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REGULATORY RELEASE

14 November 2016

2016 Final Results Announcement

Lonmin Plc, (“Lonmin” or “the Group”), one of the world’s largest primary Platinum producers, today publishes its Final Results for the year ended 30 September 2016. Highlights

The successful completion of the reorganisation has improved Lonmin’s profitability and resulted in the business being cash flow positive after capital expenditure despite the continuing low PGM pricing environment

Underlying operating profit increased to $7 million from a loss of $134 million in the prior year

Cash improved from $69 million at end of first quarter to $173 million at year end

Liquidity improved from $422 million at end of first quarter to $537 million at year end

Sales of 735,747 Platinum ounces, exceeded the sales guidance of 700,000 Platinum ounces, supported by our smelter clean-up and metal release from improved processing technology

Achieved cost reduction of R1.3 billion, 86% higher than the target of R700 million

Underlying costs decreased by 3.2% to R14.1 billion – unit costs increased by 4.0% to R10,748, despite 8.2% increase in labour costs

Concentrator recoveries of 86.6% continue to be industry leading

Generation 2 shafts production of 8.1 million tonnes, 4.0% up on the prior year on a comparable basis, and productivity up 5.0%, notwithstanding rationalisation of the workforce by 19.0%

The planned decline of our Generation 1 shafts is on track, reducing our high cost production in an oversupplied market

Saffy shaft production up 16.9% and has reached steady state

Average Rand full basket price (including base metals) up 7.5% on prior year, at R11,637 per PGM ounce

Peaceful and non-disruptive conclusion of multi-year wage agreement, reflects a maturing relationship with the unions and employees

Preserved Immediately Available Ore Reserves which stand at 22.4 months, providing us with operational flexibility Safety

Determined to continuously improve our overall safety performance

Saddened by the loss of four employees during the year despite our best efforts to achieve Zero Harm in all our operations

Lost Time Injury Frequency Rate (LTIFR) improved by 8.1% to 4.97 (2015: 5.41)

Lonmin Plc 4 Grosvenor Place London SW1X 7YL United Kingdom T: +44 (0)20 7201 6000 F: +44 (0)20 7201 6100

www.lonmin.com

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Guidance for financial year 2017

Platinum sales between 650,000 and 680,000 ounces

Unit costs remain under pressure; expected to be in the range of R10,800 to R11,300 per PGM ounce

Capital expenditure to be funded from cash generated from operating activities and third party funding. Our 2017 guidance is expected to be increased to approximately R1.8 billion, which includes R400 million related to the Bulk Tailings Treatment project

Lonmin Chief Executive Officer Ben Magara said: “During 2016 we strengthened our balance sheet and renewed our bank facilities, closed unprofitable shafts, reorganised the business without labour disruptions, reduced costs and enhanced profitability. We are now well placed to drive essential and sustained improvements in productivity. I am pleased that we ended the year with net cash of $173 million and increased total liquidity to $537 million. I am also pleased that we signed a multi-year wage agreement without labour or production disruption. We have now repositioned the business, not only to withstand the current low PGM price environment, but also to seize opportunities to maximise value for shareholders and all our stakeholders.” FINANCIAL HIGHLIGHTS

30 September 2016

30 September 2015

Revenue $1,118m $1,293m Underlying I, ii operating profit / (loss) $7m ($134)m Operating loss ii $(322)m $(2,018)m Underlying i loss before taxation $(3)m $(143)m Loss before taxation $(355)m $(2,262)m Underlying i loss per shareviii (35.6)c (194.5)c Loss per share viii (137.0)c (3,437.6)c

Trading cash inflow/(outflow) per share iii,viii 23.2c (24.8)c Unit cost of production per PGM ounce R10,748/oz R10,339/oz Capital expenditure $89m $136m Free cash outflow per share iv, viii (12.4)c (345.6)c

Net cash/(debt) as defined by the Group v $173m $(185)m

Interest cover (times) vi 1.0x 7.9x Gearing vii -% 9.9%

Footnotes: i Underlying results are based on reported results excluding the effect of special items as disclosed in note 3 to the

financial statements.

ii Operating (loss) / profit is defined as revenue less operating expenses, profit on disposal of joint venture, finance income and expenses and before share of (loss) / profit of equity accounted investment.

iii Trading cash flow is defined as cash flow from operating activities.

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iv Free cash flow is defined as trading cash flow less capital expenditure on property, plant and equipment and intangibles, proceeds from disposal of assets held for sale and dividends paid to non-controlling interests.

v Net cash/(debt) as defined by the Group comprises cash and cash equivalents, bank overdrafts repayable on demand and interest bearing loans and borrowings less unamortised bank fees, unless the unamortised bank fees relate to undrawn facilities in which case they are treated as other receivables.

vi Interest cover is calculated on the underlying operating (loss) / profit divided by the underlying net bank interest payable excluding exchange differences.

vii Gearing is calculated as the net debt attributable to the Group divided by the total of the net debt attributable to the Group and equity shareholders’ funds.

viii The number of shares held prior to 12 December 2015 has been adjusted by a factor of 0.08 to reflect the bonus element of the Rights Issue.

ENQUIRIES

Investors / Analysts: Tanya Chikanza (Head of Investor Relations) +27 11 218 8358 / +44 207 201 6007

Andrew Mari (Investor Relations Manager) +27 11 218 8420

Media:

Wendy Tlou +27 83 301 9663

Anthony Cardew / Emma Crawshaw, Cardew Group +44 207 930 0777

Notes to editors Lonmin, which is listed on both the London Stock Exchange and the Johannesburg Stock Exchange, is one of the world's largest primary producers of PGMs. These metals are essential for many industrial applications, especially catalytic converters for internal combustion engine emissions, as well as their widespread use in jewellery. Lonmin's operations are situated in the Bushveld Igneous Complex in South Africa, where more than 70% of known global PGM resources are found. The Company creates value for shareholders through mining, refining and marketing PGMs and has a vertically integrated operational structure - from mine to market. Underpinning the operations is the Shared Services function which provides high quality levels of support and infrastructure across the operations. For further information, please visit our website: http://www.lonmin.com CONTENTS This document contains the following sections:

Chief Executive Officer’s Review; Operational Review; Market Review; Mineral Resources & Mineral Reserves; Financial Review; Operating Statistics – 5 Year Review; Responsibility Statement of the Directors; and Financial Statements

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CHIEF EXECUTIVE OFFICER’S REVIEW Improving cash and liquidity were our priorities for 2016 and the results demonstrate good progress in these areas. After our Rights Issue which strengthened our balance sheet and the renewal of our bank facilities, we delivered on our promises to our shareholders:

maintaining a strict focus on cash, which ensured that for the three quarters following the successful reorganisation

of the business we were cash flow positive after capital expenditure and improved operating profit to $7 million, from

a loss of $134 million in 2015;

increasing our net cash position from $69 million with total liquidity of $422 million at the end of quarter one, to $173

million with total liquidity of $537 million at the year end;

reducing cost by R1.3 billion, 86% higher than our target as well as contained capital expenditure;

timely conclusion of a multi-year wage agreement; and

preserving immediately Available Ore Reserves, at 22.4 months, giving us operational flexibility.

Our structural and strategic changes stabilised the business, generated cash and have opened up opportunities to maximise further shareholder value. Our improving cash position and liquidity shows that we have repositioned the Company. Supported by our long-life, shallow ore resources, I am confident that we are capable of meeting the immediate challenges and are equipped to take advantage of any continued market improvement. Safety is essential for good performance and remains our priority. With regret I have to confirm that Zilindile Ndumela, Goodman Mangisa, Fanelekile Giyama and Siphilo Makhende were fatally injured during the year. Our condolences go to their families and loved ones. Overall Lost Time Injury Frequency Rate improved by 8.1%. We remain determined to better our overall safety performance and have further enhanced our focus on safety improvements. I absolutely believe Zero Harm is realistic and achievable. Reorganisation The reorganisation of the Group, in line with the Business Plan, was successfully completed in the first half of the year with a total of 5,433 employees and contractors leaving the business between 30 June 2015 and 31 March 2016. A further 1,428 employees were reskilled and redeployed into vacant, more productive roles. The reorganisation, whilst successful in being completed without business interruptions, did nonetheless have a disruptive impact on mining production, with total tonnes mined falling below our ambitious Business Plan target. As the disruption created by the rationalisation process settles down, we expect the mining teams to start to improve levels of production. Additionally, a number of initiatives have been actioned to support the achievement of planned output for 2017. Performance Despite the reorganisation, we achieved Platinum sales of 735,747 ounces, exceeding our guidance of 700,000 Platinum ounces, assisted by the impressive efforts of our Processing team, which released 73,186 Platinum ounces from the smelter clean-up project and metal release from our new Other Precious Metals (OPM) Plant. I would like to praise the Processing team’s entrepreneurial approach and high performance culture. We mined a total of 10.3 million tonnes, a decrease of 8.8% on the prior year, reflecting the planned decline in production from our older, higher cost Generation 1 shafts, which are being wound down as part of our strategy to reduce high cost production. 2016 saw the orderly closure of our 1B shaft and the cessation of own production from Newman shaft. Tonnes mined from our core Generation 2 shafts were up 4.0% on a comparable basis. Saffy shaft, which is now operating at full production, performed notably well, offsetting the weaker performance of K3 and Rowland shafts, which were affected

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by the redeployment and reskilling of employees; absenteeism of key personnel; and higher incidents of safety stoppages in the first nine months of the year. Productivity at our Generation 2 shafts increased 5.4% to a five year high of 5.9 square meters per person. The efforts to improve the performance and reliability of the processing plants over recent years, based on ongoing optimisation and improvement plans across the processing operations, continue to pay off and the concentrators have achieved levels of PGM recoveries amongst the highest in their history, with the instantaneous recovery rate having increased to 89.6% for the current year, from 87.2% in the 2015 financial year, benefiting from the once-off smelter clean-up project. We continue to pursue various initiatives to utilise our excess processing capacity; the Bulk Tailings Treatment (BTT) project being an example of this. Cash and Liquidity, Profitability, Cost Savings and Capital expenditure The reorganisation resulted in the business delivering underlying operating profit of $7 million compared to underlying operating loss of $134 million in 2015 and meant the business was cash positive after capital expenditure for the last three quarters of the year. Our net cash position increased to $173 million (R2.4 billion) with total liquidity of $537 million (R7.5 billion) at the year end. We benefited from a cash flow injection of circa R350 million (around $24 million) realised from permanently reducing our metal in process stock following the commissioning of the OPM Plant. Underlying costs decreased by 3.2% to R14.1 billion. We delivered cost reductions of R1.3 billion (in financial year 2015 money terms) over the course of the year, which is 86% ahead of our Business Plan target of R700 million, achieved through the reduction in the size of the Group’s workforce, overhead costs and support service structures, controlling of variable cost in line with lower mining / concentrating production and total cost of ownership projects. We contained unit costs to R10,748, a 4.0% increase year on year, in spite of the 8.2% increase in labour wages and the disruption from the reorganisation, which was marginally ahead of the revised guidance in our Q3 production report. The increase reflects the production challenges experienced in our mining operations, where the majority of our costs are incurred, highlighting a need to build on our productivity improvements. Capital expenditure was contained to $89 million, less than our revised guidance of $105 million due to delay of the BTT project. During 2016, $50 million competitive third party funding was secured for our BTT project with the first tranche of $9 million received in the fourth quarter. During the year an impairment charge of $335 million was incurred, reflecting the weakened Rhodium price long term outlook and strengthened Rand to US Dollar exchange rate in the second half. Wage Settlement On 31 October, we announced our agreement with The Association of Mineworkers and Construction Union (AMCU) on wages and conditions of service. The agreement, effective from 1 July 2016 to 30 June 2019, provides employees with a realistic and competitive outcome and was negotiated without any business interruptions, demonstrating the reducing risk in this area. The impact of this is an average annual increase of 7.6%. Pandora On 11 November, we entered into a sale and purchase agreement to acquire Anglo American Platinum’s (AAP) 42.5% stake in Pandora, bringing our total ownership in the asset to 92.5%. The acquisition, for a minimum of R400 million (nominal terms) and a maximum of R1 billion, over six years, increases our exposure to an asset with good long-term development potential. The Pandora Joint Venture made an operating loss of R109 million in 2016, with Lonmin’s 50% share being reflected in these accounts. However, Lonmin received a contribution of R117 million from ore purchase agreements, which offsets the joint

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venture loss. Adjacent to our Saffy shaft, Lonmin expects to be able to access additional ounces without having to incur further capital expenditure, allowing us to defer capital to deepen the Saffy shaft. Additionally, Lonmin will realise an annual rental fee of approximately R46 million, for a three year period, from AAP for the use of the Baobab concentrator in Limpopo. The transaction is expected to become unconditional during 2017 following the fulfilment of all conditions precedent. The Market During the year, the PGM pricing environment remained weak although the platinum market deficit has widened. In the short-term we expect markets to remain subdued, however we still believe the long-term market fundamentals are strong. PGMs have a vital role to play as we move towards a greener global economy. Platinum and palladium’s role in reducing harmful emissions remains key and is of growing relevance for developing markets, which are increasingly adopting more stringent emissions standards. Growth in jewellery demand from India and the United States has recently offset the slowdown in China and we believe the drivers of platinum investment and demand are robust. When market sentiment improves, I am confident that we will see an improvement in platinum prices primarily because of the extended under-investment in the primary supply. Our Strategy Our strategy in the short to medium term is to continue to preserve cash with the objective of achieving positive cash flow after capital expenditure. Much has been achieved and the Company is now well positioned to maximise value for shareholders. In the long-term, our strategy is to generate value from our mine-to-market business by utilising our value chain, especially our processing infrastructure and capabilities. Our strategy focuses on the following four pillars, which take into account our responsibilities around social and community investment: 1) Operational Excellence Profitability and returns are crucial. The Group is highly geared to the PGM pricing environment and the Rand/US Dollar exchange rate. We operate for value, not for volume. Given the present PGM market, we believe that the priority in the short-term is to make sustainable improvements in productivity and bolster cash and liquidity. To improve cash margins, we strive to ensure that our core, larger, long-life Generation 2 shafts reach the most efficient and profitable positions in terms of safety, costs, production and productivity as the older Generation 1 shafts reach the end of their lives. Safety remains at the heart of all that we do. Our ambition to achieve Zero Harm starts with the safety, health and wellbeing of our employees and extends to everything we do including minimising the environmental impact of our operations. Our approach to safety is defined in the Lonmin Safety and Sustainable Development Policy, Sustainable Development Standards and the Fatal Risk Control Protocols and the Lonmin Mining Life Rules, a set of non-negotiable rules that target the risk areas responsible for the majority of fatal or serious accidents. In line with our strategy to remove high cost production ounces, the closure of inefficient areas and shafts will continue through 2017. We remain vigilant in containing our costs. Overheads and support services structures are expected to align with the planned reduced sales profile. Additionally, capital expenditure will be maintained at the level required to be cash neutral as a minimum and should be sufficient to keep the Group’s existing assets in operation and to comply with legislative, safety, health and environmental and social responsibility requirements without compromising our bank covenants. The Group continues utilising capital portfolio optimisation tools with the aim of ensuring that capital expenditure is invested only in the

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most cash generative development projects available to the Group with the aim of predominantly funding capital expenditure through free cash flow generated by operating activities. The Group’s planned capital expenditure includes the expansion capital expenditure for the BTT project. In total, approximately R400 million is included for this project in the total planned capital expenditure for the financial year 2017. We intend to maintain a clear strategic focus on the Group’s mineral resources, mining and processing infrastructure at Marikana. Prior investment in this area means as at 30 September 2016 the Group had Immediately Available Ore Reserves equating to 22.4 months of mining at planned levels of production. Attributable Mineral Resources were 180.6 million ounces of 3PGE+Au in 2016, a decrease of 2.3 million ounces from 2015, and Attributable Mineral Reserves were 31.7 million ounces of 3PGE+Au in 2016, a decrease of 4.6 million ounces from Marikana and 0.1 million ounces from Pandora with 2015. The Marikana tailings were unchanged. This provides Lonmin with a competitive advantage, giving operational and strategic flexibility. As part of our efforts to make use of the excess capacity within our Processing Division, and in line with our focus on low cost ounces and near term cash, work is underway on the BTT project. Additionally, during the course of the year, we signed a toll treating contract with Jubilee Platinum Plc, which will commence during financial year 2017, producing 12,000 Platinum ounces in 2017 and 17,000 Platinum ounces per annum thereafter. The BTT project involves the re-mining of Lonmin’s Eastern Tailings Dam and the reprocessing of 26 million tonnes of tailings material at a rate of 300,000 tonnes per month. Once at steady-state, the project is expected to deliver the lowest cost ounces in the Lonmin portfolio, producing about 29,000 ounces of Platinum per year or some 55,000 ounces of PGM (6E) (from tailings with a grade of 1.42 grammes per tonne with a recovery rate of 35%). The project is expected to be mined by a contractor over a seven-year period and to be commissioned and ramped up to full production by the end of 2018. The chrome is expected to be recovered in a new chrome spiral plant and the contained PGMs are expected to be recovered in the Group’s UG2 concentrator. Further to this project, there are a number of additional tailings dams available for life extension in the Western Dam, for potential exploitation in the future. In the longer term, the Directors believe the Group has a number of attractive brownfield opportunities that could potentially be developed when the PGM pricing environment improves, including the K4 shaft, the Rowland MK2 resources, opening up of further levels of Saffy shaft, the Pandora E3 deepening project and E4 Pandora project. The Limpopo operations, currently on care and maintenance, also offer a unique opportunity to develop what the Directors believe to be a sizeable mechanised operation in a sustained higher price environment. In addition, the Akanani project offers the prospect of a large, long-life, low-cost and highly mechanised mine which gives us optionality in the long term. We sold our stake in a non-core gold exploration joint venture in Kenya for $5 million during the year, but through our joint ventures with Vale S.A. and Wallbridge Mining Company Limited, we retain our international exploration projects in Canada. Limited work also continues on the exploration licences that we hold in Northern Ireland. While our International Projects offer an opportunity of competitive advantage and are shallow or highly mechanisable, in line with the Business Plan, allocation of funds to such projects is restricted and consequently activity will remain minimal on these projects through financial year 2017. 2) Enhanced Balance Sheet Strength We achieved our stated aim of being cash flow positive after capital expenditure whilst maintaining optionality to grow production over time if and when pricing ultimately improves. Our balance sheet will be managed prudently and conservatively.

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3) Our People and Relationships Our mining model is labour-intensive. Our people make the difference and are the vehicle by which our strategy is effected through the day to day operations. The Company values the contribution made by all its employees and recognises that morale and retention remain under pressure as a result of the reorganisation and continuing cost constraints, which have limited salary increases and development opportunities. Progress against our human resources targets is measured through monthly reporting of key internal indicators as well as integrating certain targets as part of the Lonmin corporate objectives. Lonmin’s human resources strategy, policies and procedures align with our operating country’s labour laws and other relevant frameworks, guidelines and codes of practice. These include in South Africa, the social development requirements of the Minerals and Petroleum Resource Development Act that are defined in the Company’s Social and Labour Plan, the human rights provision in the International Council on Mining and Metals principles of sustainable development and the United Nations Global Compact. The Company also reports to the Department of Minerals and Resources (DMR) against the broad-based economic development requirements of the Mining Charter, which include housing and living conditions, employment equity and human resource development. We continue on our journey to improve our employee’s wellbeing and financial literacy and have been encouraged by the results of the initiatives we put in place to achieve this. Our employees deserve decent living standards and must have a choice of how and where they want to live. Achieving our vision for sustainable, integrated settlements requires careful planning, consultation and coordination between all stakeholders, including the employees themselves, communities, potential funders, developers, unions, local municipalities and all levels of Government. To this end, Lonmin and its organised labour are reviewing employee living standards as part of the human settlements strategy, which should realise a tactical plan that addresses employees’ wishes, needs, security and affordability to ensure a fit-for-purpose and decent standard of living. As announced in October 2013, Lonmin remains committed to spending R500 million over the five-year period to 2018 towards employee accommodation and community bulk services. Continuing to Improve Relationships with key Stakeholders Our efforts to solidify and improve relations with our employees and their representative trade unions continue. We accept that building trust and strong relationships is a never ending journey. Management and unions continue to engage on a regular basis at different levels to ensure timely communication and resolution of issues at appropriate levels. We also have regular engagement with our majority union, AMCU, in line with our Relationship Charter. Transformation Lonmin embraces transformation as a business imperative. We are committed to playing our part in addressing historic inequalities and creating the conditions in which current and future generations can succeed in creating a shared purpose. The Mining Charter requires a focus on increasing the number of Historically Disadvantaged South Africans (HDSAs) in management and the number of women in mining. Transformation is monitored and overseen at Board level by the Social, Ethics and Transformation Committee. Transformation considerations are incorporated into recruitment, succession, skills development and talent management functions to develop an internal pipeline of HDSAs, including women. Lonmin’s bursary and graduate development programmes prioritise

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HDSAs in order to build the future supply of appropriate candidates. Targets relating to transformation are included in the corporate balanced scorecard that is used to measure performance for the incentive scheme. 4) Our Corporate Citizenship Agenda Stakeholder engagement and corporate communication Our business begins and ends with relationships and the quality of those relationships are central to our success and that of our stakeholders. Genuine stakeholder engagement and relationship building has allowed us to understand stakeholder expectations and to communicate on key issues transparently, consistently and in a timely manner. Social licence to operate Maintaining our social licence to operate through securing the trust and acceptance of communities and stakeholders is material as they host our operations. This is achieved through:

stakeholder engagement to ensure realistic expectations are understood and managed;

community investment initiatives to address social issues;

transformation initiatives to meet the Government’s social and economic development goals;

ethical business practices that include a commitment to upholding human rights; and

corporate and community partnerships. This is very much work in process and is based on an acknowledgement that trust must be restored and communities healed. The Board and Management The year saw two Board changes. First the appointment of Kennedy Bungane as a Non-Executive director. Kennedy is CEO of Phembani Group Proprietary Limited, which merged with Lonmin’s Black Economic Empowerment partner Shanduka Group Pty Limited. Kennedy has a wealth of corporate experience and his appointment is in line with our original contractual arrangements with Shanduka. In May, Simon Scott stepped down as Chief Financial Officer and as a Director of the Company. We wish Simon every success in the future and thank him for his contribution to the business over what was a very challenging period. We were delighted to be able to welcome Barrie van der Merwe as Simon’s replacement and as a member of the Board. Barrie has brought with him extensive knowledge and experience of the mining industry and the South African business environment and has already made a significant contribution to the business. Conclusion Today, the business is well positioned with disruption from the reorganisation process reducing. The Mining Division has now stabilized following the reorganisation and is in a strong position to move forward. We are focused on our core Generation 2 shafts. We are well placed to drive essential and sustained improvements in productivity and a number of initiatives have been implemented to address mining’s performance. Getting profitable ounces out of the ground is an essential priority. We have come a long way during 2016. I am particularly pleased with our return to profitability and the increase in our cash position and liquidity. We are now well positioned to explore options to maximise value for our shareholders and all our stakeholders; the acquisition of Pandora being a good example of this.

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Guidance We expect Platinum sales for 2017 to be between 650,000 and 680,000 ounces, which takes into account the positive impact

of various initiatives such as the smelter clean-up. We remain vigilant in our cost control, and expect our overheads and

support services structures to align with our sales profile. Unit costs will remain under pressure until we see a sustained

improvement in production throughput from mining and are expected to be in the range of R10,800 to R11,300 per PGM

ounce. Like costs, our capital expenditure is predominantly incurred in Rands. Going forward therefore, our capital

expenditure guidance will be provided in Rands rather than US Dollars. Our 2017 guidance is approximately R1.8 billion; the

increase on previous guidance reflects the delay to the BTT project which is third party funded and accounts for R400 million.

Capital expenditure will be maintained at the minimum level required for the safe and efficient running of the Group’s

operating, as we continue to focus on our aim of being cash positive after capital expenditure.

Yours faithfully Ben Magara Chief Executive Officer 13 November 2016

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OPERATIONAL REVIEW Safety Our goal is for every person in the business to have a personal understanding of, and respect for, the importance of safety in the workplace through entrenching safety principles in the organisation and increasing visibility on safety matters. Our safety strategy is centred around three key objectives:

fatality prevention;

injury prevention; and

a safe high performance operational culture. Our current safety performance is not currently acceptable and our focus on safety improvements remains a key priority for the Group. We do believe Zero Harm is achievable and we strive to realise this. We believe continuing to integrate our operational and sustainability strategies will help deliver this. Significant achievements:

K3 shaft achieved 6 million fatality free shifts on 22 July 2016, with the last fatality on 26 April 2013;

4B/1B shaft won the JT Ryan Safety Award for the fourth consecutive year; in recognition of its fatal-free safety performance;

4B/1B shaft achieved 10 million fatality free shifts, with the last fatality at 1B shaft on 20 March 2004;

Saffy shaft achieved 3 million fatality free shifts on 13 April 2016;

EPC concentrator achieved 4 years LTI Free on 6 July 2016;

retained OHSAS 18001 at all processing plants; and

the LTIFR improved to 4.97 per million man hours worked from 5.41 in the prior year. Performance Despite most safety indicators showing improvements, regrettably four of our colleagues were fatally injured. Two of the incidents involved falls of ground and two were ore pass incidents. We deeply regret the loss of our colleagues and extend our deepest condolences to their families and friends. Each incident was thoroughly investigated and reported to the DMR. Lessons learned from each incident were implemented into action plans and shared across operations. Our continuing efforts to prioritise improving safety performance in a collaborative way is demonstrated by the Tripartite Safety Day we held on 14 July 2016 at Rowland and E3 shafts, incorporating our key stakeholders including the DMR and AMCU. Alongside myself, the focus on safety was also reiterated to employees by Mr Joseph Mathunjwa, the President of AMCU, and Mr Monageng Mothiba, Principal Inspector of Mines for the Rustenburg region. We had 50 Section 54 stoppages imposed at operations in financial 2016, compared to 36 stoppages in financial year 2015, which resulted in 164 production days lost compared to 173 days lost in 2015. Section 54 stoppages were enforced more broadly and were taking longer to lift in the first nine months of the year. Not only do safety stoppages affect production, they also have a negative impact on safety routines and care must be taken to safely shut down work areas so that on their return, workers do not enter a work area that is hazardous. We continued to engage proactively with the DMR throughout and as shaft management develop a better understanding and working relationship with the inspectorate and with the Union, we are experiencing a reduction in the duration and frequency of Section 54 stoppages and more localised application of the stoppages. We are encouraged that this collaboration with the DMR has started to show results, as we have experienced decreasing Section 54 stoppages in the fourth quarter of the year. The rest of our shaft and operational managers are now actively focusing on improving their interaction with the inspectorate and the unions, to align objectives and manage expectations on safety stoppages.

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We have intensified our focus on a number of safety initiatives through visible felt leadership and direct employee engagement. This includes continued focus on Fatal Risk Control Protocols relating to fall-of-ground and scraping and rigging, the current Mining Industry Occupational Safety and Health programme initiatives, the roll out of the proximity detection systems, compliance audits on contractors and contractor management. Lonmin also began the roll out of the Du Pont leadership programme, called the Lonmin Safety Leadership DNA programme. This programme develops individuals’ safety competencies, knowledge in the safety theory, how to apply it and practice safety management. Structured workplace coaching is also part of this programme which is conducted one-to-one to bridge individual competency gaps and to improve safety performance over time. Training has been delivered to executive and senior management, union health and safety structures and sixteen ‘train the trainers’ candidates. There are a number of industry organisations that focus on addressing safety and health concerns in the mining industry that Lonmin participates in. These include amongst others the Chief Executive Officer Zero Harm Task Team through the Chamber of Mines, the International Council on Mining and Metals and the Association of Mine Managers South Africa. These forums expose the Company to shared learnings, best practice and peer performance benchmarks. Mining Division Overview Tonnes mined at 10.3 million were 8.8% lower than the 11.3 million from the prior year, mostly as a result of the decline in production from the Generation 1 shafts of 1.1 million tonnes, in line with our strategy to reduce high cost production in a low price environment. This was achieved in spite of the rationalisation of the workforce by 19% or 6,861 people as at 30 June 2016, comprising a reduction of 5,433 employees and contractors and the efficient reskilling and redeployment into vacant, more productive roles of 1,428 employees. The vacancies were predominantly as a result of a deliberate freeze on recruitment and losses due to natural attrition. A total of some 592,000 tonnes of production was lost in the year mainly due to Section 54 safety stoppages and management induced safety stoppages (MISS), equivalent to 39,000 Platinum ounces lost, compared to 872,000 tonnes lost in the prior year. Whilst we had a high number of Section 54 safety stoppages in the first nine months of the year, we are experiencing a reduction in the duration and frequency of Section 54 stoppages as a result of our continued interaction with the DMR and the unions. Accordingly, we have experienced an improving trend in production losses, and in the fourth quarter of the year, only 95,000 tonnes were lost due to Section 54 safety stoppages and MISS, compared to 297,000 tonnes in the last quarter of the prior year.

Marikana Ore Reserves The ore reserve position of the Marikana mining operations at 3.8 million square metres represents an average of 22.4 months production. Since we are commencing an orderly shut down and placement on care and maintenance of Hossy shaft, this shaft is now reported as a Generation 1 shaft and prior periods have been restated accordingly. The overall decrease of 5% at the Generation 2 shafts is largely driven by a 12% reduction at Rowland and 4B shafts. The drop in Rowland available ore reserve is due to current levels reaching the extremities of Rowland’s lease area, but the lateral extensions into MK2 and K3 ground scheduled for 2017/2018 are expected to open new ore reserves. The drop in 4B available ore reserves is due to a depleting shaft block. The decrease in the ore reserve position at the Generation 1 shafts can be largely attributed to Hossy and Newman shafts depletion and the curtailment of development.

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Immediately Available Ore Reserves (m2 '000)

2015 2016 Variance K3 1,054 1,030 (2)%

Rowland 576 504 (12)%

Saffy 733 765 4%

4B 635 556 (12)%

Generation 2 2,998 2,855 (5)%

Generation 1 908 751 (17)%

K4 188 188 0%

Total 4,094 3,794 (7)%

Business Improvement Initiatives The Business Support Office continually facilitates and monitors the implementation of business improvement initiatives by line management, aimed at increasing productivity and improving performance. Pursuant to the successful rationalisation of the workforce by 19%, we experienced an increase in productivity at our Generation 2 shafts from 5.6 square meters per man in 2015 to 5.9 square meters per man in 2016. As the disruption created by the rationalisation process settles down, we expect the mining teams to return to the long run target levels of production. Whilst we are pleased with the implementation of our Business Plan and with our strategy to reduce high cost production in a low price environment, we have yet to fully harness the productivity gains, and mining has not been able to deliver the planned tonnes for Generation 2 shafts during the 2016 financial year. We remain focused on improving productivity and recognise that multiple challenges remain and a step change is needed to realise further improvement. In parallel with the ongoing implementation of the initiatives set out below, additional stoping crews will be deployed in order to further support the achievement of planned output, as our healthy ore reserve position allows for this. The current initiatives being implemented to improve productivity are:

• establishing a labour skills buffer; • addressing employee absenteeism; • introducing a programme aimed at the empowerment of frontline supervisors; and • implementing the Theory of Constraints framework in order to improve the optimisation of half levels at

Generation 2 shafts. Further progress has been made in the current year on the initiative to improve the performance of the bottom 20% of stoping crews, and the performance of these bottom 20% crews at Generation 2 shafts has increased to an average of 216 square meters per crew in the current year from 200 square meters per crew in the prior year. The impact is to increase the overall average output for stoping crews on these Generation 2 shafts to 316 square meters per crew in the current year from 296 square meters per crew in the prior year. Marikana Mines Generation 2 shafts Our Generation 2 shafts represent around 78% of total tonnage production. Generation 2 shafts production of 8.1 million tonnes, was 4% up on prior year comparable production (after adjusting for closure of 1B shaft in October 2015).

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Generation 2 Shafts 2015 Tonnes ('000)

2016 Tonnes ('000)

2016 vs 2015 %

K3 Shaft 2,713 2,687 (1.0) Rowland Shaft 1,872 1,731 (7.5) Saffy Shaft 1,758 2,055 16.9 4B Shaft* 1,409 1,588 12.7

Total Generation 2 Shafts

7,752 8,061 4.0

*Following the closure of 1B Shaft in October 2015, the production of 4B/1B has been restated to exclude the 219,000 tonnes produced in 2015 for 1B Productivity measured as square meters per mining employee at our Generation 2 shafts improved again, and for the year increased by 5% to 5.9 compared to 5.6 from the prior year. K3 shaft K3, our largest shaft produced 2.7 million tonnes, a slight decrease of 1% on the prior year, partly due to the redeployment and reskilling of employees, which took longer than anticipated and the impact of geological challenges in the split reef area. Rowland shaft Rowland shaft produced 1.7 million tonnes which was a decrease of 7.5 % on the prior year, largely driven by Section 54 safety stoppages following the fatalities in October 2015 and May 2016. Saffy shaft Saffy shaft produced 2.1 million tonnes, an increase of 16.9 % on the prior year, demonstrating the successful ramp up to full production. This shaft has performed well and is now operating at full production and achieved a record 200,079 tonnes in November 2015. 4B shaft 4B shaft alone produced 1.6 million tonnes, which was 12.7% higher than the prior year production of 1.4 million tonnes. 1B shaft was closed in October 2015 and produced only 5,940 ounces in financial year 2016 and remains on care and maintenance. Generation 1 shafts Our Generation 1 shafts are reaching their end of lives and, as expected, production has declined. Hossy shaft Hossy shaft produced 0.7 million tonnes, a decrease of 25.2% compared to the prior year, due to depletion of the available ore reserves as all development has been stopped. Hossy shaft will be put on care and maintenance by the end of financial year 2017. Newman shaft Newman shaft produced 0.3 million tonnes, which was a decrease of 54.7% on the prior year as planned and has now ceased own production from Lonmin crews. Newman is currently being mined by contractors and future extraction of the remaining ore reserves using contract mining will be assessed annually. Pandora E3 Joint Venture Pandora production (100%) at 0.5 million tonnes was 13.4% lower than the prior period, driven by Section 54 safety stoppages following the fatalities in May and July 2016.

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W1, East 1 and East 2 shafts W1, East 1, East 2 are shafts at the end of their lives and together produced 0.6 million tonnes compared with 0.7 million tonnes in the prior year. Since these shafts continue to produce profitable ounces, contractors have continued to run W1, East 1 and East 2 (we run the engineering for East 2), and are responsible for all the costs associated with such shafts, but retain the flexibility to cease production if required. These shafts are expected to remain operational under the current contractor model for financial year 2017. The viability of these shafts is reassessed annually. Process Operations The efforts to improve the performance and reliability of the processing plants over recent years, based on ongoing optimisation and improvement plans across the processing operations, continue to pay off and the concentrators have achieved levels of PGM recoveries amongst the highest in their history, with the instantaneous recovery rate having increased to 89.6% for the current year, from 87.2% in the 2015 financial year, benefiting from the once-off smelter clean-up project. Concentrating Concentrating continued to deliver excellent underground and overall recoveries for the year at 86.7% and 86.6% respectively, despite the plant instability caused by the stoppages experienced due to periods of insufficient ore supply from our mining operations and lower opening stock than in 2015. Total tonnes milled for the year at 10.4 million tonnes were marginally higher than tonnes mined of 10.3 million tonnes, but 12.1 % lower than prior year of 11.8 million tonnes. We achieved higher grade and good recoveries, but platinum-in-concentrate production before concentrate purchases for the year of 663,575 saleable Platinum ounces was 9.6% down on prior year, due to lower tonnes mined and milled. Underground milled head grade at 4.60 grammes per tonnes (5PGE+Au) increased by 2.1% compared to the 4.51 grammes per tonne achieved in 2015. The overall milled head grade was 4.59 grammes per tonne, up 2.7% on the prior year. The ore mix milled, with reduced opencast Merensky, and improvements in the shaft head grades, were the main factors resulting in the higher head grade. Smelting and Refining The Smelters, the Base Metal Refinery and Precious Metal Refinery have been the subject of significant and ongoing management attention over the years, which has embedded a strong culture of “excellence in processing”, and continue to deliver strong performance following the initiatives undertaken. Refined production of 741,890 Platinum ounces was achieved, notwithstanding mined ounces of 659,754, a decrease of 2.3% on the refined production from prior year. Total PGMs produced were 1,440,724 ounces, a decrease of 0.5% on prior year. The innovative smelter clean-up project was implemented during the current year and released 73,186 ounces of Platinum during the year. The smelter clean-up project was one of the initiatives aimed at improving performance, having identified the opportunity to increase low cost refined Platinum production to make up for the shortfall in mined ounces. The production process for the smelter clean-up project involves the reprocessing of stock piles of used refractories and some revert tails generated during the slag plant construction, which contain low grade PGMs. The clean-up project is expected to continue into the first half of the 2017 financial year. The ongoing innovation in the processing division was the foundation for the OPM plant at the PMR, which uses the latest third generation technology and improves Rhodium and Iridium recoveries. The OPM contributed to additional release of 25,280 ounces of Rhodium and 13,068 ounces of Iridium.

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Capital Expenditure Capital expenditure for 2016 of $89 million was below our revised guidance of $105 million, due to both the weakness of the Rand and the delay to the BTT project. These projects are expected to be completed in 2017 and commissioned in 2018. In line with our strategy of limiting capital expenditure to levels required to satisfy regulatory and safety standards, essential sustaining capital expenditure in the continuing shafts and ensuring that Immediately Available Ore Reserve positions are maintained at an acceptable level to sustain production at our Generation 2 shafts, 73% of the mining capital ($37 million) was spent on ore reserve development and critical stay in business (SIB) projects on the Generation 2 shafts. At the concentrators the capital spent was prioritised on regulatory compliance requirements, critical SIB projects and continuation of the BTT Project. At smelting and refining the capital was spent on regulatory compliance capital and SIB projects.

2014 2015 2016

Actual Actual Actual $m $m $m

K3 19 19 18 Saffy 10 8 0 Rowland 9 18 5 Rowland MK2 0 0 15 Generation 2 shafts 38 45 38 K4 8 19 0 Hossy 7 7 0 Generation 3 & 1 shafts 15 26 1

Central & Other Mining 10 12 13

Total Mining 64 83 52

Concentrators 12 17 19 Smelting & Refining

9 27 11

Total Process 21 44 30

Infill Apartments 5 7 4

Other 2 2 3

Total 93 136 89

People Reorganisation Our pro-active response to the deteriorating PGM market conditions has repositioned our business. As a result, the reorganisation initiated in 2015 and concluded in March 2016, contributed to a headcount reduction of 5,433 people, and 1,428 employees were reskilled and redeployed into vacant, more productive roles. Forced retrenchments were limited to 62 people. The reduction was achieved through active engagements and consultation with the trade unions. That the process was completed without strike action or any significant operational disruptions is a tribute to the emerging maturity of the relationship built between the Company, employees, and our majority union, AMCU. Support offered to the employees during the restructuring included a dedicated help desk, a SMS helpline, easy access to payroll services and financial advice from the external financial advisor, as well as pension and provident fund service providers. The counselling service offered emotional support and any study assistance or debts to the Company accrued during the 2014 strike were written off for those exiting the company. The voluntary and forced separation packages included

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severance pay and access to a portable skills training programme. Lonmin has a policy in place to assist so as to act in a manner that is both substantially and procedurally fair in the event that retrenchments are required. Wage Settlement The Company announced on 31 October 2016, the settlement of the negotiations with AMCU about wages and conditions of service. The three-year agreement, which is effective from 1 July 2016 to 30 June 2019, provides employees with a realistic and competitive settlement and ensures the continued sustainability of Lonmin. The key points of the agreement are:

increases for category 4 to 9: R1,000 per year or 7% (whichever is greater) on basic salary;

increases for Officials (B and C band): 7% on Total Cost to Company for each year of the agreement;

Living Out Allowance increases by R100 in each year of the agreement;

allowances calculated off pensionable basic;

Rock Drill Operator allowance increases by 6% in each year;

Holiday Leave Allowance calculated off Normal Basic from year 2 (1 July 2017); and

medical contributions for category 4-9 employees will increase in January of each year. The medical aid contributions increase will be based on the medical aid inflation as determined by the Board of Trustees of the medical aid. The increase is estimated to be 13.5%.

At the end of this wage agreement, a Rock Drill Operator at Lonmin will earn R12,296 (basic salary) and a guaranteed package of R19,455. The impact of the wage agreement for this bargaining unit is an increase of 7.8% in financial year one, 8.0% in financial year two and 7.1% in financial year three or an average of 7.6% over the three-year period. Workforce Profile As at 30 September 2016, our total workforce was 32,793, compared to 35,669 in September 2015, of which 25,296 were permanent employees and 7,497 were contractors. The decrease in headcount is attributable to the reorganisation programme initiated last year, natural attrition and a greater proportion of contractors departing. Employment Equity Lonmin is committed to the principle of transformation and our contribution to South Africa’s transformation agenda has a direct impact both on our reputation and on our social licence to operate. Transformation is promoted throughout the business and is a commitment in terms of the Mining Charter, specifically through the ownership and procurement clauses that seek to accelerate the participation of HDSAs in the mainstream economy. The regulatory employment equity score is informed by legal parameters which include white women. Scoring 52.3% (2015 – 50.3%) we once again surpassed the required target of 40% at management level. Our focus is to create a pipeline of strong internal candidates, particularly HDSAs and women, to take Lonmin into the future. This is done, inter alia through our bursary and graduate development programmes and prioritised recruitment.

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Community Relations and Our Corporate Citizenship Agenda

Community Value Proposition (CVP)

The CVP project, now in its third year, has enabled the Company to deliver focused social investment that is impactful and sustainable. Our investment includes community education and skills development, community healthcare, infrastructure development and enterprise development. Our Corporate Citizenship Agenda

We engage in a range of activities aimed at uplifting our communities. These include education, health and social infrastructure projects. Social and Labour Plan (SLP)

Our commitment to corporate citizenship defines our duty to contribute to the wellbeing and development of the communities that host, and are affected by, our operations. This duty is formalised in the SLP obligations under the terms of our mining rights. Our broader social licence to operate depends on strong relationships with our host communities. The Company’s ability to build financial capital in the long-term is critically dependent on a predictable and stable operating environment, which is only possible if we have good relationships with our immediate communities and labour-sending areas.

Investing in the long-term social, economic and infrastructural development of our host communities translates into an investment in our current and future employee base, and ultimately is a direct investment in the sustainability of the mines themselves. Black Economic Empowerment (BEE) Our BEE equity ownership is at least 26% and we strive to maintain this in line with the requirements of the Mining Charter. Bapo Ba Mogale Four contracts were awarded to the Bapo Ba Mogale (Bapo) under the terms of the 2014 Transaction and have now been implemented. The award of these contracts has resulted in Lonmin far exceeding the procurement undertakings given to the Bapo. Our relationship with the Bapo continues to evolve as we support them to build capacity and governance structures within their organisation. Employee Profit Share Scheme (EPSS) The EPSS was implemented in 2014 and aims to provide our employees with economic partnership and ownership whilst simultaneously sharing the responsibilities and involvement that this ownership brings. The implementation of this EPSS enabled Lonmin to receive an HDSA equity accreditation of 3.8%. Community Trusts 2014 saw the establishment of two separate community trusts. Each trust holds 0.9% of the ordinary shares in Lonplats (Eastern and Western Platinum combined), and is entitled to dividend payments which have been mandated for upliftment projects in the respective communities. To the extent that no dividend is payable in a particular year, each community trust will be entitled to a minimum annual payment of R5 million escalating in line with consumer price index each year. The first transfer of R5 million to each trust was made during the year. The funds are managed by ward councillors through a board of trustees, which is mandated to disburse funds for upliftment projects in the respective communities. The establishment of these trusts, governance structures and initial capital, could encourage other investors to contribute to enable more substantial development. While these transactions have been successfully concluded, there has been a challenge to the transaction by a faction within the Bapo community. Lonmin continues to engage with all stakeholders to resolve the issues of concern.

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MARKET REVIEW Market Overview 2016 During the financial year platinum and palladium prices staged a strong comeback, with platinum gaining 14% and palladium 10%, helping to improve operating margins for primary producers and end of the fiscal year. Metal prices subsequently retraced on the back of weaker than expected market sentiment. Disruptions in production at mines in South Africa, and lower than expected recycling growth from scrapped autocatalysts, assisted to widen the fundamental market deficit compared with 2015. Demand has remained steady. Diesel market share has not fallen as much as some may have expected in Europe and the role out of tighter emissions legislation globally has helped to keep autocatalyst demand flat year on year. It’s been a tough year for jewellery in China with difficult retail trading conditions, lower manufacturer restocking and fewer wedding registrations. Nonetheless, lower platinum prices have motivated higher sales elsewhere. This and the ongoing rise in demand in India and the United States is expected to partially offset an expected drop in China. Demand in 2016 Overall demand and individual segment market shares for platinum are set to remain steady for 2016, with autocatalysts continuing to dominate demand at 41% followed by jewellery at 33%. Despite negative media attention on diesel powertrains, market share has held up well and there was no sudden drop off by consumers as some feared. Autocatalyst demand for platinum was flat. Palladium demand is expected to be 1% higher as vehicle sales growth in the United States and China slowed. Rhodium demand is projected to decline by 5% as palladium and other technologies substitute. Global demand for jewellery is forecast to decline owing to lower demand in China, while investment demand reflected divergent trends in the various geographies. Holdings in the United States, Japan and Switzerland increased but were offset by a reduction in holdings in the UK and South Africa. The petroleum, chemical and electrical markets saw good growth in 2015 owing to plant expansion but the forecast for 2016 is expected to be lower or flat. Supply in 2016 A recovery in PGM prices has helped to provide periods of improved Rand free cash flow to producers in South Africa, with announcements of expansion projects more forthcoming towards the end of the financial year. Primary platinum supply was negatively impacted by mine accidents and safety stoppages during 2016. Notwithstanding the normal level of outages and, assuming no further out of the ordinary disruptions, supply is expected to be at least 100,000 ounces lower than the prior year. During 2015 and throughout 2016, recycling growth rates were constrained by the ongoing low scrap steel prices, limiting the amount of end-of-life autocatalysts being collected by recyclers. However, a recent recovery in both scrap steel and PGM prices has helped kick-start a recovery in autocatalyst collection rates but scrap steel prices remain well below pre-2015 levels, thus continuing to hold back PGM recycling.

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Sales In 2016 Lonmin sold 735,747 ounces of platinum into the market. Platinum sales contributed 65% to turnover. Palladium was the second highest contributor to the revenue basket with the 334,319 ounces sold, constituting 18% of Lonmin’s income. Combined sales of Rhodium, Ruthenium and Iridium contributed a further 12.5% and Gold and Base Metals made up the balance. PGM Prices During the financial year platinum outperformed both palladium and rhodium. However, the average price of each metal was substantially lower than was seen in financial year 2015. Refer to the Financial Review section for details on average prices. Platinum rallied in October 2015 to $908 per ounce, but fell to a multi-year low of $814 per ounce on 21 January 2016, before closing at $1,034 on 30 September 2016. The Rand started at 13.83 to the US Dollar in October 2015 and fell to a record low of R16.87 on 18 January 2016 against the US Dollar, dragging the platinum price down in US Dollar terms. The South African economy remained weak and the average exchange rate achieved for financial year 2016 was 14.77 to the US Dollar. In US Dollar terms, the platinum price has gained 13% over the financial year 2016 to close at $1,034. The palladium price was hit by concerns over Chinese growth so while its price recovered during 2016 it ended the financial year just 4% higher. Rhodium prices failed to join the rally in platinum and palladium and were down 13% year on year. Market Outlook 2017 The outlook for platinum is for demand to be virtually unchanged. In Western Europe diesel’s market share has been edging slightly lower, and is projected to continue to do so, but will be somewhat offset by continued growth in vehicle sales. In addition, tightening emissions’ legislation and increased vehicle production in the emerging markets should further offset any further decline in Europe. So a stable outlook for autocatalyst demand is projected. Global demand for jewellery is forecast to improve slightly after weakening in 2016. Solid investment demand is anticipated as bar and coin and Exchange Traded Fund investment are expected to be positive. Several new glass fabrication facilities in the rest of the world are set to lift platinum industrial requirements slightly next year, offsetting declining demand for nitric acid production and slower propane dehydrogenation capacity growth in China. Though primary producers are indicating similar production levels in 2017, there is a risk due to the current PGM basket price for further mine closures and project delays at producers in the fourth quartile of the cost curve. We believe that ultimately mine closures due to low prices will drive further deficits. Market Development Drivers Ongoing development in the PGM demand sectors continues to be a critical focus. We will continue to support the developments in jewellery, investment and automotive while giving particular support to new industries such as fuel cell adoption and additive manufacturing of PGM based products. The importance of harmonised global emissions legislations is critical and is central to a healthy platinum industry.

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MINERAL RESOURCES AND MINERAL RESERVES

2016 Mineral Resource

Main features of the Lonmin Mineral Resources as at 30 September 2016:

Attributable Mineral Resources were 180.6 million ounces of 3PGE+Au in 2016, a decrease of 2.3 million ounces from 2015. Revisions to the South African Mineral Resource estimates were confined to the Marikana and Pandora properties;

the Mineral Resources at Marikana (excluding tailings) decreased by 2.35 million ounces 3PGE+Au in 2016. This is attributed to the net effect of a decrease in the Merensky Mineral Resources (0.65 million ounces) and a decrease of the UG2 Mineral Resources (1.71 million ounces). The Merensky Measured and Indicated Mineral Resources decreased by 0.51 million ounces and the Inferred Mineral Resources decreased by 0.14 million ounces, due to re-evaluation after consideration of depletions. The UG2 Measured and Indicated Mineral Resources decreased by 1.75 million ounces mainly due to depletions and reassessment of geological losses. The Inferred Mineral Resource increased by 0.05 million ounces as a result of ore body re-evaluation; and

the Pandora Mineral Resource increased by 0.04 million ounces of 3PGE+Au, the result of reassessment of “white areas” previously excluded from the Mineral Resource, which was offset by 0.06 million ounces of mining depletion.

The Marikana Tailings, Akanani, Limpopo and Loskop Mineral Resources were unchanged during 2016. There were no revisions to the non-South African platinum Mineral Resources, the Denison 109 Footwall deposit in Canada was unchanged in 2016. The Mineral Resources for the Bumbo base metal and gold in Kenya were sold to the joint venture partner in 2016.

PGE Mineral Resources (Total Measured, Indicated and Inferred) 1,5,6

Ore source

30-Sep-2016 30-Sep-2015

Mt

3PGE+Au Pt

Mt

3PGE+Au Pt

g/t Moz Moz g/t Moz Moz

Marikana 728.6 4.91 115.0 69.3 742.2 4.92 117.4 70.6

Limpopo 128.8 4.07 16.8 8.4 128.8 4.07 16.8 8.4

Limpopo Baobab 46.1 3.91 5.8 3.0 46.1 3.91 5.8 3.0

Akanani 233.1 3.90 29.2 12.0 233.1 3.90 29.2 12.0

Pandora JV 77.5 4.65 11.6 7.0 77.3 4.65 11.5 7.0

Loskop JV 10.1 4.04 1.3 0.8 10.1 4.04 1.3 0.8

Sudbury PGM JV 0.2 5.86 0.04 0.02 0.2 5.86 0.04 0.02

Tailings Dams 22.5 1.10 0.80 0.5 22.5 1.10 0.80 0.5

Total 1,246.8 4.51 180.6 101.0 1,260.2 4.51 182.9 102.3

Notes on Mineral Resources

1) All figures are reported on a Lonmin Plc attributable basis, the relative proportions of ownership per project being shown in the Key Assumptions section of this report. (Mineral Resources are reported inclusive of Mineral Reserves).

2) Limpopo excludes Baobab shaft. 3) Loskop and Sudbury PGM JV exclude Rh, due to insufficient assays, and therefore 2PGE+Au are reported. 4) Tailings Dam exclude Au, due to assay values below laboratory detection limit, and therefore are reported as 3PGE.

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5) Mineral Resources are reported Inclusive of Mineral Reserves. 6) Quantities and grades have been rounded to one or two decimal places, therefore minor computational errors may

occur.

2016 Mineral Reserves

Main features of the Lonmin Mineral Reserves as at 30 September 2016:

Attributable Mineral Reserves were 31.7 million ounces of 3PGE+Au in 2016, a decrease of 4.6 million ounces from Marikana and 0.1 million ounces from Pandora

with 2015. The Marikana tailings were unchanged;

the Marikana attributable Mineral Reserves for 2016 are 30.1 million ounces of 3PGE+Au, a decrease of 4.6 million ounces with a corresponding decrease of 32.9 million tonnes ore material. The change is attributed to mining depletion at Marikana and mostly the reconfiguration of the ore extraction at Hossy Shaft;

the Proved Mineral Reserve category (Marikana and Pandora) decreased by 0.2 million ounces of 3PGE+Au;

the further reassessment of the Hossy Shaft operations has resulted in a further removal of 13.1 Mt of ore material in 2016 through the reconfiguration of the Hossy Shaft block; and

the Pandora attributable Mineral Reserve of 0.8 million ounces 3PGE+Au decreased by 0.1 million ounces due to depletion and re-evaluation.

No Mineral Reserves continue to be declared for Limpopo, and there were no revisions thereof in 2016. PGE Mineral Reserves (Total Proved and Probable) 1,2

Ore source

30-Sep-2016 30-Sep-2015

Mt

3PGE+Au Pt

Mt

3PGE+Au Pt

g/t Moz Moz g/t Moz Moz

Marikana 230.9 4.06 30.1 18.3 263.8 4.10 34.7 21.2

Pandora JV 6.1 4.20 0.8 0.5 6.6 4.09 0.9 0.5

Tailings Dams 21.1 1.10 0.7 0.5 21.1 1.10 0.7 0.5

Total 258.2 3.82 31.7 19.2 291.5 3.88 36.4 22.2

Notes on Mineral Reserves

1) All figures are reported on a Lonmin Plc attributable basis, the relative proportions of ownership per project being shown in the Key Assumptions section of this report.

2) Tailings Dam exclude Au, due to assay values below laboratory detection limit, and therefore are reported as 3PGE. 3) Quantities and grades have been rounded to one or two decimal places, therefore minor computational errors may

occur.

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FINANCIAL REVIEW Overview In the first half of the financial year we completed the significant reorganisation and restructuring of the Company. This

followed on from raising fresh equity through a Rights Issue raising $373 million net of fees and an amendment of our debt

facilities, extending their maturity to May 2019 with an option to extend to 2020. During the three quarters following the

restructuring the Group’s business generated $104 million of cash. At 30 September 2016 the Group had net cash of $173

million after taking into account a $150 million drawn term loan and $215 million of undrawn debt facilities available resulting

in total liquidity (liquidity being defined as cash on hand plus undrawn committed debt facilities) of $537 million. It remains

our overall objective to be at least cash neutral after capital expenditure in this low-price environment.

PGM prices were volatile during the year with the platinum price ranging from a low of $816 per ounce on 21 January 2016

to a high of $1,184 on 10 August 2016. On average the platinum price for the financial year was 11% lower than the prior

year. However, the completion of the restructuring of the business in the first half of the year, continued focus on cost

management, capital expenditure discipline and the weakening of the Rand by 23% against the US Dollar resulted in improved

profitability compared to the prior year. We achieved cost reductions of R1.3 billion (real terms) compared to the prior year

and compared to a targeted reduction of R700 million. The cost of production per PGM ounce for the year was R10,748. The

year-on-year increase in unit costs was limited to 4%, well below current inflationary levels and despite an 8.2% increase in

labour costs and a very challenging operating environment that was hard hit by safety stoppages as well as the disruption

from restructuring the workforce which resulted in 5,433 employees and contractors leaving the Group and 1,428 employees

being reskilled and redeployed into vacant, more productive roles. Further details on unit costs can be found in the Operating

Statistics section of the Report. Underlying EBITDA for 2016 was $109 million, an increase of $89 million on 2015 and an

underlying operating profit of $7 million was realised compared to an underlying operating loss of $134 million in 2015.

The trading cash inflow for the year was $58 million, $70 million higher than the prior year trading cash outflow of $12 million.

After capital expenditure of $89 million in the year the free cash outflow for 2016 was $31 million. Excluding the negative

impact of once-off restructuring and reorganisation payments of $13 million and $10 million financing costs to amend the

debt facilities we were largely successful in our aim to fund capital expenditure for the year from free cash flow. The net cash

inflow in the combined three quarters following the restructuring was positive at $104 million.

We made significant efforts during the year to generate additional value from our assets. The clean-up project around the

smelter yielded additional PGM sales of $93 million including 73,186 ounces of Platinum. The commissioning of the OPM

Plant in December 2015 reduced the time it takes us to refine Rhodium and Iridium resulting in a permanent once-off release

of metal in process stock of around $24 million representing 25,280 ounces of Rhodium and 13,067 ounces of Iridium. We

secured $50 million third party competitive funding for the Bulk Tailings Treatment project through a specific project finance

metal streaming agreement. The first tranche of the project funding of $9 million was received in August 2016. Furthermore,

we sold our stake in a non-core gold exploration joint venture in Kenya for $5 million.

The long-term Rhodium price outlook softened during the second half of the year and the Rand to US Dollar exchange rate strengthened. The impact of the changes in these external factors, despite good progress against the Business Plan resulted in a reduction in the recoverable amount of the Marikana cash generating unit (CGU) and an impairment charge of $335 million which is reflected in the financial statements. Income Statement

The $142 million increase between the underlying operating profit of $7 million for the year ended 30 September 2016 and

the underlying operating loss of $134 million for the year ended 30 September 2015 is analysed overleaf:

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$m 2015 reported operating loss (2,018) 2015 special items 1,884

2015 underlying operating loss (134)

2015 underlying depreciation and amortisation 155

2015 underlying EBITDA 21

PGM price PGM volume PGM mix Base metals

(171) (24) 35

(15)

Revenue changes (175)

South African underlying operating cost reductions (FY15 money terms and exchange rate) 111 Escalation on South African underlying costs at CPI of 6.5% (72)

South African cost changes 39 Decrease in international exploration and other costs 4 Foreign exchange impact on cost, stock and working capital 256 Metal stock movement (36)

2016 underlying EBITDA 109 2016 underlying depreciation and amortisation (102)

2016 underlying operating profit 7 2016 special items (329)

2016 reported operating loss (322)

Revenue Total revenue for the year ended 30 September 2016 of $1,118 million reflects a decrease of $175 million compared to the

prior year. As noted in the Overview, the US Dollar PGM prices achieved were significantly lower than the prior year despite

the platinum price steadily increasing since January 2016, reversing the downward trend in the prior year. The average prices

achieved on the key metals sold are shown below:

Year ended

30 September 2016 Year ended

30 September 2015 $/oz $/oz Platinum 978 1,095 Palladium 589 718 Rhodium 671 998

PGM basket (including by-product revenue) 796 902

Rand PGM basket (including by-product revenue) R11,637 R10,829

The US Dollar PGM basket price (including by-products) decreased by 12% compared to the 2015 average price, resulting in a reduction in revenue of $171 million. It should be noted that whilst the US Dollar basket price decreased compared to 2015, in Rand terms the basket price (including by-products) increased by 7% driven by the weaker Rand.

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The PGM sales volume for the year to 30 September 2016 was 2% lower compared to the year to 30 September 2015, which had a negative impact on revenue of $24 million. The mix of metals sold increased revenue by $35 million mainly due to the higher proportion of Rhodium sold in 2016 as a result of the commissioning of the OPM plant in December 2015. Base metal revenue decreased by $15 million as a result of a reduction in prices compared to 2015. Costs The positive impact of the removal of high cost production and reorganisation are evidenced across all our operations with underlying South African operating costs decreasing by $111 million in financial year 2015 money terms and excluding the impact of the weaker Rand. Total costs in Rand in 2016 were R14,083 million. In 2015 money terms the total costs for 2016 would have been R13,223 million (assuming South African Consumer Price Index of 6.5%). With actual costs of R14,550 million in 2015, this means that on a like-for-like basis, 2016 total costs were R1,327 million lower than the prior year, almost double the guided cost savings of R700 million. The movements in operating costs are shown in the table below:

$m Rand 2015 – underlying South African operating costs (1,218) (14,550)

Cost reductions in FY15 money terms and exchange rate (Rand/USD 12.0):

Underground mining 64 757 Opencast mining 5 61 Concentrating 15 182 Smelting and refining 4 45 Overhead, centralised services and other 14 171

Ore and concentrate purchases 9 111

111 1,327 Escalation, assuming South African CPI of 6.5% (72) (860)

Translation gains on underlying costs due to movement in exchange rate 216

2016 – underlying South African operating costs (963) (14,083)

Before CPI escalation, underground mining costs decreased by R757 million or 8% during the year as the restructuring, reduction in volumes mined and strict cost control more than offset the labour cost increase of 8.2% and other escalations. Opencast mining costs decreased by R61 million as these operations have ceased. Concentrating costs decreased by R182 million or 11% when compared to 2015 driven by lower production. Smelting and refining costs reductions were R45 million or 3% despite broadly flat PGM production year on year. Overheads reduced by R171 million largely due to cost containment, the reorganisation programme and a reduction in the provision for rehabilitation at our opencast operations which were closed. Ore and concentrate purchases decreased by R111 million year on year driven by lower volumes produced by suppliers of this material and lower prices. Exchange rate impacts The Rand weakened by 23% against the US Dollar during the year averaging R14.8 to $1 in 2016 compared to an average of R12.0 to $1 in 2015 resulting in a $255 million positive impact on the underlying operating cost of sales.

26

2016 2015 R/$ R/$ Average exchange rate for the year 14.77 12.01 Closing exchange rate 13.71 13.83

The weaker Rand resulted in underlying operating costs for 2016 being $216 million lower than 2015 and the movement in metals stock due to the weaker Rand was $88 million favourable to the prior year. The exchange gain on working capital was $2 million in 2016 compared with $50 million in 2015 resulting in an adverse movement year on year of $48 million.

$m Year on year cost reduction due to impact of weaker Rand 216 Reduction in metal stock movement due to impact of weaker Rand 88 Year on year reduction in exchange gains on working capital (48)

Net impact of exchange rate movements 256

Metal stock movement The decrease in metal stock of $36 million was driven by an $80 million decrease in metal stock offset by a $44 million reversal in the 2015 write-down of stock to net realisable value. This reversal was driven by higher metal prices at the balance sheet date. The decrease in the value of metal stock was largely due to the strength of the Dollar against the Rand, the release of stock following the commissioning of the OPM plant, and other efficiency projects that resulted in a reduction in in-process metal inventory. Depreciation and amortisation Depreciation and amortisation decreased by $53 million year on year mainly due to the impairment of assets in September 2015. The reduced production from the Generation 1 shafts, in line with our plans for placement on care and maintenance, also had an impact on the depreciation charge as depreciation is calculated on a units-of-production basis, spreading costs in relation to proven and probable reserves. Special operating costs

Special operating costs for the year ended 30 September 2016 were made up as follows: Year ended 30 September 2016 2015 $m $m

Impairment of non-financial assets (335) (1,811) Restructuring and reorganisation costs 21 (59) Debt refinancing costs (10) - Share based payments (5) - BEE transaction (14)

(329) (1,884)

The revised rhodium price outlook and the strengthening of the Rand since our Interim results in March 2016 offset optimisation improvements in our mining plan and resulted in the value in use of the Marikana cash generating unit declining

27

below the carrying amount of the non-financial assets of the operations of $1,625 million. The recoverable amount of the Marikana CGU was $1,290 million. As a result of the impact of the changes in these external factors and despite good progress made in the year against the Business Plan, a special impairment charge of $335 million is reflected in the financial statements (2015 - $1,465 million). In 2015 the special impairment charge was $1,811 million of which $1,465 million related to the Marikana operation and $346 million related to the full impairment of the Limpopo and Akanani assets. See note 10 to the Financial Statements for details.

The planned reorganisation of the business was achieved at a lower cost due to the reskilling and redeployment of employees combined with a greater proportion of contractors departing as well as natural attrition resulting in a $21 million reversal of the 2015 provision for restructuring costs. Costs incurred to amend the bank debt facilities amounted to $10 million while the adjustment to reflect the Rights Issue and share consolidation in 2015 resulted in the acceleration of share based expenses to the amount of $5 million. For the period ended 30 September 2015, $14 million was incurred in relation to the BEE transaction concluded in December 2014 which largely comprised $13 million for the lock-in premium paid to the Bapo as well as legal and consulting costs of $1 million related to the transaction.

Net Finance costs Year ended 30 September 2016

$m 2015

$m Net bank interest and fees (11) (25) Interest and fees capitalised 1 19 Foreign exchange gains on net cash/(debt) 15 12 Dividends received from investment 1 1 Unwinding of discount on environmental provision (9) (10) Other (2) (1)

Underlying net finance costs (5) (4) HDSA receivable – accrued interest 27 18 HDSA receivable – exchange losses (60) (28) HDSA receivable – impairment - (227) Foreign exchange gains on the Rights Issue proceeds 5 -

Net finance costs (33) (239)

Underlying total net finance costs increased by $1 million to $5 million for the year ended 30 September 2016. Net bank interest and fees incurred in the year at $11 million were $14 million lower than 2015 due the impact of the strengthened balance sheet and accordingly the reduction in drawn debt facilities. Interest totalling $1 million was capitalised to assets compared to $19 million in 2015 as the debt facilities at asset level were repaid in December 2015. Exchange gains on net cash in 2016 amounted to $15 million compared with $12 million exchange gains on net debt in 2015. The Historically Disadvantaged South Africans (HDSA) receivable, being the Sterling loan to Phembani Group (Proprietary) Limited (Phembani) accrued interest and attracted an exchange loss. The loan was granted to Shanduka Resources Group (Proprietary) Limited, our former BEE partner, which has now merged with Phembani, and the merged entity operates as Phembani Group (Proprietary) Limited. The gross loan, excluding prior years impairments of $376 million, drew an exchange loss for the year of $60 million (2015 – $28 million) due to the significant weakening of Sterling against the US Dollar in 2016 on the back of the uncertainty following the referendum result regarding the UK’s exit from the EU. Prior years impairments are based in US Dollar, being the Group’s functional currency, resulting in no exchange gains. Accrued interest of $27 million in 2016 was higher than the $18 million charged in 2015 due to a 2.5% increase in the rate of interest charged on the loan from July 2015. The balance of the receivable at 30 September 2016 was $69 million (2015 - $102 million).

28

The $5 million foreign exchange gains on the Rights Issue comprise the gains on translation of advanced cash proceeds received prior to the effective date of the Rights Issue as well as hedging gains on forward exchange contracts entered into to minimise the risk of the exposure to currency fluctuations on the Rand and Pound Sterling proceeds. Taxation Reported tax for 2016 was a charge of $45 million compared to a credit of $363 million in 2015. The tax charge of $45 million includes the tax impact of special items of $59 million (2015 – $280 million) and special exchange gains on the retranslation of Rand denominated deferred tax liabilities of $5 million (2015 - $48 million). Cash generation and net cash The following table summarises the main components of the cash flow during the year:

Year ended 30 September 2016 2015 $m $m Operating loss (322) (2,018) Depreciation, amortisation and impairment 437 1,966 Changes in working capital (25) 63 Other non-cash movements (8) 4

Cash flow generated from operations 82 15 Interest and finance costs (14) (24) Tax paid (10) (3)

Trading cash inflow/(outflow) 58 (12) Capital expenditure (89) (136) Dividends paid to minority shareholders - (19)

Free cash outflow (31) (167) Contributions to joint venture (3) (7) Proceeds from sale of joint venture 5 - Net proceeds from equity issuance 368 3

Cash inflow/(outflow) 339 (171) Opening net debt (185) (29) Foreign exchange 20 17 Unamortised fees (1) (2)

Closing net cash/(debt) 173 (185)

Trading cash inflow/(outflow) (cents per share) 23.2c (24.8)c

Free cash outflow (cents per share) (12.4)c (345.6)c

Cash flow generated by operations for 2016 at $82 million represented an increase of $67 million compared to 2015. The increase in profitability in the current year more than offset working capital movements which at $(25) million were $88 million adverse to the prior year. Operating cash flow for the year included $13 million one-off voluntary separation payments as part of the reorganisation and $10 million financing costs to amend the debt facilities. Trading cash flow for the year increased by $70 million to $58 million compared to the prior year trading cash outflow of $12 million. The cash outflow on interest and finance costs decreased by $10 million as the proceeds from the Rights Issue were used to pay down the Rand debt facilities. Tax paid in the year of $10 million was $7 million higher than the prior year on the back of increased profitability. The prior year tax payment was also reduced by the utilisation of brought forward trading losses. The trading cash inflow per share was 23.2 cents for the year ended 30 September 2016 compared to a cash outflow of 24.8 cents in the prior year.

29

The strength of the US Dollar against the Rand lowered capital expenditure for 2016 by $14 million compared with that anticipated in the Business Plan. Capital expenditure at $89 million for 2016 was $47 million lower than the prior year as we followed our strategy of minimising capital expenditure whilst ensuring compliance to regulatory and safety standards and ensuring that the Immediately Available Ore Reserve position is maintained at the level necessary to support planned production at the Generation 2 shafts. This current year spend was lower than the revised guidance of $105 million as a result of the delay in obtaining the funding for the BTT project and the associated delay in capital spend for the Rowland pump station as well as ongoing cost containment. Barrie van der Merwe Chief Financial Officer

30

Operating statistics 5 year review

Units 2016 2015 2014 2013 2012

Tonnes mined1 Generation 2 K3 shaft kt 2,687 2,713 1,484 3,101 2,646

Rowland shaft kt 1,731 1,872 1,005 1,781 1,599

Saffy shaft kt 2,055 1,758 782 1,150 898

4B shaft kt 1,588 1,409 768 1,559 1,333

Generation 2 kt 8,061 7,752 4,039 7,591 6,475

Generation 1 1B shaft kt 6 219 123 286 289

Hossy shaft kt 712 953 609 1,051 864

Newman shaft kt 346 765 428 948 919

W1 shaft kt 162 180 102 170 126

East 1 shaft kt 141 148 104 390 496

East 2 shaft kt 293 390 279 426 397

East 3 shaft kt 63 68 28 94 104

Pandora (100%) 2 kt 471 544 299 571 435

Generation 1 kt 2,196 3,267 1,973 3,935 3,628

K4 shaft kt - 49 - 4 117

Total Underground

kt 10,256 11,067 6,012 11,531 10,221

Opencast kt 49 230 333 528 443

Total Underground

& Opencast kt 10,305 11,297 6,345 12,058 10,663

Limpopo3 Underground kt - - 6 - -

Lonmin 100% Total Tonnes

mined kt 10,305 11,297 6,351 12,058 10,663

% tonnes mined from UG2 reef (100%) % 75.3 75.1 74.1 73.9 71.7

Lonmin (attributable)

Underground & Opencast kt 10,070 11,016 6,180 11,730 10,413

Ounces mined4

Lonmin excl. Pandora Platinum oz 627,245 668,319 371,651 717,882 635,346

Pandora (100%) Platinum oz 32,509 36,458 20,327 40,917 30,714

Limpopo Platinum oz - 255 - -

Lonmin Platinum oz 659,754 704,776 392,233 758,799 666,060

Lonmin excl. Pandora Total PGMs oz 1,200,244 1,280,964 707,913 1,340,678 1,174,776

Pandora (100%) Total PGMs oz 63,857 71,861 40,044 78,353 58,300

Limpopo Total PGMs oz - - 572 - -

Lonmin Total PGMs oz 1,264,101 1,352,825 748,529 1,419,032 1,233,076

Tonnes milled5 Marikana Underground kt 9,806 10,930 5,389 10,854 9,936

Opencast kt 98 318 422 393 450

Total kt 9,904 11,248 5,810 11,248 10,386

Pandora6 Underground kt 471 562 281 574 432

Limpopo7 Underground kt - - 27 - -

Lonmin Underground kt 10,277 11,491 5,696 11,428 10,367

Platinum Opencast kt 98 318 422 393 450

Total kt 10,375 11,810 6,118 11,822 10,817

Milled head Lonmin Underground g/t 4.60 4.51 4.48 4.60 4.56 grade8 Platinum Opencast g/t 3.59 3.08 3.20 2.92 3.01

Total g/t 4.59 4.47 4.39 4.54 4.49

Concentrator Lonmin Underground % 86.7 86.8 87.0 87.0 86.1 recovery rate9 Platinum Opencast % 73.6 85.1 84.5 85.3 85.9

Total % 86.6 86.7 86.9 87.0 86.1

31

Operating statistics 5 year review

Units 2016 2015 2014 2013 2012

Metals-in-concentrate10

Marikana Platinum oz 631,066 696,489 355,926 706,012 646,393

Palladium oz 292,315 323,177 164,960 323,622 295,409

Gold oz 15,206 16,503 9,879 17,664 16,925

Rhodium oz 90,151 101,435 49,908 95,241 83,144

Ruthenium oz 147,740 165,689 81,693 144,304 127,269

Iridium oz 29,845 32,416 16,143 33,059 27,610

Total PGMs oz 1,206,322 1,335,710 678,508 1,319,902 1,196,750

Limpopo Platinum oz - - 1,121 - -

Palladium oz - - 974 - -

Gold oz - - 93 - -

Rhodium oz - - 114 - -

Ruthenium oz - - 161 - - Iridium oz - - 44 - -

Total PGMs oz - - 2,508 - -

Pandora Platinum oz 32,509 37,553 18,913 41,117 30,625

Palladium oz 15,231 17,496 8,960 19,190 14,261

Gold oz 95 131 54 315 228

Rhodium oz 5,360 6,383 3,226 6,563 4,743

Ruthenium oz 8,852 10,466 5,168 9,764 7,135

Iridium oz 1,811 1,988 916 1,773 1,195

Total PGMs oz 63,857 74,019 37,237 78,721 58,188

Lonmin Platinum oz 663,575 734,042 375,960 747,129 677,019

Platinum Palladium oz 307,545 340,673 174,894 342,812 309,670

before Gold oz 15,301 16,635 10,026 17,979 17,153

concentrate Rhodium oz 95,511 107,818 53,248 101,803 87,886

purchases Ruthenium oz 156,591 176,156 87,022 154,067 134,404

Iridium oz 31,655 34,405 17,103 34,832 28,805 Total PGMs oz 1,270,179 1,409,729 718,253 1,398,623 1,254,938

Concentrate Platinum oz 5,129 6,273 4,398 3,813 2,802

purchases Palladium oz 1,555 1,869 1,242 1,132 973

Gold oz 18 18 14 14 10

Rhodium oz 565 816 531 421 329

Ruthenium oz 919 1,079 546 428 404

Iridium oz 242 338 224 172 129

Total PGMs oz 8,429 10,394 6,955 5,980 4,647

Lonmin Platinum oz 668,704 740,315 380,359 750,942 679,821

Platinum Palladium oz 309,101 342,542 176,136 343,944 310,643

Gold oz 15,319 16,653 10,040 17,993 17,163

Rhodium oz 96,076 108,634 53,779 102,225 88,216

Ruthenium oz 157,510 177,235 87,567 154,495 134,808

Iridium oz 31,898 34,743 17,327 35,004 28,934 Total PGMs oz 1,278,607 1,420,122 725,208 1,404,603 1,259,585

Nickel11 MT 3,265 3,669 2,092 3,743 3,489

Copper11 MT 1,983 2,250 1,314 2,340 2,226

Refined Lonmin Platinum oz 739,315 759,005 431,683 707,665 648,414 production refined metal Palladium oz 334,470 350,040 208,756 319,841 310,558

production Gold oz 19,596 18,232 12,299 18,676 18,398

Rhodium oz 121,149 102,372 76,940 79,124 110,896

Ruthenium oz 177,006 181,803 107,166 171,052 153,394

Iridium oz 44,855 32,180 27,991 28,068 32,844

Total PGMs oz 1,436,390 1,443,633 864,835 1,324,426 1,274,503

Toll refined Platinum oz 2,575 689 4,501 1,364 38,958

metal Palladium oz 713 280 1,765 662 21,043

production Gold oz 30 14 116 289 729

Rhodium oz 207 95 1,546 1,837 4,717

Ruthenium oz 698 2,093 7,417 6,519 7,907 Iridium oz 110 560 1,914 1,012 1,944

Total PGMs oz 4,333 3,731 17,259 11,683 75,299

32

Operating statistics 5 year review

Units 2016 2015 2014 2013 2012

Refined Toll refined Platinum oz 741,890 759,695 436,184 709,029 687,372 production PGMs Palladium oz 335,183 350,320 210,521 320,503 331,601

Gold oz 19,626 18,246 12,415 18,965 19,128

Rhodium oz 121,356 102,467 78,486 80,961 115,613

Ruthenium oz 177,704 183,896 114,583 177,571 161,300

Iridium oz 44,965 32,740 29,905 29,081 34,788

Total PGMs oz 1,440,724 1,447,364 882,094 1,336,109 1,349,802 Base metals Nickel12 MT 3,769 3,720 2,387 3,532 3,786

Copper12 MT 2,227 2,276 1,480 2,168 2,153

Sales Refined Platinum oz 735,747 751,560 441,684 695,803 701,831

metal sales Palladium oz 334,319 347,942 212,500 313,030 335,849

Gold oz 20,735 19,199 13,100 18,423 19,273

Rhodium oz 121,604 92,520 81,120 77,625 119,054

Ruthenium oz 145,306 192,549 121,904 168,266 170,751

Iridium oz 47,392 30,114 29,778 28,828 37,187

Total PGMs oz 1,405,103 1,433,883 900,087 1,301,973 1,383,945

Nickel12 MT 3,773 3,656 2,251 3,586 3,843

Copper12 MT 2,265 2,131 1,448 2,130 2,197

Chrome12 MT 1,563,236 1,440,901 747,881 1,388,761 1,209,643

Average Platinum $/oz 978 1,095 1,403 1,517 1,517

prices Palladium $/oz 589 718 775 715 630

Gold $/oz 1,425 1,487 1,509 1,508 1,597

Rhodium $/oz 671 998 1,050 1,097 1,274

Basket price of PGMs13 $/oz 753 849 1,013 1,100 1,095

Full Basket price of PGMs14 $/oz 796 902 1,072 1,167 1,163

Basket price of PGMs13 R/oz 11,030 10,207 10,654 10,291 8,807

Full Basket price of PGMs14 R/oz 11,637 10,829 11,277 10,921 9,304

Nickel12 $/MT 7,357 10,512 13,053 12,772 14,330

Copper12 $/MT 4,508 5,584 6,810 7,113 7,201

33

Operating statistics 5 year review

Units 2016 2015 2014 2013 2012

Capital Rm 1,268 1,641 992 1,500 3,296 Expenditure15 $m 89 136 93 159 408

Employees & Employees as at 30 September # 25,296 26,968 28,276 28,379 28,230 contractors Contractors as at 30 September # 7,497 8,701 10,016 10,042 8,293

Productivity

(Generation 2) m2per mining employee (shaft head)

K3 shaft m2/person 5.6 5.5 2.9 6.0 5.5 4B/1B shaft16 m2/person 7.6 6.8 3.7 7.7 6.9

Rowland shaft m2/person 5.6 5.9 3.1 5.7 5.7 Saffy shaft m2/person 5.5 4.6 2.1 3.8 3.8

Generation 2 m2/person 5.9 5.6 2.9 5.8 5.5

m2per per stoping & white area crew K3 shaft m2/crew 284.5 285.4 151.4 313.4 n/a 4B/1B shaft16 m2/crew 387.7 338.8 180.5 371.2 n/a Rowland shaft m2/crew 340.7 335.1 200.2 344.4 n/a Saffy shaft m2/crew 292.6 243.5 121.7 249.4 n/a

Generation 2 m2/crew 316.4 296.4 160.6 321.8 n/a

Exchange Average rate for period17 R/$ 14.77 12.01 10.55 9.24 8.05 rates £/$ 0.70 0.65 0.60 0.64 0.63 Closing rate R/$ 13.71 13.83 11.29 9.99 8.30 £/$ 0.77 0.66 0.62 0.62 0.62

Underlying PGM operations segment cost of sales Mining $m (625) (785) (622) (919) (877) Concentrating $m (114) (145) (107) (159) (168) Smelting and refining18 $m (102) (120) (106) (133) (147)

Shared services $m (49) (71) (74) (101) (100)

Management and marketing services $m (21) (25) (24) (26) (35)

Ore, concentrate and other purchases $m (34) (48) (38) (64) (48)

Limpopo mining $m (2) (2) (3) (7) (9)

Special item adjustment $m - - 287 - 121

Community trusts donations $m (1) (1) - - -

Royalties $m (7) (9) (5) (6) (8)

Shared based payments $m (11) (14) (15) (13) (12) Inventory movement $m (34) (84) (79) 203 (140)

FX and Group Charges $m (1) 51 25 44 14

Total PGM operations segment $m (999) (1,253) (761) (1,181) (1,412)

Evaluation – excluding FX $m - - - 1 2

Exploration – excluding FX $m (5) (7) (6) (4) (5)

Corporate – excluding FX $m (3) (2) (2) (10) (4)

FX $m (2) (10) (1) (4) (2)

Total underlying cost of sales $m (1,009) (1,272) (771) (1,199) (1,421)

PGM operations segment

Mining Rm (9,155) (9,414) (6,556) (8,545) (7,079)

Concentrating Rm (1,650) (1,731) (1,121) (1,469) (1,346)

Smelting and refining18 Rm (1,470) (1,426) (1,119) (1,235) (1,183)

Shared services Rm (721) (810) (786) (928) (805)

Management and marketing services

Rm (304) (294) (256) (243) (287)

Ore, concentrate and other purchases

Rm (494) (574) (402) (597) (385)

Limpopo mining Rm (23) (25) (31) (61) (76)

34

Operating statistics 5 year review

Units 2016 2015 2014 2013 2012

Underlying PGM operations segment

cost of sales Special item adjustment Rm - - 3,028 - 966

Community trusts donations $m (15) (10) - - -

Royalties Rm (94) (103) (52) (55) (68)

Shared based payments Rm (158) (164) (148) (121) (99)

Inventory movement Rm (510) 6 (480) 2,145 (842)

FX and Group Charges Rm 257 (2,659) (1,117) (1,247) (218)

Rm (14,335) (17,203) (9,040) (12,356) (11,424)

Shaft head unit Rand per tonne cost - K3 shaft R/T (890) (840) (990) (629) (599) underground 4B/1B shaft16 R/T (714) (760) (859) (571) (527) operations Rowland shaft R/T (936) (825) (992) (694) (631) excluding K4 Saffy shaft R/T (858) (886) (1,164) (878) (853)

Generation 2 R/T (857) (830) (995) (666) (623)

Hossy shaft (915) (927) (1,002) (749) (698)

Newman shaft R/T (1,008) (738) (907) (592) (603)

East 1 shaft R/T (1,041) (1,025) (1,162) (611) (505)

East 2 shaft R/T (1,033) (824) (831) (657) (642)

East 3 shaft & ore purchases R/T (927) (872) (964) (905) (788)

W1 shaft R/T (920) (902) (987) (934) (989)

Generation 1 R/T (957) (858) (956) (720) (662)

Total underground R/T (878) (838) (983) (683) (636)

Rand per PGM oz

K3 shaft R/oz (7,409) (7,171) (8,683) (5,314) n/a

4B/1B shaft16 R/oz (6,806) (7,442) (8,231) (5,385) n/a

Rowland shaft R/oz (7,359) (6,428) (7,727) (5,292) n/a

Saffy shaft R/oz (6,755) (7,143) (9,702) (7,912) n/a

Generation 2 R/oz (7,118) (7,023) (8,539) (5,683) n/a

Hossy shaft R/oz (6,961) (8,375) (8,472) (6,671) n/a

Newman shaft R/oz (7,568) (5,412) (6,741) (4,626) n/a

East 1 shaft R/oz (7,949) (7,406) (8,233) (4,805) n/a

East 2 shaft R/oz (7,654) (6,163) (6,924) (5,175) n/a

East 3 shaft & ore purchases R/oz (6,960) (6,522) (7,201) (6,606) n/a

W1 shaft R/oz (7,565) (7,362) (6,969) (7,695) n/a

Generation 1 R/oz (7,257) (6,774) (7,487) (5,778) n/a

Total underground R/oz (7,150) (6,950) (8,195) (5,714) n/a

35

Operating statistics 5 year review

Units 2016 2015 2014 2013 2012

Cost of production Cost (PGM operations Mining Rm (9,155) (9,414) (6,556) (8,545) (7,079) segment)19 Concentrating Rm (1,650) (1,731) (1,121) (1,469) (1,346) Smelting and refining18 Rm (1,470) (1,426) (1,119) (1,235) (1,183)

Shared services Rm (721) (810) (786) (928) (805)

Management and marketing services

Rm (304) (294) (256) (243) (287)

Rm (13,299) (13,674) (9,838) (12,420) (10,701)

PGM Saleable ounces

Mined ounces excluding ore purchases

oz 1,200,244 1,280,964 707,913 1,340,678 1,174,776

Metals-in-concentrate before concentrate purchases

oz 1,270,178 1,409,729 715,746 1,398,623 1,254,938

Refined ounces oz 1,440,724 1,447,364 882,094 1,336,109 1,349,802

Metals-in-concentrate including concentrate purchases

oz 1,278,607 1,420,122 722,701 1,404,603 1,259,585

Cost of production

Mining R/oz (7,627) (7,349) (9,261) (6,373) (6,026) Concentrating R/oz (1,299) (1,228) (1,567) (1,051) (1,073)

Smelting and refining18 R/oz (1,020) (985) (1,269) (925) (877)

Shared services R/oz (564) (570) (1,087) (661) (639)

Management and marketing services

R/oz (237) (207) (355) (173) (228)

R/oz (10,748) (10,339) (13,538) (9,182) (8,843)

% increase in cost of production

Mining % (3.8) 20.6 (45.3) (5.8) (12.4)

Concentrating % (5.8) 21.6 (49.2) 2.1 (11.8)

Smelting and refining18 % (3.6) 22.4 (37.3) (5.4) (5.4) Shared services % 1.1 47.5 (64.5) (3.3) (27.2)

Management and marketing services

% (14.8) 41.7 (104.9) 24.1 (41.9)

% (4.0) 23.6 (47.4) (3.8) (13.1)

Footnotes:

1 Reporting of shafts are in line with our operating strategy for Generation 1 and Generation 2 shafts.

2 Pandora underground and opencast tonnes mined represents 100% of the total tonnes mined on the Pandora joint venture of which 42.5% for October and November 2014 and 50% thereafter is attributable to Lonmin.

3 Limpopo underground tonnes mined represents low grade development tonnes mined whilst on care and maintenance.

4 Ounces mined have been calculated at achieved concentrator recoveries and with Lonmin standard downstream processing recoveries to present produced saleable ounces.

5 Tonnes milled exclude slag milling.

6 Lonmin purchases 100% of the ore produced by the Pandora joint venture for onward processing which is included in downstream operating statistics.

7 Limpopo tonnes milled represent low grade development tonnes milled.

8 Head grade is the grammes per tonne (5PGE + Au) value contained in the tonnes milled and fed into the concentrator from the mines (excludes slag milled).

9 Recovery rate in the concentrators is the total content produced divided by the total content milled (excluding slag).

10 As from 2014, metals-in-concentrate have been calculated at Lonmin standard downstream processing recoveries to present produced saleable ounces.

11 Corresponds to contained base metals in concentrate.

12 Nickel is produced and sold as nickel sulphate crystals or solutions and the volumes shown correspond to contained metal. Copper is produced as refined product but typically at LME grade C. Chrome is produced in the form of chromite concentrate and volumes shown are in the form of chromite.

13 Basket price of PGMs is based on the revenue generated in Rand and Dollar from the actual PGMs (5PGE + Au) sold in the period based on the appropriate Rand / Dollar exchange rate applicable to each sales transaction.

14 As per footnote 13 but including revenue from base metals.

15 Capital expenditure is the aggregate of the purchase of property, plant and equipment and intangible assets (includes capital accruals and excludes capitalised interest).

16 Includes 1B shaft.

17 Exchange rates are calculated using the market average daily closing rate over the course of the period.

18 Comprises of Smelting and Refining costs as well as direct Process Operations shared costs.

19 It should be noted that with the implementation of the revised operating model in 2014, 2015 and 2016 the cost allocation between business units has been changed and, therefore, whilst the total is on a like-for-like basis, individual line items are not totally comparable.

36

RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE ANNUAL REPORT AND ACCOUNTS We confirm that to the best of our knowledge:

the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

the management report required by DTR 4.1.8R (contained in the Strategic Report and the Directors’ Report) includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

Brian Beamish Barrie van der Merwe Chairman Chief Financial Officer 13 November 2016

37

FINANCIAL STATEMENTS Consolidated income statement for the year ended 30 September

Notes

2016

Underlying i $m

Special items

(note 3) $m

2016 Total

$m

2015

Underlying i

$m

Special items

(note 3) $m

2015 Total

$m

Revenue 2 1,118 - 1,118 1,293 - 1,293

EBITDA / (LBITDA) ii 109 6 115 21 (73) (52) Depreciation, amortisation and impairment (102) (335) (437) (155) (1,811) (1,966)

Operating loss iii 7 (329) (322) (134) (1,884) (2,018) Profit on disposal of joint venture 3 - 5 5 - - - Finance income 4 23 32 55 16 20 36 Finance expenses 4 (28) (60) (88) (20) (255) (275) Share of loss of equity accounted investment (5) - (5) (5) - (5)

Loss before taxation (3) (352) (355) (143) (2,119) (2,262) Income tax (charge) / credit iv 5 (109) 64 (45) 35 328 363

Loss for the year (112) (288) (400) (108) (1,791) (1,899)

Attributable to:

- Equity shareholders of Lonmin Plc - Non-controlling interests

(89) (23)

(253) (35)

(342) (58)

(94) (14)

(1,567) (224)

(1,661) (238)

Loss per share 6 (137.0)c (3,437.6)c

Diluted loss per share v 6 (137.0)c (3,437.6)c

Consolidated statement of comprehensive income for the year ended 30 September

Note

2016 Total

$m

2015 Total

$m

Loss for the year (400) (1,899) Items that may be reclassified subsequently to the income statement:

- Change in fair value of available for sale financial assets 8 - (4)

- Foreign exchange loss on retranslation of equity accounted investment - (8)

- Deferred tax on items taken directly to the statement of comprehensive income (1) -

Total other comprehensive expenses for the year (1) (12)

Total comprehensive loss for the year (401) (1,911)

Attributable to: - Equity shareholders of Lonmin Plc - Non-controlling interests

(343) (58)

(1,672) (239)

(401) (1,911)

Footnotes: i Underlying results are based on reported results excluding the effect of special items as defined in note 3.

ii EBITDA / (LBITDA) is operating profit / (loss) before depreciation, amortisation and impairment of goodwill, intangibles and property, plant and equipment.

iii Operating profit / (loss) is defined as revenue less operating expenses before profit on disposal of joint venture, finance income and expenses and share of (loss) / profit of equity accounted investment.

iv The income tax (charge) / credit substantially relates to overseas taxation and includes exchange gains of $5 million (2015 – $48 million) as disclosed in note 5.

v Diluted (loss) / earnings per share is based on the weighted average number of ordinary shares in issue adjusted by dilutive outstanding share options.

38

Consolidated statement of financial position as at 30 September

Notes

2016 $m

2015 $m

Non-current assets Intangible assets 10 74 94 Property, plant and equipment 10 1,158 1,477 Equity accounted investment 24 26 Royalty prepayment 37 38 Other financial assets 8 21 19

1,314 1,654

Current assets Inventories 245 281 Trade and other receivables 67 71 Tax recoverable - 1 Other financial assets 8 69 102 Cash and cash equivalents 9 323 320

704 775

Current liabilities Trade and other payables (193) (208) Provisions - (39) Interest bearing loans and borrowings 9 - (505) Deferred revenue - (23)

(193) (775)

Net current assets 511 -

Non-current liabilities

Interest bearing loans and borrowings 9 (150) - Deferred tax liabilities (34) (9) Deferred royalty payment (3) (3) Deferred revenue (9) - Provisions (127) (122)

(323) (134)

Net assets 1,502 1,520

Capital and reserves

Share capital 586 586 Share premium 1,816 1,448 Other reserves 88 88 Accumulated loss (821) (493)

Attributable to equity shareholders of Lonmin Plc 1,669 1,629 Attributable to non-controlling interests (167) (109)

Total equity 1,502 1,520

The financial statements of Lonmin Plc, registered number 103002, were approved by the Board of Directors on 13 November 2016 and were signed on its behalf by:

Brian Beamish Chairman Barrie van der Merwe Chief Financial Officer

39

Consolidated statement of changes in equity for the year ended 30 September

Equity interest

Called up share

capital $m

Share premium account

$m

Other

reserves i $m

Accumu- lated lossii

$m

Total $m

Non-controlling interests iii

$m

Total

equity $m

At 1 October 2015 586 1,448 88 (493) 1,629 (109) 1,520

Loss for the year - - - (342) (342) (58) (400)

Total other comprehensive expenses: - - - (1) (1) - (1)

- Deferred tax on items taken directly to the statement of comprehensive income - - - (1) (1) - (1)

Transactions with owners, recognised directly in equity: - 368 - 15 383 - 383

- Share-based payments - - - 15 15 - 15 - Share capital and share premium recognised on equity issuance - 395 - - 395 - 395

- Equity issue costs charged to share premium - (27) - - (27) - (27)

At 30 September 2016 586 1,816 88 (821) 1,669 (167) 1,502

Equity interest

Called up share

capital $m

Share premium account

$m

Other

reserves i $m

Retained earnings/ (Accumu-

lated loss) ii

$m

Total $m

Non-controlling interests iii

$m

Total

equity $m

At 1 October 2014 570 1,411 88 1,164 3,233 149 3,382

Loss for the year - - - (1,661) (1,661) (238) (1,899)

Total other comprehensive expenses: - - - (11) (11) (1) (12)

- Change in fair value of available for sale financial assets - - - (4) (4) - (4)

- Foreign exchange loss on retranslation of equity accounted investment - - - (7) (7) (1) (8)

Transactions with owners, recognised directly in equity: 16 37 - 15 68 (19) 49

- Share-based payments - - - 15 15 - 15

- Shares issued on exercise of share options iv 3 - - - 3 - 3 - Share capital and share premium recognised on the BEE transaction 13 37 - - 50 - 50

- Dividends (note 7) - - - - - (19) (19)

At 30 September 2015 586 1,448 88 (493) 1,629 (109) 1,520

Footnotes:

i Other reserves at 30 September 2016 represent the capital redemption reserve of $88 million (2015 - $88 million).

ii (Accumulated loss) / retained earnings include a $17 million debit of accumulated exchange on retranslation of equity accounted investments (2015 - $17 million debit).

iii Non-controlling interests represent a 13.76% effective shareholding in each of Eastern Platinum Limited, Western Platinum Limited and Messina Limited and a 19.87% effective shareholding in Akanani Mining (Proprietary) Limited.

iv During the year 378,978 share options were exercised (2015 – 3,120,687) on which $38 of cash was received (2015 - $3 million).

40

Consolidated statement of cash flows for the year ended 30 September

Notes

2016 $m

2015 $m

Loss for the year (400) (1,899) Taxation 5 45 (363) Share of loss of equity accounted investment 5 5 Finance income 4 (55) (36) Finance expenses 4 88 275 Profit on disposal of joint venture (5) - Non-cash movement on deferred revenue (23) (27) Depreciation, amortisation and impairment 437 1,966 Change in inventories 36 92 Change in trade and other receivables (4) 6 Change in trade and other payables (15) (38) Change in provisions (51) 3 Deferred revenue received 9 - Share-based payments 15 15 Loss on disposal of property, plant and equipment - 3 BEE charge - 13

Cash inflow from operations 82 15 Interest received 6 3 Interest and bank fees paid (20) (27) Tax paid (10) (3)

Cash inflow / (outflow) from operating activities 58 (12)

Cash flow from investing activities Contributions to joint venture (3) (7) Proceeds on disposal of joint venture 5 - Purchase of property, plant and equipment (87) (134) Purchase of intangible assets (2) (2)

Cash used in investing activities (87) (143)

Cash flow from financing activities Dividends paid to non-controlling interests 7 - (19) Proceeds from current borrowings 9 - 391 Repayment of current borrowings 9 (506) (60) Proceeds from non-current borrowings 9 150 - Proceeds from equity issuance 395 - Costs of issuing shares (27) - Profit on forward exchange contracts on equity issuance 5 - Issue of other ordinary share capital - 3

Cash inflow from financing activities 17 315

(Decrease) / increase in cash and cash equivalents 9 (12) 160 Opening cash and cash equivalents 9 320 143 Effect of foreign exchange rate changes 9 15 17

Closing cash and cash equivalents 9 323 320

41

Notes to the accounts 1. Statement on accounting policies Basis of preparation The financial information presented has been prepared on the basis of International Financial Reporting Standards (IFRSs) as adopted by the EU. Going concern In determining the appropriate basis of preparation of the financial statements, the Directors are required to consider whether the Group can continue in operational existence for the foreseeable future. The debt facilities available to the Group are summarised as follows:

Revolving credit facilities totalling $71 million and a $150 million term loan, at a Lonmin Plc level.

Revolving credit facility totalling R1,980 million, at Western Platinum Limited (WPL) level. This capital structure places the Group in a strong financial position to ride the normal working capital cycles while providing a buffer to withstand the effects of operational shocks that the business may face. The financial performance of the Group is also dependent upon the wider economic environment in which the Group operates. Factors exist which are outside the control of management which can have a significant impact on the business, specifically, volatility in PGM commodity prices and the Rand / US Dollar exchange rate. In assessing the Group’s ability to continue as a going concern, the Directors have prepared cash flow forecasts for a period in excess of 12 months. Various scenarios have been considered to test the Group’s resilience against operational risks including:

Adverse movements in PGM commodity prices and Rand / US Dollar exchange rate or a combination thereof;

Failure to meet forecast production targets. The Directors have concluded that the Group’s capital structure provides sufficient headroom to cushion against downside operational risks and minimises the risk of breaching debt covenants. As a result, the Directors believe that the Group will continue to meet its obligations as they fall due and comply with its financial covenants and accordingly have formed a judgement that it is appropriate to prepare the financial statements on a going concern basis. Therefore, these financial statements do not include any adjustments that would result if the going concern basis of preparation is inappropriate. New standards and amendments in the year The following revised IFRSs have been adopted in these financial statements. The application of these IFRSs did not have any material impact on the amounts reported for the current and prior years:

Annual improvements to IFRSs 2010-2012 cycle and 2011-2013 cycle - amendments to IFRS 1, 2, 3, 8 and 13 and IAS 16, 24,38 and 40.

There were no other new standards, interpretations or amendments to standards issued and effective for the year which materially impacted the Group’s financial statements.

42

Notes to the accounts (continued) 2. Segmental analysis The Group distinguishes between three reportable operating segments being the Platinum Group Metals (PGM) Operations segment, the Evaluation segment and the Exploration segment. The PGM Operations segment comprises the activities involved in the mining and processing of PGMs, together with associated base metals, which are carried out entirely in South Africa. These operations are integrated and designed to support the process for extracting and refining PGMs from underground. PGMs move through each stage of the process and undergo successive levels of refinement which result in fully refined metals. The Chief Executive Officer, who performs the role of Chief Operating Decision Maker (CODM), views the PGM Operations segment as a single whole for the purposes of financial performance monitoring and assessment and does not make resource allocations based on margin, costs or cash flows incurred at each separate stage of the process. In addition, the CODM makes his decisions for running the business on a day to day basis using the physical operating statistics generated by the business as these summarise the operating performance of the entire segment. The Evaluation segment covers the evaluation through pre-feasibility of the economic viability of newly discovered PGM deposits. Currently all of the evaluation projects are based in South Africa. The Exploration segment covers the activities involved in the discovery or identification of new PGM deposits. This activity occurs on a worldwide basis. The Other segment covers mainly the results and investment activities of the corporate Head Office. The only intersegment transactions involve the provision of funding between segments and any associated interest. No operating segments have been aggregated. Operating segments have consistently adopted the consolidated basis of accounting and there are no differences in measurement applied.

2016

PGM Operations

Segment $m

Evaluation

Segment $m

Exploration

Segment $m

Other $m

Inter- segment

Adjustments $m

Total $m

Revenue (external sales by product): Platinum 720 - - - - 720 Palladium 197 - - - - 197 Gold 30 - - - - 30 Rhodium 82 - - - - 82 Ruthenium 5 - - - - 5 Iridium 25 - - - - 25

PGMs 1,059 - - - - 1,059 Nickel 28 - - - - 28 Copper 10 - - - - 10 Chrome 21 - - - - 21

1,118 - - - - 1,118

43

Notes to the accounts (continued)

2. Segmental analysis (continued)

2016

PGM Operations

Segment $m

Evaluation

Segment $m

Exploration Segment

$m

Other $m

Inter- segment

Adjustments $m

Total $m

Underlying i : EBITDA / (LBITDA) ii 119 - (5) (5) - 109 Depreciation, amortisation and impairment (102) - - - - (102)

Operating profit / (loss) ii 17 - (5) (5) - 7 Finance income 25 - - 49 (51) 23 Finance expenses (66) - - (13) 51 (28) Share of loss of equity accounted investment (5) - - - - (5)

(Loss) / profit before taxation (29) - (5) 31 - (3) Income tax charge (109) - - - - (109)

Underlying (loss) / profit after taxation (138) - (5) 31 - (112) Special items (note 3) iii (254) - 4 (38) - (288)

Loss after taxation (392) - (1) (7) - (400)

Total assets iv 1,936 9 7 1,796 (1,730) 2,018 Total liabilities (1,866) (136) (60) (184) 1,730 (516)

Net assets / (liabilities) 70 (127) (53) 1,612 - 1,502

Share of net assets of equity accounted investment 24 - - - - 24 Additions to property, plant, equipment and intangibles 96 2 - - - 98 Material non-cash items – share-based payments 15 - - - - 15

2015

PGM Operations

Segment $m

Evaluation

Segment $m

Exploration

Segment $m

Other $m

Inter- segment

Adjustments $m

Total $m

Revenue (external sales by product): Platinum 823 - - - - 823 Palladium 250 - - - - 250 Gold 29 - - - - 29 Rhodium 92 - - - - 92 Ruthenium 8 - - - - 8 Iridium 16 - - - - 16

PGMs 1,218 - - - - 1,218 Nickel 39 - - - - 39 Copper 12 - - - - 12 Chrome 24 - - - - 24

1,293 - - - - 1,293

44

Notes to the accounts (continued) 2. Segmental analysis (continued)

2015

PGM Operations

Segment $m

Evaluation

Segment $m

Exploration

Segment $m

Other $m

Inter- segment

Adjustments $m

Total $m

Underlying i: EBITDA / (LBITDA) ii 40 7 (5) (21) - 21 Depreciation, amortisation and impairment (155) - - - - (155)

Operating (loss) / profit ii (115) 7 (5) (21) - (134) Finance income 17 - - 13 (14) 16 Finance expenses (48) - - 14 14 (20) Share of loss of equity accounted investment (5) - - - - (5)

(Loss) / profit before taxation (151) 7 (5) 6 - (143) Income tax credit 34 - - 1 - 35

Underlying (loss) / profit after taxation (117) 7 (5) 7 - (108) Special items after tax (note 3) iii (1,380) (173) - (238) - (1,791)

Loss after taxation (1,497) (166) (5) (231) - (1,899)

Total assets iv 2,117 60 3 1,724 (1,475) 2,429 Total liabilities (1,800) (134) (56) (394) 1,475 (909)

Net assets / (liabilities) 317 (74) (53) 1,330 - 1,520

Share of net assets of equity accounted investment 26 - - - - 26 Additions to property, plant, equipment and intangibles 159 2 - - - 161 Material non-cash items – share-based payments 14 - - 1 - 15

45

Notes to the accounts (continued) 2. Segmental analysis (continued)

Revenue by destination is analysed by geographical area below:

2016

$m 2015

$m

The Americas 508 260 Asia 215 240 Europe 338 559 South Africa 57 234

1,118 1,293

The Group's revenue is all derived from the PGM Operations segment. This segment has three major customers who respectively contributed 41% ($455 million), 19% ($211 million) and 19% ($209 million) of revenue in the 2016 financial year (2015 - 58% ($505 million), 16% ($204 million) and 9% ($117 million)). Metal sales prices are based on market prices which are denominated in US Dollars. The majority of sales are also invoiced in US Dollars with the exception of certain sales in South Africa which are invoiced in South African Rand based on exchange rates determined in accordance with the contractual arrangements. Non-current assets (excluding financial instruments and deferred tax assets) of $1,291 million (2015 - $1,635 million) are all situated in South Africa.

Footnotes:

i Underlying results are based on reported results excluding the effect of special items as defined in note 3.

ii EBITDA / (LBITDA) and operating profit / (loss) are the key profit measures used by management.

iii The impairment of the HDSA receivable of $nil (2015 - $227 million) and of non-financial assets of $335 million (2015 - $1,811 million) are shown as special items in the segmental analysis. The HDSA receivable forms part of the “Other” segment. The impairment of non-financial assets is allocated to the PGM Operations segment.

iv The assets under "Other" include the HDSA receivable of $69 million (2015 - $102 million) and intercompany receivables of $1,658 million (2015 - $1,475 million). Available for sale financial assets of $7 million (2015 - $7 million) forms part of the "Other" segment and the balance of $4 million (2015 - $4 million) forms part of the PGM Operations segment.

46

Notes to the accounts (continued) 3. Special Items ‘Special items’ are those items of financial performance that the Group believes should be separately disclosed on the face of the income statement to assist in the understanding of the financial performance achieved by the Group and for consistency with prior years.

2016 $m

2015 $m

Operating loss: (329) (1,884)

Restructuring and reorganisation costs i 21 (59) Debt refinancing costs ii (10) - Share-based payments iii (5) - Impairment of non-financial assets - Impairment of goodwill - (40) - Impairment of intangibles (19) (358) - Impairment of property, plant and equipment (316) (1,413) BEE transaction - BEE charge - (13) - Consulting fees - (1)

Profit on disposal of joint venture iv 5 - Net finance expenses: (28) (235)

- Interest accrued from HDSA receivable v 27 20 - Foreign exchange loss on HDSA receivable v (60) (28) - Impairment of HDSA loan receivable v - (227) - Gain on retranslation and forward exchange contracts in respect of the Rights Issue 5 -

Loss on special items before taxation (352) (2,119) Taxation related to special items (note 5) 64 328

Special loss before non-controlling interests (288) (1,791) Non-controlling interests 35 224

Special loss for the year attributable to equity shareholders of Lonmin Plc (253) (1,567)

Footnotes:

i The planned restructuring of the business was achieved at a lower cost due the reskilling and redeployment of employees combined with a greater proportion of contractors departing as well as natural attrition. This resulted in the reversal of the remainder of the provision for redundancy costs.

ii Costs were incurred to amend the debt facilities with the lenders.

iii The employee share option schemes were adjusted to reflect the Rights Issue and share consolidation. This resulted in the accelerated vesting of the share-based payment expenses per IFRS2. These accelerated share-based payment costs were treated as special costs.

iv In 2016 the Group sold its percentage interest in a joint venture between subsidiary AfriOre Kenya Limited and Acacia Mining Plc generating a profit of $5 million.

v During the year ended 30 September 2010 the Group provided financing to assist Lexshell 806 Investments (Proprietary) Limited, a subsidiary of Phembani Group (Proprietary) Limited (Phembani, formerly known as Pembani) to acquire a majority shareholding in Incwala, Lonmin’s Black Economic Empowerment partner. This financing gave rise to foreign exchange movements and the accrual of interest. See note 8 for details regarding the HDSA receivable.

47

Notes to the accounts (continued) 4. Net finance expenses

2016 $m

2015 $m

Finance income: 23 16

- Interest receivable on cash and cash equivalents 7 3 - Dividend received from investment i 1 1 - Foreign exchange gains on net cash / (debt) ii 15 12

Finance expenses: (28) (20)

- Interest payable on bank loans and overdrafts (14) (20) - Bank fees (4) (8) - Unamortised bank fees realised on settlement of old loan facility (1) - - Capitalised interest iii 1 19 - Unwinding of discount on provisions (9) (10) - Other finance expenses (1) (1)

Special items (note 3): (28) (235)

- Interest accrued from HDSA receivable (note 8) 27 20 - Foreign exchange loss on HDSA receivable (note 8) (60) (28) - Impairment of HDSA receivable (note 8) - (227) - Gain on retranslation and forward exchange contracts in respect of the Rights Issue 5 -

Net finance expenses (33) (239)

Footnotes:

i Dividends received relate to dividends accruing from investment in Petrozim Line (Private) Limited. The investment in Petrozim Line (Private) Limited has a $nil carrying value as it has been fully impaired.

ii Net cash / (debt) as defined by the Group comprises cash and cash equivalents, bank overdrafts repayable on demand and interest bearing loans and borrowings less

unamortised bank fees, unless the unamortised bank fees relate to undrawn facilities in which case they are treated as other receivables.

iii Interest expenses incurred have been capitalised on a Group basis to the extent that there is an appropriate qualifying asset. The weighted average interest rate used by the Group for capitalisation is 4.0% (2015 – 3.8%).

48

Notes to the accounts (continued)

5. Taxation

2016 $m

2015 $m

Current tax charge (excluding special items): United Kingdom tax expense - -

Current tax expense at 21% (2015 – 20.5%) i - - Less amount of the benefit arising from double tax relief available - -

Overseas current tax expense at 28% (2015 – 28%) 19 4

Corporate tax expense – current year 8 4 Adjustment in respect of prior years 11 -

Total current tax charge 19 4

Deferred tax charge / (credit) (excluding special items): Deferred tax expense - UK and overseas 90 (39)

Origination and reversal of temporary differences 72 (39) Adjustment in respect of prior years 18 -

Deferred tax credit on special items – UK and overseas (note 3): (64) (328)

Foreign exchange revaluation on deferred tax ii (5) (48) Deferred tax on special items impacting profit before tax (59) (280)

Total deferred tax charge / (credit) 26 (367)

Total tax charge / (credit) 45 (363)

Tax charge / (credit) excluding special items (note 3) 109 (35)

Effective tax rate (13)% 16%

Effective tax rate excluding special items (note 3) (3,633)% 24%

A reconciliation of the standard tax credit to the actual tax charge / (credit) was as follows:

2016 2016 2015 2015

% $m % $m

Tax credit on loss at standard tax rate 28 (99) 28 (626) Tax effect of: - Unutilised losses iii (18) 65 (1) 27 - Foreign exchange impacts on taxable profitsii (10) 34 2 (37) - Adjustment in respect of prior years (8) 29 - - - Disallowed expenditure (6) 23 (15) 316 - (Income) / expenses not subject to tax - (2) - 5 Foreign exchange revaluation on deferred taxii 1 (5) 2 (48)

Actual tax charge / (credit) (13) 45 16 (363)

The Group's primary operations are based in South Africa. The South African statutory tax rate is 28% (2015 - 28%). Lonmin Plc operates a branch in South Africa which is also subject to a tax rate of 28% on branch profits (2015 - 28%). The aggregated standard tax rate for the Group is 28% (2015 - 28%). The dividend withholding tax rate is 15% (2015 - 15%). Dividends payable by the South African companies to Lonmin Plc are subject to a 5% withholding tax benefitting from double taxation agreements.

Footnotes:

i In the 2015 Summer Budget the Chancellor announced a reduction in the UK corporation tax rate from 20% to 19% (effective from 1 April 2017) and 18% (effective from 1 April 2020) and these rates were substantively enacted on 26 October 2015. In the 2016 Budget the Chancellor announced a further reduction in the UK corporation tax rate to 17% from 1 April 2020. This does not materially impact the Group's recognised deferred tax liabilities.

ii Overseas tax charges are predominantly calculated based in Rand as required by the local authorities. As these subsidiaries’ functional currency is US Dollar this leads to a variety of foreign exchange impacts being the retranslation of current and deferred tax balances and monetary assets, as well as other translation differences. The Rand denominated deferred tax balance in US Dollars at 30 September 2016 is $62 million (30 September 2015 - $177 million).

iii Unutilised losses reflect losses generated in entities for which no deferred tax is provided as it is not thought probable that future profits can be generated against which a deferred tax asset could be offset or previously unrecognised losses utilised.

49

Notes to the accounts (continued)

6. Loss per share

Loss per share (LPS) has been calculated on the loss attributable to equity shareholders amounting to $342 million (2015 –$1,661 million) using a weighted average number of 249,656,150 ordinary shares in issue (2015 – 48,319,119 ordinary shares). During November 2015 the Group undertook a capital raising by way of a Rights Issue. As a result the LPS figures have been adjusted retrospectively as required by IAS 33 – Earnings Per Share. On 20 November 2015, 26,997,717,400 ordinary shares were issued with 46 new ordinary shares issued for every existing ordinary share held. For the calculation of the LPS, the number of shares held prior to 20 November 2015 has been adjusted by a factor of 0.08 to reflect the bonus element on the Rights Issue. Diluted loss per share is based on the weighted average number of ordinary shares in issue adjusted by dilutive outstanding share options in accordance with IAS 33 - Earnings Per Share. As at 30 September 2016 outstanding share options were anti-dilutive and so were excluded from diluted loss per share.

2016 2015 (restated)

Loss for the year

$m

Number of

shares

Per share amount

cents

Loss for the year

$m

Number of

shares

Per share amount

cents

Basic LPS (342) 249,656,150 (137.0) (1,661) 48,319,119 (3,437.6) Share option schemes - - - - - -

Diluted LPS (342) 249,656,150 (137.0) (1,661) 48,319,119 (3,437.6)

2016 2015 (restated)

Loss for the year

$m

Number of

shares

Per share amount

cents

Loss for the year

$m

Number of

shares

Per share amount

cents

Underlying LPS (89) 249,656,150 (35.6) (94) 48,319,119 (194.5) Share option schemes - - - - - -

Diluted Underlying LPS (89) 249,656,150 (35.6) (94) 48,319,119 (194.5)

Underlying loss per share has been presented as the Directors consider it important to present the underlying results of the business. Underlying loss per share is based on the loss attributable to equity shareholders adjusted to exclude special items (as defined in note 3) as follows:

2016 2015 (restated)

Loss for the year

$m

Number of

shares

Per share amount

cents

Loss for the year

$m

Number of

shares

Per share amount

cents

Basic LPS (342) 249,656,150 (137.0) (1,661) 48,319,119 (3,437.6) Special items (note 3) 253 - 101.4 1,567 - 3,243.0

Underlying LPS (89) 249,656,150 (35.6) (94) 48,319,119 (194.6)

Headline loss and the resultant headline loss per share are specific disclosures defined and required by the Johannesburg Stock Exchange. These are calculated as follows:

2016 $m

2015 $m

Loss attributable to ordinary shareholders (IAS 33 earnings) (342) (1,661) Add back loss on disposal of property, plant and equipment - 3 Add back profit on disposal of joint venture (note 3) (5) - Add back impairment of assets (note 3) 335 1,811 Tax related to the above items (65) (261) Non-controlling interests (37) (224)

Headline loss (113) (332)

2016 2015 (restated)

Loss for the year $m

Number of

shares

Per share amount

cents Loss for

the year $m

Number of

shares

Per share amount

cents

Headline LPS (113) 249,656,150 (45.3) (332) 48,319,119 (687.1)

Share option schemes - - - - - -

Diluted Headline LPS (113) 249,656,150 (45.3) (332) 48,319,119 (687.1)

50

Notes to the accounts (continued) 7. Dividends

No dividends were declared by Lonmin Plc for the financial years ended 30 September 2016 and 2015. No advance dividends were made by WPL, a subsidiary of Lonmin Plc, to Incwala Platinum (Proprietary) Limited (IP) during the year (2015 - $19 million (R228 million)). IP is a substantial shareholder in the Company’s principal operating subsidiaries. Total advance dividends made between 2009 and 2016 amount to $135 million (R1,309 million). IP has authorised WPL to recover these amounts by reducing future dividends that would otherwise be payable to all shareholders. These advance dividends are adjusted for in the non-controlling interest of the Group.

8. Other financial assets

Restricted cash

Available for sale

HDSA receivable Total

$m $m $m $m

At 1 October 2015 8 11 102 121

Interest accrued 2 - 27 29

Foreign exchange losses - - (60) (60)

At 30 September 2016 10 11 69 90

Restricted

cash Available

for sale HDSA

receivable Total

$m $m $m $m

At 1 October 2014 12 15 337 364

Interest accrued 1 - 20 21

Movement in fair value - (4) - (4)

Foreign exchange losses (5) - (28) (33)

Impairment loss - - (227) (227)

At 30 September 2015 8 11 102 121

2016 $m

2015 $m

Current assets

Other financial assets 69 102

Non-current assets

Other financial assets 21 19

Restricted cash deposits are in respect of mine rehabilitation obligations. Available for sale financial assets include listed investments of $7 million (2015 - $7 million) held at fair value using the market price on 30 September 2016. On 8 July 2010, Lonmin entered into an agreement to provide financing of £200 million to Lexshell 806 Investments (Proprietary) Limited, a subsidiary of Phembani Group (Proprietary) Limited, to facilitate the acquisition, at fair value, of 50.03% of shares in Incwala Resources (Proprietary) Limited from the original HDSA shareholders. The terms of the financing provided by Lonmin Plc to the Phembani subsidiary include the accrual of interest on the HDSA receivable at a fixed rate based on a principal value of £200 million which is repayable on demand, including accrued interest. The Company holds the HDSA receivable at amortised cost. The receivable is secured on shares in the HDSA borrower, Lexshell 806 Investments (Proprietary) Limited, whose only asset of value is its holding in Incwala Resources (Proprietary) Limited (Incwala). Incwala’s principal assets are investments in WPL, EPL and Akanani Mining (Proprietary) Limited (Akanani), all subsidiaries of Lonmin Plc. One of the sources of income to fund the settlement of the receivable is the dividend flow from these underlying investments. Given the continued subdued PGM pricing environment, there have not been any substantial dividends declared by these Lonmin subsidiaries in recent years.

51

Notes to the accounts (continued)

8. Other financial assets (continued)

An impairment review was performed on the balance of the loan at 30 September 2016. This assessment has been made based on the value of the security, which is primarily driven by the value of Incwala’s underlying investments in WPL, EPL and Akanani. The same valuation model for the Marikana CGU that was prepared to assess impairment of non-financial assets was used as the basis for determining the value of Incwala’s investments. Thus, similar judgements apply around the determination of key assumptions in those valuation models. Based on the assessment there was no impairment to the carrying value of this loan as at 30 September 2016 (2015 - impairment of $227 million). Any movements in the key assumptions would affect the value of the security which would lead to further impairment or reversal of a previous impairment of the receivable as follows:

Reversal of impairment /

Assumption Movement in assumption (further impairment) of receivable

Metal prices +/-5% $36m/($26m)

ZAR:USD exchange rate -/+5% $29m/($21m)

Discount rate -/+ 100 basis points $18m/($6m)

Production +/-5% $33m/($23m)

9. Net cash / (debt) as defined by the Group

As at

1 October 2015

$m

Cash flow

$m

Foreign exchange and

non-cash movements

$m

Transfer of unamortised bank fees to

other receivables

$m

As at 30 September

2016 $m

Cash and cash equivalents ii 320 (12) 15 - 323

Current borrowings (506) 506 - - -

Non-current borrowings - (150) - - (150)

Unamortised bank fees iii 1 - - (1) -

Net (debt) / cash as defined by the Group i (185) 344 15

(1) 173

As at

1 October 2014

$m

Cash flow $m

Foreign exchange and

non-cash movements

$m

Transfer of unamortised bank

fees to other receivables

$m

As at 30 September

2015 $m

Cash and cash equivalents ii 143 160 17 - 320

Current borrowings (87) (331) (88) - (506)

Non-current borrowings (88) - 88 - -

Unamortised bank fees iii 3 - (2) - 1

Net debt as defined by the Group i (29) (171) 15

- (185) Footnotes:

i Net cash / (debt) as defined by the Group comprises cash and cash equivalents, bank overdrafts repayable on demand and interest bearing loans and borrowings less unamortised bank fees, unless the unamortised bank fees relate to undrawn facilities in which case they are treated as other receivables.

ii Current cash and cash equivalents to the value of $6 million will be treated as restricted cash to be utilised for rehabilitation obligations (2015 - $6 million).

ii As at 30 September 2016 unamortised bank fees of $4 million relating to undrawn facilities were included in other receivables (2015 - $1 million of unamortised bank fees relating to drawn facilities were offset against net debt).

52

Notes to the Accounts (continued)

10. Impairment of non-financial assets

At each financial reporting date, the Group assesses whether there is any indication that non-financial assets are impaired. If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of the impairment (if any). The recoverable amount is the higher of fair value less costs to sell and value in use. For impairment assessment, the Group’s net assets are grouped into CGUs being the Marikana CGU, Akanani CGU, Limpopo CGU and Other. The Marikana and Limpopo CGUs relate to the PGM segment and the Akanani CGU relates to the Evaluation segment. The Marikana CGU is located in the Marikana district to the east of the town of Rustenburg in the North West province of South Africa. It contains a number of producing underground mines, various development properties, concentrators, tailings storage facilities and smelting and refining operations. The Akanani CGU is an evaluation asset and is located on the Northern Limb of the Bushveld Igneous Complex in the Limpopo province of South Africa. A pre-feasibility study was completed in 2012. The Limpopo CGU is located on the Northern Sector of the Eastern Limb of the Bushveld Igneous Complex in the Limpopo province of South Africa and comprises two resource blocks (Baobab and Baobab east). The CGU includes mines which were placed on care and maintenance in 2009 and a concentrator complex. For Marikana and Akanani, the recoverable amounts were calculated using a value in use valuation. The key assumptions contained within the business forecasts and management’s approach to determine appropriate values in use are set out below:

Key Assumption Management Approach

PGM prices Projections are determined through a combination of the views of the Directors, market estimates and forecasts and other sector information. The Platinum price is projected to be in the range of $1,063 to $1,536 per ounce in real terms over the life of the mine. Palladium and Rhodium prices are expected to range between $600 to $842 and $764 to $1,251 respectively per ounce in real terms over the same period.

Production volume Projections are based on the capacity and expected operational capabilities of the mines, the grade

of the ore and the efficiencies of processing and refining operations. Production costs Projections are based on current cost adjusted for expected cost changes as well as giving

consideration to specific issues such as the difficulty in mining particular sections of the reef and the mining method employed.

Capital expenditure requirements Projections are based on the operational plan, which sets out the long-term plan of the business and

is approved by the Board, and includes capital expenditure to access reported reserves from existing mining operations as well as maintenance expenditure.

Foreign currency exchange rates

Spot rates as at the end of the reporting period are applied.

Reserves and resources of the CGU

Projections are determined through surveys performed by Competent Persons and the views of the Directors of the Company.

Discount rate The discount rate is based on a Weighted Average Cost of Capital (WACC) calculation using the

Capital Asset Pricing Model grossed up to a pre-tax rate. The Group uses external consultants to calculate an appropriate WACC.

For impairment testing, management projects cash flows over the life of the relevant mining operation which is significantly greater than

five years. For the Marikana CGU a life of mine spanning until 2062 was applied. Whilst the majority of mining licenses are currently valid until 2037 the Director’s expect the licenses will be renewed until beyond 2062. For the Akanani CGU the life of mine spans until 2056.

The risk-adjusted pre-tax discount rate applied for impairment testing of the Marikana CGU for 2016 was 15.6% real (2015 – 15.6% real). The Akanani asset was fully impaired at 30 September 2015. There have been no significant changes since that date to lead us to believe that the valuation of this asset is different. Therefore no full assessment has been performed at 30 September 2016 as we do not expect a reversal of impairment at this stage. The non-financial assets of the Limpopo CGU were also fully impaired at 30 September 2015.

53

Notes to the Accounts (continued) 10. Impairment of non-financial assets (continued)

For the 2016 financial year, the Group’s non-financial assets were impaired by $335 million (2015 - $1,811 million) primarily due to the downward revision of the Rhodium price outlook and the strengthening of the Rand against the US Dollar since our interim results in March 2016. The impact of these external factors, despite good progress made in the year against the Business Plan, led to the value in use declining below the carrying amount of the non-financial assets of the operations. The impairment charge was allocated as follows:

2016 2015

$m $m $m $m $m

Marikana Marikana Akanani Limpopo

CGU CGU CGU CGU Total

Carrying amount pre-impairment:

Goodwill - 40 - - 40

Other intangibles 91 180 219 53 452

Property, plant and equipment 1,473 2,816 - 74 2,890

Equity accounted investment 24 26 - - 26

Royalty prepayment 37 38 - - 38

Total 1,625 3,100 219 127 3,446

Recoverable amount:

Goodwill - - - - -

Other intangibles 72 94 - - 94

Property, plant and equipment 1,157 1,477 - - 1,477

Equity accounted investment 24 26 - - 26

Royalty prepayment 37 38 - - 38

Total 1,290 1,635 - - 1,635

Impairment:

Goodwill - (40) - - (40)

Other intangibles (19) (86) (219) (53) (358)

Property, plant and equipment (316) (1,339) - (74) (1,413)

Equity accounted investment - - - - -

Royalty prepayment - - - - -

Total (335) (1,465) (219) (127) (1,811)

For the Marikana CGU, the impairment charge was allocated pro-rata to intangibles and property, plant and equipment, but limited to the assets’ recoverable amounts. In preparing the financial statements, management has considered whether a reasonably possible change in the key assumptions on which management has based its determination of the recoverable amounts of the CGUs would cause the units’ carrying amounts to exceed their recoverable amounts. A reasonably possible change in any of the assumptions used to value the Marikana CGU will lead to a reduction or increase in the impairment charge as follows:

Assumption

Movement in assumption

Reversal of impairment/(Further

impairment)

Metal prices +/-5% $345m/($346m)

ZAR:USD exchange rate -/+5% $267m/($293m)

Discount rate -/+100 basis points $140m/($122m)

Production +/-5% $309m/($313m)

54

Notes to the Accounts (continued) 11. Events after the financial reporting period As announced on 11 November 2016 the Group has into an agreement to acquire Anglo American Platinum’s (AAP) 42.5% of the Pandora Joint Venture which will increase the Group’s ownership of the asset to 92.5%. The consideration is a cash payment of 20% of the distributable free cash flows generated by the Pandora E3 operations on an annual basis for a period of six year, subject to a minimum deferred consideration of R400 million (nominal terms) which is the expected aggregate consideration. The Group has also entered into a 36 months rental agreement with Anglo American Platinum for the Baobab concentrator in the Limpopo, conditional upon the Transaction completing, whereby AAP will pay Lonmin a rental fee of at least R46 million per year. The acquisition allows Lonmin to consolidate its position in this relatively shallow and high-grade mineral resource providing an attractive option for development by EPL in both the short and longer term. The Pandora JV area is contiguous with our existing EPL operations, relies on Lonmin’s mining and processing infrastructure and is operated by EPL. The transaction remains subject to certain conditions precedent including approval by the competition authorities of the Republic of South Africa; and all necessary consents being obtained from the Department of Mineral Resources of South Africa, including section 11 approval for the transfer of the mining rights. The transaction is also subject to approval by Lonmin’s lending banks and remaining Pandora JV partner, Northam Limited. The transaction is expected to become unconditional during 2017 following the fulfilment of all conditions precedent.

12. Statutory Disclosure The financial information set out above does not constitute the Company’s statutory accounts for the years ended 30 September 2016 and 2015 but is derived from those accounts. Statutory accounts for 2015 have been delivered to the Registrar of Companies and those for 2016 will be delivered in due course. The auditors have reported on those accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.