IMPALA PLATINUM HOLDINGS LIMITED - June 2020 marke24 Jun 2020
June 2020 market update

IMPALA PLATINUM HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1957/001979/06)
JSE Share code: IMP
ISIN: ZAE000083648
JSE Convertible Bond Stock Code: IMCB22
JSE Convertible Bond ISIN: ZAE000247458
ADR code: IMPUY

(“Implats” or “the Group”)

June 2020 market update

Implats refers to its SENS announcement of 30 April 2020 which provided revised Group
guidance for FY2020. The Group cautioned at the time as to the fluidity of the operating
environment created by the Covid-19 pandemic and its potential impact on guided production
parameters. Implats is therefore pleased to provide a further market update ahead of its closed
period starting 30 June 2020.

Implats’ Chief Executive Officer, Nico Muller, commented: “Several innovative solutions have
been developed by our management teams including different cycles of work and staggered
shift systems aimed at enabling the best possible precautionary measures against the spread
of Covid-19 among our employees. Through collaboration and co-operation between
employees, union structures and management, we have created safer workplaces, and, a
better-than-expected production performance across Group operations in the final quarter of
FY2020.

Logistical constraints have eased and, despite the undeniable impact of the pandemic on
global economic activity, demand for metal from our customers has remained robust, allowing
us to capitalise on a reduction in excess inventory and a period of robust rand PGM pricing.

As the pandemic progresses in the coming months, we expect to face increasing challenges
to our medical preparedness and operational resilience. The benefit of experience gained by
our team over the past few months, together with the geographical diversification of our
operational footprint and the strong financial position of the Group, will prove vital to
successfully navigating the expected variability in the near-term operating environment.”

OUTLOOK AND GUIDANCE FOR FY2020

South Africa

The nationwide lockdown in South Africa, implemented on 26 March 2020, imposed legislated
limits on staffing levels at Impala Rustenburg, Marula and the joint venture at Two Rivers, but
made allowances for continued operations at the Group’s processing operations.

From 1 June 2020, restrictions on staffing levels were uplifted. However, the need for a
prudent and phased approach to intra-provincial travel by employees, particularly those
identified as returning from ‘hot spots’, has continued to limit attendance levels at operations
in Limpopo and the North West. Implats has made use of mandatory quarantine and isolation
protocols for returning workers from ‘hot spot’ areas to minimise the risk of transmission to its
workforce and host communities. In addition, South Africa’s national borders remain closed
and circa 5% of Group employees remain in their home countries.

Despite these limitations on staffing, the ramp-up of production has surpassed initial
expectations, with revised operating protocols proving effective in mitigating the impact of
potential virus-related interruptions at the Group’s South African mines, which had returned to
circa 85% of capacity by mid-June 2020.

Infection rates are expected to peak in South Africa in the coming months, and the challenges
associated with screening and identifying Covid-19 cases will be further complicated by the
prevalence of seasonal influenza. It remains Implats’ view that much of FY2021 will be
characterised by a ‘BUSINESS UNUSUAL’ operating environment.

Impala Refining Services (IRS)

Force majeure notices instituted on IRS customers from 26 March 2020 were uplifted in a
phased approach in May and June 2020. Excess concentrate and matte inventory
accumulated by customers (including Group operations) during the force majeure period are
expected to be received in full by Q1 FY2021.

Smelters and refineries were identified as ‘essential services’ during the national lockdown in
South Africa and the systematic ramp-up of operations and continued, albeit reduced,
production of refined volumes has resulted in the Group being able to fully refine the previously
identified excess in-process PGM inventory. As a result, refined and sales volumes will exceed
concentrate production in FY2020.

Given production rates relative to plan in FY2020, a decision was made to bring forward the
annual acid plant maintenance scheduled for July 2020. This is expected to result in greater-
than-usual alignment of processing and mining capacity in Q1 FY2021 but will have a small
impact on the FY2020 year-end processing inventory.

Implats declared force majeure on its contractual deliveries of final metal to its customers when
the national lockdown in South Africa was announced on 23 March 2020. This was uplifted on
22 June 2020. Prior to this upliftment, discussions for customer deliveries were conducted
monthly. To date, the overwhelming majority of Implats’ customers have elected to receive
their metal rather than exercise their right under force majeure to cancel deliveries. Logistical
constraints have eased with the resumption of international flights, such that these no longer
pose a risk to Implats’ ability to deliver metal.

Zimbabwe

Both Zimplats and the joint venture at Mimosa have operated uninterrupted and well within
pre-Covid-19 FY2020 guidance. Despite the indefinite extension of the national lockdown,
permission to continue mining operations remains in place and, to date, potential risks to output
associated with virus-related employee attendance and supply chain and logistical challenges
have not materialised. Residual concentrate and matte inventory accumulated in-country
during the IRS force majeure period is expected to be delivered to our Rustenburg processing
facilities in full by Q1 FY2021.

Canada

At Impala Canada, an outbreak of Covid-19 at the operation in mid-April 2020, necessitated
the temporary cessation of mining operations. The progress of the pandemic in Canada and
the “fly-in, fly-out” staffing model also required an appropriately cautious approach to re-staffing
and re-starting operations at Lac des Iles, with the mine expected to return to full production in
Q1 FY2021.

Capital investment

Implats’ capital allocation framework highlights the importance of appropriate levels of capital
investment to support operational resilience and environmental compliance. Interruptions to
operational activity across the Group as a result of national lockdowns has impacted the ability
to spend to plan in FY2020. Lower guidance therefore reflects the impact of business
interruption rather than a deliberate reduction of investment spend.


 Business area                        Unit       Actual       Previous Guidance       Revised Guidance
                                                 FY2019            FY2020                 FY2020

 Refined production*
 Implats                     6E oz refined       3 073            2 600 - 2 900           2 770 - 2 795


 Concentrate production
 Impala                             6E oz        1 286              975 - 1 050           1 060 - 1 115
 Zimplats                           6E oz          572                550 - 600               585 - 600
 Two Rivers                         6E oz          313                225 - 260               245 - 255
 Mimosa                             6E oz          261                210 - 260               240 - 250
 Marula                             6E oz          217                190 - 210               200 - 210
 Impala Canada                      6E oz            -                  75 - 95                90 - 100
 IRS (third party)                  6E oz          361                290 - 310               315 - 330


 Group capital expenditure            Rm         3 786            3 600 - 4 400           4 000 - 4 400

*includes saleable ounces from Impala Canada

Implats expects to release FY2020 results on 3 September 2020.
The information contained in this market update has not been reviewed or reported on by
Implats’ auditors.


Queries:
Johan Theron
E-mail: johan.theron@implats.co.za
T: +27 (0) 11 731 9013/43
M: +27 (0) 82 809 0166

Emma Townshend
E-mail : emma.townshend@implats.co.za
T : +27 (0) 21 794 8345
M : +27 (0) 82 415 3770

Alice Lourens
E-mail: alice.lourens@implats.co.za
T: +27 (0) 11 731 9033/43
M: +27 (0) 82 498 3608

24 June 2020
Johannesburg

Sponsor to Implats
Nedbank Corporate and Investment Banking

Date: 24-06-2020 02:00:00
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