IMP 201509030004A
Proposed Equity Capital Raising

Impala Platinum Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration No. 1957/001979/06)
JSE Share Code: IMP
ISIN: ZAE000083648
 ("Implats" or the "Company")



1. Introduction

    The shareholders of Implats (“Implats Shareholders”) are advised that Implats intends to raise
    up to ZAR4.0 billion through the sale of new Implats ordinary shares using an accelerated
    bookbuild process ("Specific Issue of Shares for Cash") subject to market conditions and the
    necessary shareholder approvals.
    In order to implement the Specific Issue of Shares for Cash, the approval of Implats Shareholders
    is required:
    •   to permit the Company to issue Implats ordinary shares for cash on a non-pre-emptive
    •   for certain qualifying shareholders to have the ability to participate in the Specific Issue of
        Shares for Cash; and
    •   for the approval of certain amendments to the Implats Memorandum of Incorporation
        (“MOI”) to cater for amongst other things the Specific Issue of Shares for Cash.
    The Specific Issue of Shares for Cash has been fully underwritten by UBS Limited (“Underwriter”)
    and support to vote in favour of the relevant resolutions at the Implats shareholders’ meeting
    has been received from a number of its shareholders, who in aggregate currently own
    approximately 49% of the issued share capital of the Company, including, Coronation Fund
    Managers Limited ("Coronation"), Royal Bafokeng Holdings Proprietary Limited ("RBH") and
    Public Investment Corporation (SOC) Limited ("PIC"). Furthermore, Allan Gray, in its capacity as
    investment manager, has irrevocably committed to recommend to its clients to vote in favour of
    the resolutions for all Implats shares beneficially held by its clients as at the date of the general
    meeting to approve the resolutions. Its clients, and not Allan Gray, are the beneficial owners of
    2.6% of the issued share capital of Implats.

2. Specific Issue of Shares for Cash

    2.1. Specific Issue of Shares for Cash

         Subject to market conditions and the necessary shareholder approvals, it is the intention of
         Implats to offer new Implats ordinary shares ("Subscription Shares") to qualifying investors
         in order to raise up to ZAR 4.0 billion.
    Qualifying investors can submit their price and volume orders into a book of demand and a
    single clearing price, being the subscription payable in respect of each of the Subscription
    Shares ("Subscription Price"), will be established (the “accelerated bookbuild process”).

    Qualifying investors in the Specific Issue of Shares for Cash will pay the Subscription Price.

2.2. Terms and conditions of the Specific Issue of Shares for Cash

    Subject to the fulfilment of certain conditions precedent, a maximum number of 171 895
    144 Implats ordinary shares will specifically be issued for cash to qualifying investors at the
    Subscription Price to raise ZAR4.0 billion. To the extent that the Subscription Shares are not
    fully utilised in the placement of the Subscription Shares to Qualifying Investors at the
    Subscription Price via the accelerated bookbuild process (“Bookbuild Placement”), the
    remainder of the Subscription Shares will, subject to the underwriting obligations of the
    Underwriter, revert back to Implats’ authorised but unissued share capital and will be used
    for no other purpose.

    Given the Subscription Price will be determined by the accelerated bookbuild process,
    subject to the underwriting arrangements concluded with the Underwriter, there is no
    maximum discount at which the Subscription Shares will be issued.

    The Subscription Shares to be issued are of a class of securities already in issue and will rank
    equally in every respect with the existing Implats ordinary shares in issue.

    The proposed Specific Issue of Shares for Cash is subject to paragraph 5.51 of the Listings
    Requirements which provides that the Specific Issue of Shares for Cash must be approved
    by a 75% majority of Implats Shareholders present and voting at the general meeting at
    which the proposed Specific Issue of Shares for Cash will be considered and voted on.

2.3. Related parties

    RBH, Coronation and PIC are material shareholders of Implats and therefore related parties
    in terms of the JSE Listings Requirements.

    The participation of each of RBH, Coronation and PIC in the Bookbuild Placement is subject
    to the approval by Implats Shareholders by way of separate inter-conditional resolutions,
    each requiring a 75% majority approval from those present and voting at the shareholders’
    meeting, excluding the votes of the relevant related parties and their associates.

2.4 Underwriting

    Implats has entered into an underwriting agreement with the Underwriter who has agreed
    to procure investors for, or, failing which, to subscribe and pay for all the Subscription
    Shares. The obligations of the Underwriter are subject to customary conditions and
    termination events of a transaction of this nature (“Underwriting Agreement”).
   2.5 Shareholder support

       Implats Shareholders who in aggregate currently own approximately 49% of the issued share
       capital of the Company, including, Coronation, RBH and PIC, have agreed in respect of the
       shares they currently own and any Implats ordinary shares that they may acquire prior to
       the general meeting, to support the proposed resolutions (excluding the relevant resolution
       they are not entitled to vote on, if applicable) that are contained in the notice of general
       meeting included in the Circular.

       Furthermore, Allan Gray, in its capacity as investment manager, has irrevocably committed
       to recommend to its clients to vote in favour of the resolutions for all Implats shares
       beneficially held by its clients as at the date of the general meeting to approve the
       resolutions. Its clients, and not Allan Gray, are the beneficial owners of 2.6% of the issued
       share capital of Implats.

   2.6 Conditions Precedent to and approvals for the Specific Issue of Shares for Cash

       The Specific Issue of Shares for Cash is subject to the fulfilment of the following conditions

       •   Implats Shareholders passing a special resolution to approve the amendments to the
           MOI, which amendments include amendments to cater for the Specific Issue of Shares
           for Cash;
       •   Implats Shareholders passing an ordinary resolution by a 75% majority of those present
           and voting at the meeting giving authority in terms of paragraph 5.51(g) of the Listings
           Requirements to allot and issue the Subscription Shares;
       •   Implats Shareholders passing the relevant ordinary resolutions providing specific
           authorities for RBH, Coronation and PIC, as Related Parties, to be able to participate in
           the Specific Issue of Shares for Cash; and
       •   the Underwriting Agreement becoming unconditional in accordance with its terms.

3. Strategy and use of proceeds


     Alongside all major commodities Platinum Group Metals (“PGM”) prices have been adversely
     impacted by a number of factors, including the abrupt slowdown of Chinese economic growth.
     The recent sharp decline in PGM prices has compounded the impact of the prolonged strike in
     2014, which significantly impacted productivity and had a material, negative effect on the
     overall financial position of the Company and its subsidiaries (the “Group”). Implats is
     therefore taking decisive action. Implats had budgeted to reduce operating costs by R930
     million, with a capital expenditure target of R5.5 billion in its 2016 financial year budget cycle.
     In response to the rapid reduction in PGM prices since June 2015 the intention is now to
     reduce the 2016 operating cost budget by a further R640 million (giving a total operating cost
     reduction in 2016 of R1.57 billion) and the capital expenditure budget by R1.3 billion.

     There will also be accelerated implementation of certain aspects of the strategy announced in
     early 2015. Due to the low PGM prices and a lack of profitability Implats intends to close 8
     shaft and 12 shaft’s mechanised operations by December 2015. As a result of the revised
     capital schedule and envisaged closures Implats is expecting to reduce production by
approximately 180,000 ounces over the next five years. This includes 145,000 ounces from 8
shaft and 12 shaft’s mechanised operations that would not be profitable in the current price

It is important to take swift and robust action to manage the business in line with the price
environment, but Implats continues to believe that the market fundamentals for PGMs remain
attractive over the longer term. There is limited incremental PGM supply anticipated beyond
increased recycling of above ground stocks whilst demand is well positioned to benefit from
the recovery of the global economy. Increased uptake is expected from higher catalytic
converter usage with a combination of higher vehicle demand and more stringent emission
standards as well as the evolution of the Chinese economy increasing demand for jewellery
and other industrial uses of platinum. In line with current market consensus forecasts, Implats
therefore expects PGM prices to improve over time.

Implats is therefore focused on an action plan that enhances its ability to operate profitably in
the current lower price environment whilst trying to ensure that short term actions do not
materially prejudice the long term value of the Group.

3.1       Strategy:

          Implats’ key strategic focus areas remain consistent with the outcome of the
          strategic review announced in early 2015, but the relevant action plans have been
          re-assessed in light of the current price environment. The key strategic pillars

          •       Maintaining prudent investment through the cycle;

          •       Maintaining strategic optionality and positioning the Group for the future;

          •       Improving efficiencies/profitability through operational excellence and safe

          •       Conserving cash, especially while metal prices remain depressed; and

          •       Maintaining Implats’ social licence to operate.

3.1.1     Prudent investment through the cycle

          Implats believes that long-term sustainable stakeholder value can be achieved in the
          PGM industry through prudent capital investment through the cycle given limited
          mineral reserves, long project time lines and high capital intensity.

          Following the prolonged 2014 strike and in light of the acute decline in PGM prices,
          the parameters and balance of short and long term demands have been re-
          evaluated. The principal focus is now being placed on cash preservation and
          profitability in a lower price environment. On that basis, the latest 2016 capital
          budget is being reduced by R1.3 billion to R4.2 billion.
        It nevertheless remains a priority for Implats to complete key capital projects that
        are expected to be value enhancing in the context of the current price outlook and
        are also important to the long term value of the Group. The intention is therefore to
        complete the development of 16 and 20 shafts, which require a rescheduled capital
        and development expenditure budget of R3.9 billion across both shafts over the
        next three years. In light of the price environment, however, development at 17
        shaft will be curtailed with capital expenditure reduced by R235 million in 2016.
        Outside of these main projects, capital expenditure at the Impala Platinum Limited
        (“Impala”) mining operation located to the north of Rustenburg on the western limb
        of the Bushveld Complex (the “Impala Lease Area”), will be reduced by
        approximately R175 million. Capital expenditure for the Impala Lease Area is
        planned to be R2.8 billion, which includes R1.1 billion for off-reef development
        expenditure. Elsewhere across the Group, capital expenditure will be cut by
        approximately R45 million at Marula, US$50 million at Zimplats and US$13 million at

3.1.2   Maintaining strategic optionality

        Impala Lease Area

        Consistent with the outcome of the strategic review announced earlier in 2015 it is
        critical that the Impala Lease Area be transformed. The intention is to create a more
        concentrated mining operation with access to new, modern shaft complexes making
        better use of the invested fixed cost base, with higher mining efficiencies and lower
        unit cost.

        The old shafts (E/F, 4, 6, 7, 7A, 8 and 9 shafts) have therefore been consolidated to
        optimise costs and realise synergies. These shafts are among the lowest-cost
        operations at the Impala Lease Area due to their relatively shallow mining depth and
        low capital requirements and will be mined as quickly as possible. In the current
        price environment, both 8 shaft as well as the mechanised operations at 12 shaft are
        most at risk and the intention is to close them by December 2015.

        There will be some capital rescheduling at 16 and 20 shafts but completion will be
        prioritised in order to replace the declining output from other shafts with cost
        effective production and to make efficient use of Impala’s infrastructure. The mid-
        life shafts (1, 10, 11, 12 and 14 shafts) are becoming more reliant on UG2 reef and
        require increased mineable face length to improve mining flexibility and efficiencies
        to optimise half-level and shaft capacities. The 16 and 20 shaft complexes provide
        access to significant new concentrated ore from the Merensky Reef to offset the
        increase in UG2 and this is expected to allow Impala to attain a mix of 50% ore from
        the Merensky Reef to UG2 ore, which is important for efficient smelter operation.

        Given the revised capital schedule and envisaged shaft closures, expected
        production will be reduced by approximately 180,000 platinum ounces over the next
        five years. On this basis production from the Impala Lease Area is expected to be
between 815 000 and 830,000 platinum ounces by 2020, rather than the previous
guidance of 850,000 platinum ounces by 2019.

At 17 shaft the focus is now on cash preservation and planned capital expenditure
has been reduced by R1.5 billion to R520 million over the next two years. The future
development schedule will be kept under review, but at this reduced level of
spending Implats will retain the flexibility to bring 17 shaft production on stream
from 2021. This represents an eighteen month delay from the previous plan
announced in February 2015 and requires capital expenditure of approximately R8
billion from 2018 to 2020.

Marula Platinum Proprietary Limited (“Marula”)

Marula is a relatively new, shallow, long-life ore body with good infrastructure.
Implats took a strategic decision in 2015 to explore the sale of Marula to realise
value in the near term. However, the sale process was terminated in May 2015 as it
became clear that shareholder value would be better served through strategic
interventions in order to improve performance. It is expected that Marula will be
cash neutral in the current PGM price environment.


Mining flexibility at Zimplats Platinum Mines (Private) Limited (“Zimplats”) has been
restored and Zimplats aims to produce 260,000 platinum ounces per annum in 2016.
This is being achieved by re-deploying production crews from Zimplats’ Bimha mine
to other portals and enhancing production from opencast operations whilst the
Bimha mine is redeveloped, which is on track for completion by 2018.

Constructive discussions with the Government of Zimbabwe continue with regard to
the implementation of its indigenization policy and a two year deferral of the 15%
export levy on unbeneficiated platinum has been announced.

Afplats Proprietary Limited (“Afplats”)

Afplats remains a quality resource with significant potential to develop a low-cost
mechanised mine in the well-serviced western Bushveld Complex. Moreover,
significant synergies can be realised through the use of Impala’s above-ground
infrastructure. However, the project requires significant capital investment, and
Implats has resolved to defer the project for four years while other projects are

Toll refining business

The Group has capacity available in Impala Refining Services Limited (“IRS’’) that
enables it to benefit from new opportunities and diversify its production exposure.
Implats intends to continue to be a leading player in this area.
3.1.3   Operational excellence

        As part of the strategic review process announced in early 2015 there was a bottom-
        up reassessment of operations that resulted in proposed interventions at each
        operation with specifically targeted measures to improve mining efficiencies and
        reduce operating costs. These measures included new initiatives around safety;
        introduction of new technology and a set of targeted short-cycle management
        controls to measure, report on and ultimately manage all critical mining parameters
        at individual team level. This followed a systematic survey to identify productivity on
        a team-by-team basis with underperforming teams identified and a specific action
        plan and monitoring process implemented alongside measures to increase ore
        reserve flexibility and improve the quality of mining. As a result of these initiatives
        costs for the 2016 financial year were reduced by approximately R930 million in the
        2016 budget.

        In light of the price environment a number of further initiatives are being
        implemented to reduce operating costs across the Group in the 2016 financial year
        including a reduction of head office and central costs; rescheduling development
        expenditure; re-assessment and rescheduling of major contracts; revised support
        strategies; reduction of remuneration expenditure and revised management of
        ammonium sulphate stocks. It is therefore intended to reduce 2016 budgeted
        operating costs by approximately R640 million including R400 million at Impala; R20
        million at Marula and US$18 million at Zimplats.

3.1.4   Cash conservation and balance sheet flexibility

        As outlined above the capital expenditure budget has been revised to focus on cash
        preservation alongside a wide range of operating cost initiatives. Financial flexibility
        has also been improved with advanced discussions to extend the period of certain of
        the available credit facilities and to increase the overall amount available from R3.0
        billion to R3.5 billion.

3.1.5   Social licence to operate

        Direct employee, community and broader stakeholder engagement is critical for
        Implats and expenditure has not been curtailed in this area. The focus remains on
        housing and the social and labour plan with a budgeted spend of approximately
        R200 million in 2016. Other initiatives include skills development; local procurement
        and social investment.

3.2     Use of proceeds

        Implats has been quick to respond to the rapid deterioration of the PGM price
        environment. It has built on the outcome of the strategic review process to put in
        place a revised action plan in order to strengthen its ability to operate on a
        sustainably profitable basis in a “lower for longer” PGM price scenario.
               The principal operations at the Impala Lease Area are being fundamentally
               repositioned with plans to close 8 shaft and the mechanised operations at 12 shaft
               by December 2015. There is also a comprehensive programme to enhance
               productivity on a team-by-team basis and a series of initiatives are being taken
               across the business to cut back operating and capital costs further. The overall
               objective is to reduce R640 million of working costs from the 2016 budget and R1.3
               billion of capital expenditure and Implats will continue to evaluate its actions and
               priorities in the context of the pricing environment.

               The Group’s priorities have therefore been materially re-balanced to focus on
               shorter term profitability and cash preservation. Following these actions the Group
               is expected to be EBITDA positive in the current PGM price environment and free
               cash flow positive across the Impala Lease Area and IRS, before replacement and
               development capital. It is nevertheless critical at this stage to safeguard the
               completion of key capital projects, the suspension or abandonment of which would
               have a materially adverse impact on the long term value of the Group. The
               completion of 16 and 20 shafts at the Impala Lease Area is central to this. Implats
               expects both shafts to be value accretive and replace the decline in output from
               other shafts with cost effective production. This replacement production also has
               broader benefits for the Group by helping efficient utilisation of infrastructure and
               increasing the proportion of high grade ore from the Merensky Reef that is
               important for smelter efficiency and otherwise lost as older shafts are mined out.
               Over the next three years the current intention is to deploy R3.9 billion across both
               shafts in development and capital expenditure.

               The proposed equity raising should allow Implats to implement this plan and so
               enhance its ability to operate effectively and profitably both for the short and long

               Implats remains committed to returning excess cash flow to its shareholders going
               forward as market conditions improve.

4. Pro forma financial effects

   As the Specific Issue of Shares for Cash will have no impact on the Implats financial statements
   other than the receipt of cash and the resultant impact on earnings per share there are no pro
   forma financial effects disclosed.

5. Notice of General Meeting and posting of circular

   A general meeting of Implats Shareholders will be held at the Company’s registered office, 2
   Fricker Road, Illovo, Johannesburg on Tuesday, 6 October 2015 at 11h00 (South African time)
   (“General Meeting”) in order to consider and, if deemed fit, pass with or without modification
   the resolutions set out in the notice of General Meeting.

   A circular, incorporating the notice of General Meeting, will be posted to Implats Shareholders
   on or about 4 September 2015.
6. Salient dates and times

The Salient dates and times regarding the Specific Issue of Shares for Cash is set out below:

Record date for Implats shareholders to be recorded in the register to receive            Friday, 28 August
the circular and notice of General Meeting
Circular and notice of General Meeting posted to Implats shareholders                  Friday, 4 September
Last date to trade in the Implats ordinary shares in order to be recorded in the                Thursday, 17
register on the voting record date on                                                            September
Voting record date to vote at the Implats General Meeting being 17:00 on              Friday, 25 September
Last day for receipt of proxies for the Implats General Meeting by 11:00 on             Monday, 5 October
Implats General Meeting to consider, amongst other things, the Specific Issue of
                                                                                        Tuesday, 6 October
Shares for Cash at 11:00
Results of the General Meeting released on SENS on                                      Tuesday, 6 October

The abovementioned times and dates are South African times and dates and are subject to change.
Any material change will be released on SENS and in the press in South Africa. Should the General
Meeting be adjourned or postponed, it is requested that forms of proxy be received by no later than
24 hours (excluding Saturdays, Sundays and statutory or proclaimed public holidays in South Africa)
prior to the time of the adjourned or postponed General Meeting.

3 September 2015

Underwriter and sole bookrunner                         Transaction sponsor
UBS Limited                                             UBS South Africa Proprietary Limited

Co-independent financial adviser                        Co-independent financial adviser
Centerview Partners UK LLP                              aloeCap Proprietary Limited

Legal Advisers to Implats as to SA law and US law       Legal Advisers to Underwriter and sole
                                                        bookrunner as to US law
Fasken Martineau (incorporated in South Africa as       Davis & Polk & Wardwell London LLP
Bell Dewar Inc.)

Forward looking statements
This announcement includes certain “forward-looking statements” and “forward-looking
information”. All statements other than statements of historical fact included in this announcement
including, without limitation, statements regarding future plans and objectives of Implats are
forward-looking statements (or forward-looking information) that involve various risks, assumptions
and uncertainties. There can be no assurance that such statements will prove to be accurate and
actual values, results, actions and future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue reliance on forward-looking

Any forward-looking statements in this announcement speak only at the time of issue. Implats does
not undertake to update any forward-looking statements that are included herein, or revise any
changes in events, conditions or circumstances on which any such statements are based, except in
accordance with applicable securities laws and securities exchange listing requirements.

Notice to investors in South Africa
This announcement does not constitute an “offer to the public” (as such term is defined in the
Companies Act). Any offer of the Subscription Shares within South Africa pursuant to the accelerated
bookbuild placement will only be made to persons or entities described in section 96 of the
Companies Act which lists the types of offers that are deemed not to constitute offers to the public.

Notice to investors in the U.S.
The Subscription Shares have not been and will not be registered under the U.S. Securities Act of
1933, as amended, or under any U.S. state securities laws, and may not be offered or sold within the
U.S. absent registration or an applicable exemption from the registration requirements of the U.S.
Securities Act and applicable U.S. state securities laws. This announcement does not constitute an
offer to sell or a solicitation of an offer to buy any of the Subscription Shares within the U.S.
Accordingly, if and when the Subscription Shares are offered and sold, they will be offered and sold,
subject to certain exceptions, only outside the U.S in compliance with Regulation S promulgated
under the U.S. Securities Act.

Member States of the European Economic Area
In relation to each member state of the European Economic Area which has implemented the
Prospectus Directive (each, a “Relevant Member State”), with effect from and including the date on
which the Prospectus Directive was implemented in that Relevant Member State, no Subscription
Shares have been offered or will be offered to the public in that Relevant Member State prior to the
publication of a prospectus in relation to the Subscription Shares which has been approved by the
competent authority in that Relevant Member State or, where appropriate, approved in another
Relevant Member State and notified to the competent authority in the Relevant Member State, all in
accordance with the Prospectus Directive, except that, with effect from and including the relevant
implementation date, offers of Subscription Shares may be made to the public in that Relevant
Member State at any time:
(i)      to legal entities which are qualified investors (as defined in the Prospectus Directive);
(ii)     to fewer than 150 natural or legal persons (other than qualified investors, as defined in the
         Prospectus Directive), subject to obtaining the prior written consent of the Underwriter; and
(iii)    in any other circumstances falling within article 3(2) of the Prospectus Directive, provided
that no such offer of Subscription Shares shall result in a requirement for the publication by the
Company or any bank of a prospectus pursuant to Article 3 of the Prospectus Directive.

For this purpose, the expression “an offer of any Subscription Shares to the public” in relation to any
Subscription Shares in any Relevant Member State means the communication in any form and by
any means of sufficient information on the terms of the Specific Issue and any Subscription Shares to
be offered so as to enable an investor to decide to acquire any Subscription Shares as the same may
be varied in that Relevant Member State by any measure implementing the Prospectus Directive in
that Relevant Member State.
Notice to investors in the UK
This announcement has not been approved by an authorised person for the purposes of section 21
of the Financial Services and Markets Act 2000 (as amended) (“FSMA”). Accordingly, this
announcement is only for distribution to and directed at: (i) in the United Kingdom, persons having
professional experience in matters relating to investments falling within Article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order")and (ii)
in the United Kingdom high net worth entities falling within Article 49(2)(a) to (d) of the Order; (iii)
persons who are outside the United Kingdom; and (iv) any other person to whom it can otherwise be
lawfully distributed (all such persons together being referred to as "Relevant Persons"). Any
investment or investment activity to which this announcement relates is available only to and will be
engaged in only with Relevant Persons. Persons who are not Relevant Persons should not take any
action based upon this announcement and should not rely on it.

Date: 03/09/2015 07:07:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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