Impala Refining Services (IRS)
Mining operations
Strategic holdings & alliances
About Implats
9
Where our operating income comes from – half year to Dec 2002
Implats$363m
Strategic holdings & alliances*
Mining operations
% of income 75%
$269m
Impala Refining Services (IRS)
5%
$21m
20%
$73m
* Includes share of pre-taxation income from associates
10
How we have performed – earnings
0100200300400500600700800900
1000
FY97 FY98 FY99 FY00 FY01 FY02 FY03*
US cents/share
* Interim 6 months
11
How we have performed – share price
Source: Reuters
Implats has outperformed global mining index by 5.67% since July 01
507090
110130150170
Jun-01 Oct-01 Feb-02 Jun-02 Oct-02 Feb-03
HS BC global mining index Implats Anglo P latinum Lonmin
12
Our shareholdersAbout Implats
46%
22%
14%
10%5% 3%
Gencor
South Africa
USA
Eng & Wales
Other countries
Unknown/Belowthreshold
Implats only Implats post Gencor unbundling
57%
16%
18%
5% 4%
Source: Cazenove
13
Supply and demand (000 oz)
6,610
6,610
0
6,815
7,280
465
8,050
8,920
870
PalladiumTotal demand
Total supply
Net supply surplus
6,615
6,680
65
7,085
6,560
(525)
6,365
6,250
(115)
PlatinumTotal demand
Total supply
Net supply deficit
2003 (forecast)
20022001Calendar years
The market
14
Fundamentals remain sound
o Platinumo Good fundamental demand supports positive outlook
World-wide auto sales at satisfactory levels
European diesel sales growing
Ever stricter emission legislation worldwide
Strong Chinese jewellery demand although high metal prices and SARS could have an impact
o Palladiumo In medium term, plentiful supply and weaker price may
encourage swing back to palladium by automotive users
The market
15
Platinum, palladium prices in DollarsThe market
$/oz
0
200
400
600
800
1000
1200
Jul-96 Jul-97 Jul-98 Jul-99 Jul-00 Jul-01 Jul-02
Pt Pd
16
Platinum, palladium prices in RandsThe market
R/oz
0100020003000400050006000700080009000
Jul-96 Jul-97 Jul-98 Jul-99 Jul-00 Jul-01 Jul-02
Pt Pd
17
Impala Platinum
o $500 million mining capex programme aimed atmaintaining production at 1.1Moz platinum pa –to be spent over five years
o Refinery expansion to capacity of 1.65Moz platinum complete, scoping of possible expansion to 2.5Moz platinum
Operational performance
Fast facts:
13-shaft system employing 27,000 people
Annual production of 1Moz pa
+ 30-year life-of-mine
Fast facts:Fast facts:
1313--shaft system employing 27,000 peopleshaft system employing 27,000 people
Annual production of 1Moz paAnnual production of 1Moz pa
+ 30+ 30--year lifeyear life--ofof--minemine
18
Marula Platinum
o Decline development on tracko Concentrator start-up in FY2004 o Full production in FY2005
Operational performance
Fast facts:
New project under development
Annual production of 103,000 Pt oz annum – expandable to 200,000 Pt oz pa
Capex of $175,000
30-year life-of-mine
Fast facts:Fast facts:
New project under developmentNew project under development
Annual production of 103,000 Pt oz annum Annual production of 103,000 Pt oz annum –– expandable to 200,000 Pt oz pa expandable to 200,000 Pt oz pa
CapexCapex of $175,000of $175,000
3030--year lifeyear life--ofof--minemine
19
Marula PlatinumOperational
performance
20
Lonplats
o Strong cash generator
Fast facts:
27% stake in Lonplats
Annual production of 750,000oz platinum in FY02
Attributable earnings of $71m in FY02
Fast facts:Fast facts:
27% stake in 27% stake in LonplatsLonplats
Annual production of 750,000oz platinum in FY02Annual production of 750,000oz platinum in FY02
Attributable earnings of $71m in FY02Attributable earnings of $71m in FY02
Operational performance
21
Fast facts:
32% effective stake
Annual production of 122,000oz platinum in FY02
Fast facts:Fast facts:
32% effective stake32% effective stake
Annual production of 122,000oz platinum in FY02Annual production of 122,000oz platinum in FY02
Aquarius
o Kroondal at full productiono Marikana in ramp-upo Bankable feasibility underway at Everest South
Operational performance
22
Two Rivers
Fast facts:
45% stake
Potential production of 98,000 platinum oz pa
Fast facts:Fast facts:
45% stake45% stake
Potential production of 98,000 platinum oz paPotential production of 98,000 platinum oz pa
o Feasibility study underwayo BEE deal with Tiso Capital in Jan 2003
Operational performance
23
Fast facts:
55% effective stake
Production of 90,000 platinum oz pa
Fast facts:Fast facts:
55% effective stake55% effective stake
Production of 90,000 platinum oz paProduction of 90,000 platinum oz pa
Zimplats (Makwiro)
o Project ramping upo Life-of-mine offtake agreement with IRSo Potential expansion of 400,000 platinum oz pa
– investigation underway
Operational performance
24
ZCE (Mimosa)
Fast facts:
50% stake
Production of 65,000 platinum oz per annum
Fast facts:Fast facts:
50% stake50% stake
Production of 65,000 platinum oz per annumProduction of 65,000 platinum oz per annum
o Ramp-up on scheduleo Life-of-mine offtake agreement with IRS
Operational performance
25
Production growth remains on track
1000
1200
1400
1600
1800
2000
2200
FY02 FY03 FY04 F05 FY06
Mine to market 3rd Party Toll
Pt oz
CAGR = 9.7%
26
Minerals legislation
o Mineral Resources and Petroleum Development Actand Mining Empowerment Charter promulgated
o Scorecard requires:o Ownership (15%)
o Employment equity
o Training
o Social investment
o Affirmative procurement
Current issues
• RBN – 1.5% equity in Implats• Marula Platinum – 20% • Two Rivers – 26%
27
Proposed royalty legislation
o Royalty Bill an issue for all resource companieso Issues for Implats:
o Double royalty payment
o Revenue and not profit-based
o Beneficiation not encouraged
Threatens black economic empowerment and future project
o Submission has been made to National Treasury
Current issues
28
Implats post Gencor
o Unbundling process underwayo Previously Gencor constrained liquidity
o Anticipated ratio 8.78 Implats:100 Gencor shares
o First date to trade – 10 June 2003
o Dynamic and larger free floato MSCI Emerging Markets Indexo Increase opportunity in the US – Level 1
Sponsored ADR programme a first step
Current issues
29
Strong generator of cashOutlook
55%44%Return on equity
51%34%Return on assets
FY02FY03
Interims(in US$)
o High margins – average of 47% across the business for interim FY2003
o Good, consistent returns
30
Ongoing shareholder returns
o High dividend yield – 6.5% in FY2002 and half-year FY2003o Dividend policy remains unchanged – cover of 1.9 times
Outlook
0
100
200
300
400
500
600
FY97 FY98 FY99 FY00 FY01 FY02 FY03** Interim 6 months
US cents/share
Dividend per share calculated at annual average R/$
31
OutlookOutlook
o Strong production growth – 10% pao Market fundamentals for platinum positiveo Strong cash generation with high dividend yield
The platinum investment of choice
Investor Presentation
May 2003
IMPLATS
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