Impala Platinum Holdings Limited - Consolidated In16 Feb 2006
Impala Platinum Holdings Limited - Consolidated Interim Results for the         
six months ended 31 December 2005                                               
Impala Platinum Holdings Limited                                                
(Incorporated in the Republic of South Africa)                                  
Registration No. 1957/001979/06                                                 
Share code: IMP                                                                 
ISIN: ZAE 000003554                                                             
Issuer code: IMPO                                                               
LSE: IPLA                                                                       
ADR: IMPUY                                                                      
("Implats" or "the company")                                                    
Consolidated Interim Results for the                                            
six months ended 31 December 2005                                               
Key features                                                                    
Sales increased by 28% to R7.9 billion                                          
Group production up 7% to 938,000 ounces of platinum                            
Headline earnings increased by 78% to R28.06 per share                          
Interim dividend of R10 per share, doubled from the previous year               
Special dividend of R55 per share declared                                      
Revenue per platinum ounce up by 24% in rand terms and 18% in dollar terms      
Margins improve from 33% to 42%                                                 
Group unit costs contained to a 4.2% increase                                   
Announcement of BEE transaction with Royal Bafokeng Resources and Implats       
R4.3 billion cash to be returned to shareholders through interim and special    
Balance sheet                                                                   
As at        As at         As at                   
(all amounts in              31 December  31 December   30 June                 
Rand million                 2005         2004          2005                    
unless otherwise stated)     (Unaudited)  (Unaudited)   (Audited)               
Property, plant and          10,564.9     8,571.6       10,035.0                
Investments                  1,482.0      1,101.9       1,276.9                 
Other non-current assets     625.6        629.5         609.2                   
Current assets               9,393.4      7,338.0       8,895.3                 
Total assets                 22,065.9     17,641.0      20,816.4                
Capital and reserves         14,886.0     12,120.6      14,110.3                
Minority interest            160.2        109.5         159.8                   
Total equity                 15,046.2     12,230.1      14,270.1                
Provision for long-term      341.6        274.4         299.5                   
Borrowings                   14.9          -             -                      
Deferred income tax          2,546.7      2,067.4       2,381.1                 
Current liabilities          4,116.5      3,069.1       3,865.7                 
Total equity and             22,065.9     17,641.0      20,816.4                
Income statement                                                                
Six months to  Six months to           Year to                 
(all amounts in  31 December    31 December             30 June                 
Rand million     2005           2004           %        2005                    
unless otherwise (Unaudited)    (Unaudited)    change   (Audited)               
Sales            7,920.2        6,188.4        28.0     12 540,8                
On-mine          (2,313.5)      (2,024.3)      (14.3)   (4,109.5)               
Concentrating    (566.8)        (526.3)        (7.7)    (1,043.3)               
and smelting                                                                    
Refining         (282.4)        (247.2)        (14.2)   (502.1)                 
Amortisation of  (334.0)        (276.4)        (20.8)   (628.8)                 
mining assets                                                                   
Metals purchased (1,633.6)      (1,157.9)      (41.1)   (2,488.9)               
Increase in      514.8          65.4           687.2    454.8                   
Cost of sales    (4,615.5)      (4,166.7)      (10.8)   (8,317.8)               
Gross profit     3,304.7        2,021.7        63.5     4,223.0                 
Net foreign      (76.5)         (316.2)        75.8     32.5                    
Other operating  (154.7)        (154.3)        (0.3)    (318.9)                 
Other            (125.1)        73.2           (270.9)  292.2                   
Interest income  168.6          106.9          57.7     249.8                   
and other gains                                                                 
- net                                                                           
Finance costs    (10.2)         (37.0)         72.4     (54.3)                  
Share of profit  40.8           204.2          (80.0)   203.7                   
of associates                                                                   
Royalty expense  (379.1)        (231.2)        (64.0)   (414.9)                 
Profit from sale -              3,156.2         -       3,155.0                 
of investment in                                                                
Impairment of    -              (1,451.3)       -       (1,033.8)               
mining assets                                                                   
Profit before    2,768.5        3,372.2        (17.9)   6,334.3                 
Income tax       (942.8)        (358.4)        (163.1)  (1,080.4)               
Profit for the   1,825.7        3,013.8        (39.4)   5,253.9                 
attributable to:                                                                
Equity holders   1,814.7        3,009.8        (39.7)   5,237.6                 
of the company                                                                  
Minority         11.0           4.0            175.0    16.3                    
                 1,825.7        3,013.8        (39.4)   5,253.9                 
Earnings per                                                                    
share (expressed                                                                
in cents per                                                                    
  - basic        2,764          4,529          (39.0)   7,920                   
  - diluted      2,757          4,524          (39.1)   7,914                   
Weighted average 65.7           66.5            (1.3)   66.1                    
number of shares                                                                
in issue                                                                        
*Comprising Western Platinum Limited and Eastern Platinum Limited ("Lonplats")  
Statement of changes in shareholders" equity                                    
                   Attributable to equity                                       
                   holders of the company                                       
(all amounts in    Share    Other    Retained   Minority Total                  
Rand million                                                                    
unless otherwise   capital  reserves earnings   interest equity                 
Balance at 31      187.6    (708.6)  12,641.6   109.5    12,230.1               
December 2004                                                                   
Impact of adopting 45.0              (45.0)              -                      
IFRS2 (Share-based                                                              
Payments) on                                                                    
opening retained                                                                
Restated balance   232.6    (708.6)  12,596.6   109.5    12,230.1               
at 31 December                                                                  
Fair value gains,                                                               
net of tax:                                                                     
- Available-for-          88.2                         88.2                   
sale financial                                                                  
Currency                    148.7               8.6      157.3                  
differences, net                                                                
of tax                                                                          
Net income                  236.9               8.6      245.5                  
directly in equity                                                              
Profit for the                       2,231.6    12.3     2,243.9                
half year                                                                       
Total recognised            236.9    2,231.6    20.9     2,489.4                
income for the                                                                  
half year                                                                       
Employee share                                                                  
option scheme:                                                                  
  - Proceeds from  46.3                                  46.3                   
shares issued                                                                   
  - Fair value of  9.9                                   9.9                    
employee service                                                                
Purchase of        (168.4)                               (168.4)                
treasury shares by                                                              
Interim dividend                     (332.2)             (332.2)                
relating to 2005                                                                
Transactions with                                                               
- Purchase of               (34.4)              29.4     (5.0)                  
additional shares                                                               
in Zimplats                                                                     
Holdings Limited                                                                
(112.2)  (34.4)   (332.2)    29.4     (449.4)                
Balance at 30 June 120.4    (506.1)  14,496.0   159.8    14,270.1               
Fair value gains,                                                               
net of tax:                                                                     
  - Available-for-          100.2                        100.2                  
sale financial                                                                  
Currency                    (100.0)             (9.5)    (109.5)                
differences, net                                                                
of tax                                                                          
Net income                  0.2                 (9.5)    (9.3)                  
directly in equity                                                              
Profit for the                       1,814.7    11.0     1,825.7                
half year                                                                       
Total recognised            0.2      1,814.7    1.5      1,816.4                
income for the                                                                  
half year                                                                       
Employee share                                                                  
option scheme:                                                                  
  - Proceeds from  136.2                                 136.2                  
shares issued                                                                   
- Fair value of  6.9                                   6.9                    
employee service                                                                
Final dividend                       (1,181.9)           (1,181.9)              
relating to 2005                                                                
Transactions with                                                               
- Purchase of               (0.4)               (1.1)    (1.5)                  
additional shares                                                               
in Zimplats                                                                     
Holdings Limited                                                                
                   143.1    (0.4)    (1,181.9)  (1.1)    (1,040.3)              
Balance at 31      263.5    (506.3)  15,128.8   160.2    15,046.2               
December 2005                                                                   
Cash flow statement                                                             
                         Six months to  Six months to   Year to                 
(all amounts in          31 December    31 December     30 June                 
Rand million             2005           2004            2005                    
unless otherwise         (Unaudited)    (Unaudited)     (Audited)               
Net cash from operating  2,398.7        958.5           2,787.0                 
Cash from the sale of       -           4,919.8         4,919.8                 
Net cash used in other   (845.1)        (1,339.9)       (2,420.7)               
investing activities                                                            
Net cash used in         (1,028.3)      (2,039.4)       (2,502.7)               
financing activities                                                            
Increase in cash and     525.3          2,499.0         2,783.4                 
cash equivalents                                                                
Cash and cash            3,984.3        1,187.0         1,187.0                 
equivalents at                                                                  
beginning of the period                                                         
Effects of exchange      (10.9)          (14.5)          13.9                   
rate changes on                                                                 
monetary assets                                                                 
Cash and cash            4,498.7        3,671.5         3,984.3                 
equivalents at end of                                                           
Segment information                                                             
Summary of business segments for the half year ended 31 December 2005:          
(all amounts in Rand million                                                    
unless                                   Refining Inter                         
otherwise     Impala   Marula  Zimbabwe  Services segment                       
stated)       segment  segment segment   segment  adjustment  Total             
Sales         7,606.9  201.9   656.0     2,571.3  (3,115.9)   7,920.2           
Cost of sales 4,925.7  203.3   402.5     2,179.6  (3,095.6)   4,615.5           
Gross         2,681.2  (1.4)   253.5     391.7    (20.3)      3,304.7           
Summary of                                                                      
segments for                                                                    
the half year                                                                   
ended 31                                                                        
Sales         5,993.0  132.7   476.1     1,972.1  (2,385.5)   6,188.4           
Cost of sales 4,336.4  194.4   362.2     1,688.8  (2,415.1)   4,166.7           
Gross         1,656.6  (61.7)  113.9     283.3    29.6        2,021.7           
The interim financial statements have been prepared using accounting policies   
consistent with those of the annual financial statements for the year ended 30  
June 2005, except for the adoption of the standards as listed below, and conform
with International Reporting Standards on Interim Financial Reporting.          
The group has adopted the following accounting statements as at 1 July 2005:    
- IAS 16 Property, plant and equipment (revised 2003)                           
- IAS 21 The effects of changes in foreign exchange rates (revised 2003)        
- IFRS 4 Insurance contracts                                                    
- IFRS 5 Non-current assets held for sale and discontinued operations           
The adoption of these statements had no material effect on the results of the   
Other (expenses)/income includes the following:                                 
- Pre tax profit on sale of the Spitzkop prospecting right for R111 million.    
- On 30 November 2005 Implats advised that pursuant to its review of the        
Ambatovy Project, it has delivered a formal notice of withdrawal under the      
shareholders agreement. The total amount written off was R195 million           
(investment in the project of R127 million and bankable feasibility study cost  
of R68 million).                                                                
Headline earnings per share                                                     
                    Six months    Six months            Year to                 
to 31 Dec     to 31 Dec             30 June                 
                    2005          2004         %        2005                    
                    (Unaudited)   (Unaudited)  change   (Audited)               
- basic (expressed  2,806         1,581        77.5     4,325                   
in cents per                                                                    
- diluted           2,799         1,580        77.1     4,322                   
(expressed in                                                                   
cents per share)                                                                
Headline earnings per share reflects after tax adjustments for the profit on    
sale of the Spitzkop prospecting right of R95 million, a profit on the sale of  
the investment in Teba of R5 million and a write off of the investment in       
Ambatovy of R127 million (2004: impairment of assets of R1,198 million and      
profit on sale of Lonplats of R3,156 million).                                  
Capital expenditure approved at 31 December 2005 amounted to R10,847 million    
(2004: R9,471 million), of which R2,231 million (2004: R2,596 million) is       
already committed. This expenditure, over a period of 5 years, will be funded   
internally and, if necessary, from borrowings.                                  
During the period under review, the group acquired an additional shareholding in
Zimbabwe Platinum Holdings Limited of approximately 0.09% for R1.5 million      
(AU$0.3 million), taking the group"s holding to 87%.                            
The results for the comparable period have been restated for the effect of the  
adoption of IFRS 2 (Share-based Payments), which reduced the earnings by R12.4  
million. Basic and diluted earnings per share consequently decreased by 19 cents
per share from 1,600 cents per share and 1,599 cents per share respectively.    
Interim dividend no. 76 of 1,000 cents per share, amounting to R658.3 million   
and a special dividend of 5,500 cents per share, amounting to R3,620.9 million, 
was approved by the board of directors on 16 February 2006; Secondary Tax on    
Companies (STC) on these dividends will amount to R534.9 million.               
Contingent liabilities at 31 December 2005, arising mainly from collateral      
security for employee housing, amounted to R3,1 million (2004: R6,7 million).   
Certain guarantees from which it is anticipated that no material liabilities    
will arise were in place as at 31 December 2005:                                
- The holding company has provided a political risk guarantee for a facility,   
made available by ABSA to Zimbabwe Platinum Mines (Private) Limited. As at 31   
December 2005, the guarantee amounted to R19,9 million (2004: R2,8 million)     
((US$ 3,1 million) (2004:US$ 0,5 million)). The loan is payable bi-annually over
two years which commenced in December 2005.                                     
- The Department of Minerals and Energy for R313,3 million (2004: R103,7        
million) with respect to future environmental rehabilitation costs.             
- Eskom for the amount of R17,1 million (2004: R17,1 million) for the supply of 
- Registrar of Medical Aid Schemes for R5,0 million (2004: R5,0 million) on     
behalf of the Impala Medical Plan.                                              
Due to uncertainties regarding the timing and amount of the guarantees,         
potential outflows cannot be quantified.                                        
Operating Statistics                                                            
                          Six months   Six                Year to               
to           months to                                
                          31           31         %       30 June               
                          December     December                                 
                          2005         2004       change  2005                  
Impala       (000oz)      591          547        8.0     1,115                 
IRS          (000oz)      347          333        4.2     733                   
Total        (000oz)      938          880        6.6     1,848                 
IRS metal                                                                       
Platinum     (000oz)      145          101        43.6    246                   
Palladium    (000oz)      104          40         160.0   160                   
Rhodium      (000oz)      23           27         (14.8)  54                    
Platinum     (000oz)      833          803        3.7     1,562                 
Palladium    (000oz)      440          394        11.7    826                   
Rhodium      (000oz)      93           91         2.2     177                   
Nickel       (000t)       6.7          7.0        (4.3)   14.6                  
Platinum     ($/oz)       911          829        9.9     840                   
Palladium    ($/oz)       207          221        (6.3)   208                   
Rhodium      ($/oz)       2,260        1,001      125.8   1,217                 
Nickel       ($/t)        14,218       13,945     2.0     14,592                
Average      (R/$)        6.49         6.21       4.5     6.20                  
Closing      (R/$)        6.31         5.63       12.1    6.66                  
Revenue per                                                                     
  ounce sold (R/oz)       9,423        7,620      23.7    7,930                 
             ($/oz)       1,452        1,227      18.3    1,279                 
Tonnes       (000t)       10,394       9,646      7.8     19,315                
milled ex-                                                                      
PGM refined  (000oz)      1,773        1,677      5.7     3,549                 
Capital      (Rm)         948          771        23.0    1,992                 
Group unit                                                                      
cost per                                                                        
ounce        (R/oz)       4,749        4,557      (4.2)   4,548                 
             ($/oz)       732          734        0.3     735                   
(relating to                                                                    
reporting                 1,000        500         100    2,300                 
Additional statistical information is available on the company"s internet       
Declaration of interim dividend                                                 
An interim dividend of 1,000 cents per share has been declared in respect of the
half-year ended 31 December 2005. The last day to trade ("cum" the dividend) in 
order to participate in the dividend will be Friday, 3 March 2006. The share    
will commence trading "ex" the dividend from the commencement of business on    
Monday, 6 March 2006 and the record date will be Friday, 10 March 2006.         
The dividend is declared in the currency of the Republic of South Africa.       
Payment from the London transfer office will be made in United Kingdom currency 
at the rate of exchange ruling on 8 March 2006 or on the first day thereafter on
which a rate of exchange is available.                                          
The dividend will be paid on Monday, 13 March 2006. Share certificates may not  
be dematerialised/rematerialised during the period Monday, 6 March 2006 to      
Friday, 10 March 2006, both dates inclusive.                                    
Declaration of special dividend                                                 
In light of the positive view of the market and the fact that Implats has       
sufficient cash to pursue its growth objectives while maintaining prudent cash  
management, the Board of Directors has declared a special dividend of 5,500     
cents per share. The last day to trade ("cum" the dividend) in order to         
participate in the special dividend will be Friday, 3 March 2006. The share will
commence trading "ex" the special dividend from the commencement of business on 
Monday, 6 March 2006 and the record date will be Friday, 10 March 2006.         
The dividend is declared in the currency of the Republic of South Africa.       
Payment from the London transfer office will be made in United Kingdom currency 
at the rate of exchange ruling on 8 March 2006 or on the first day thereafter on
which a rate of exchange is available.                                          
The dividend will be paid on Monday, 13 March 2006. Share certificates may not  
be dematerialised/rematerialised during the period Monday, 6 March 2006 to      
Friday, 10 March 2006, both dates inclusive.                                    
By order of the board                                                           
R Mahadevey         Johannesburg                                                
Group Secretary     16 February 2006                                            
Review of operations                                                            
Production at Implats was 938,000 ounces of platinum in the six months to end   
December 2005, an increase of 6.6% on the comparable 2004 period. This was      
largely a result of higher production at Impala Platinum"s mining operations.   
Although the emphasis on safety on a group-wide basis continues, regrettably    
there were five fatal accidents at Implats during the first six months of the   
financial year, all of them at Impala Platinum. (There were four fatal accidents
in the previous period). The Implats Board and management extend their          
condolences to the families and colleagues of the deceased. There were no fatal 
accidents at Marula, Mimosa or Zimplats during the period. In spite of the worse
performance in the first six months, the fatality frequency rate has improved by
41% over the past five years.                                                   
At a group level, the lost time injury frequency rate (LTIFR) deteriorated      
marginally, by 3%, compared to the six months to December 2004. The LTIFR has   
improved by more than 50% over the past five years.                             
Renewed emphasis has been placed on safety in the workplace and on the          
elimination of all fatal accidents at work, with an emphasis on training and    
leadership. The Tsiboga campaign (which means "on the look out" in Tswana)      
continues to play a pivotal role.                                               
Impala Platinum Limited (Impala)                                                
Production at Impala Platinum, Implats" flagship operation, reached another     
record level for the six months ended December 2005. Overall, platinum          
production rose by 8.0% to 591,000 ounces on the back of record tonnes milled of
8.555 million, an increase of 9.3%.                                             
Overall grade declined by 4.2% as volumes from mechanised mining increased and  
as more difficult ground conditions at 11 shaft resulted in some dilution. A    
high-level team has been set up to investigate ways of improving the grade and  
to focus on quality mining.                                                     
Drill jigs (dynamic drilling technology) have been rolled out to approximately  
30% of the Merensky panels. The primary benefits from the implementation of the 
drill jigs are improvements in safety, productivity/efficiencies and the        
reduction in physical effort required on the job. Overall, drill jigs have      
resulted in a 6% improvement in mining efficiencies on the Merensky reef since  
the start of their implementation.                                              
Excellent progress has been made with the two major capital projects at Impala, 
namely 16 and 20 Shafts. Together these shafts will contribute 355,000 as       
replacement ounces to platinum production at Impala when they reach full        
production - during 2011 for 20 shaft and 2014 for 16 shaft.  Sinking of the    
main shaft at 16 shaft reached 90 metres below surface at the end of January    
2006, which is some five months ahead of schedule, while sinking of the main    
shaft at 20 shaft was 500 metres below surface, about four months ahead of      
schedule. Of the combined capital approved for these projects of R6.6 billion,  
R668 million has been spent to date, and a total of R1.71 billion has been      
Impala"s processing and refining operations continued to excel, with throughput 
rising to record levels. Concentrator recoveries increased by 2.5% to 85.5% as a
result of the tails scavenging facility and improvements achieved at the UG2    
The unit cost per platinum ounce refined at Impala was well contained,          
increasing by 4.5% to R4,468 per ounce, despite the implementation of the first 
phase of the two-year wage agreement (6.5% increase).                           
Gross refined platinum production increased by 6.6% to 938,000 ounces with PGM  
production up by 5.7% to 1.8 million ounces.                                    
The project to expand capacity to 2 million ounces at the Precious Metals       
Refinery (PMR) is on track and expected to be completed by end June 2006, with  
final environmental clearance anticipated by the end of 2006. The Base Metals   
Refinery (BMR) expansion to 2 million ounces was successfully completed within  
budget during the period. Additional capital expenditure has been approved to   
enlarge the PMR"s nameplate capacity to 2.3 million ounces of platinum and      
further expansion options at the BMR are being evaluated.                       
Capital expenditure at Impala was R717 million during the period.               
Marula Platinum (Proprietary) Limited (Marula)                                  
For the six months to December 2005, tonnes mined at Marula improved by 28% with
tonnes milled up marginally by 1.3%. The relatively low increase in the latter  
was due to the milling of stockpiled material in previous periods. There was a  
marked improvement in the grade mined of 38%. Platinum-in-concentrate production
rose from 17,300 ounces to 18,900 ounces, while unit costs were 7.0% lower at   
Cash breakeven has been achieved at Marula and good progress is being made with 
the implementation of the new mining plan, which has been adopted to suit the   
geological conditions prevailing at the mine. While the hybrid mining continues 
to make steady progress, development towards conventional mining operations is  
currently five months ahead of schedule.                                        
The implementation of drill jigs is progressing well and currently stands at 70%
completion. Although the transition to owner-mining has resulted in improved    
efficiencies, it has been hampered by sporadic industrial action.               
The ramp-up to full production of 144,000 ounces per annum is expected to be    
completed by 2009. Capital expenditure for the period amounted to R137 million. 
Zimbabwe Platinum Mines Limited (Zimplats)                                      
Despite a decline of 2.8% in tonnes milled, production of platinum-in-matte rose
by 2.6% to 43,400 ounces. The yield improved by 6% while unit costs increased by
9.0% to $1,037/oz per platinum ounce in matte. The large escalation (in dollar  
terms) of the opencast contract fee had a negative influence on costs.          
The transition from opencast to underground mining is currently underway and 35%
of tonnes mined are now being sourced from underground. This transition is      
expected to alleviate further cost increases associated with relatively higher- 
cost open cast mining operations.                                               
Phased growth is being planned at Zimplats. A feasibility study on the expansion
to 145,000 ounces of platinum annually is currently being reviewed and will be  
placed before the Zimplats and Implats boards for approval in May 2006. In the  
interim, infrastructural development; power supply, water weirs and surface     
earthworks, has been completed.                                                 
The Implats and Zimplats boards identified a number of risks associated with    
further expansions at Zimplats. Of the risks categorised as socio-political or  
economic in nature, a number have been satisfactorily addressed, including      
resolution of the foreign exchange arrangements and granting of the Ngezi       
Special Mining Lease. The Zimplats and Implats boards will continue to assess   
the remaining identified risks, to gain clarity on empowerment requirements and 
the granting of the second Special Mining Lease. At the same time they will     
closely monitor the completion of a comprehensive technical and mining          
assessment in order that a decision regarding the planned expansion programme   
can be taken soon.                                                              
Capital expenditure for the period totalled R73 million, an increase of 61%.    
Mimosa Platinum (Private) Limited (Mimosa)                                      
Tonnes milled improved by 13.5% to 764,000 tonnes, resulting in an increase of  
16.6% in platinum production to 36,500 ounces of platinum-in-concentrate. Yield 
of 3.09g/t was 3.6% higher, while unit cost per platinum ounce in concentrate   
was 15,0% lower at $724/oz. Costs in rand terms decreased by 10.6% to R4,721/oz.
The project to expand production to 80,000 ounces of platinum is well underway  
and is on schedule and on budget. A substantial stockpile has been created in   
anticipation of the commissioning of the new plant in the middle of this year.  
Capital expenditure for the period amounted to R44 million (R22 million         
attributable to Implats).                                                       
Two Rivers Platinum (Proprietary) Limited (Two Rivers)                          
Implats and African Rainbow Minerals are joint venture partners (45:55) in the  
Two Rivers Platinum project. Capital expenditure to commissioning is R1.2       
billion, of which R1 billion has been spent to date (45% attributable to        
Implats). The project is ahead of schedule and start-up is planned for July     
2006. Full production of 120,000 ounces is scheduled for late 2007.             
Impala Refining Services Limited (IRS)                                          
Refined platinum production at IRS increased by 4.2% to 347,300 ounces with     
gross profit improving by 38% to R392 million.                                  
Aquarius Platinum (South Africa) (Proprietary) Limited (AQPSA)                  
Implats holds a stake of 8% in the listed company Aquarius Platinum Limited and 
a 20% stake in the latter"s subsidiary Aquarius Platinum (South Africa). AQPSA  
contributed R41 million to earnings for the period under review. In terms of    
operating performance, Aquarius" Kroondal performed well, a contractor dispute  
constrained improvements at Marikana, and the production ramp-up at Everest is  
on schedule, with the first concentrate delivered to IRS during the period.     
Ambatovy Nickel Project                                                         
Following a feasibility study, Implats announced its withdrawal from the        
Ambatovy Nickel project in Madagascar as the project no longer met Implats"     
internal hurdle rates. Mining, capital and production costs had escalated       
significantly since the original feasibility study was concluded in February    
2005. The cost to Implats of its participation in the project was R195 million, 
of which R127 million represents the investment and R68 million the cost of the 
feasibility study.                                                              
Market review                                                                   
The platinum market remained tight throughout 2005 on the back of continuing    
strong demand from the automotive sector, primarily driven by diesel vehicles,  
as well as solid support from industrial applications. Jewellery displayed      
remarkable resilience in the face of prices that rose from a low of $844 in     
January, to finally exceed $1,000 by calendar year end with demand in this      
sector declining by only 10%.                                                   
The palladium market moved closer to balance in 2005, due to a combination of   
further substitution of platinum in gasoline engines and surging demand from the
fledging Chinese jewellery sector. Prices remained remarkably steady for most of
the year, but finally made a move towards $300 in the final quarter of the year,
benefitting from a general run in commodities and improving fundamentals.       
The rhodium market moved to a deficit in 2005 as a result of ongoing strong     
demand from the auto industry to meet more stringent NOX legislation and another
banner year from the glass industry, which is moving to the production of wider 
TFT-LCD panels used in a variety of applications from television sets to        
handheld devices. As a result the price rose 50% during the year exceeding      
$3,000 per ounce at year end.                                                   
Corporate matters                                                               
BEE Transaction                                                                 
During the interim period, Implats announced its proposals for a black economic 
empowerment (BEE) transaction which would see the Royal Bafokeng Nation (RBN)   
through Royal Bafokeng Resources (Pty) Ltd (RBR), acquire a stake of            
approximately 9% in Implats by 2016. Implats believes that, when taken at an    
Impala Platinum level, the stake acquired by the RBR will be equivalent to 12.3%
of units of production. Together with an Employee Share Ownership Programme     
(ESOP) aimed at A, B and C level Paterson grade employees of its South African  
operations, also announced during the reporting period, and credits attributed  
from the sale to historically disadvantaged South Africans of a portion of      
Implats" stake in Lonmin"s platinum interests, Impala Platinum will  achieve the
26% BEE ownership required in terms of the Broad-Based Socio-Economic           
Empowerment Charter for the Mining Industry. These calculations are subject to  
confirmation by the Department of Minerals and Energy and ongoing discussions   
are being held in this regard.                                                  
The transactions with the RBR and the ESOP are expected to be concluded by June 
In November 2005, Mr Shadwick Bessit, the Operations Executive at Impala        
Platinum"s mining and mineral processing operations was appointed as an         
executive director to the Implats board, bringing the number of executive       
directors on the board to five.                                                 
Financial review                                                                
The interim period of the 2006 financial year was characterised by continued    
strong growth in headline earnings, principally as a result of increases in     
sales volumes and metal prices. Dollar revenue per platinum ounce sold was up   
18.3% with the corresponding rand revenue 23.7% higher.                         
Margins improved across the group with the gross margin rising to 42%. Headline 
earnings per share, on a restated basis, rose by 77.5% to 2,806 cents. Earnings 
per share were further enhanced as a result of the impact of the share buy-back 
programme. Basic earnings per share declined by 39% as earnings in the          
comparable period in 2005 had been boosted by profit from the sale of Implats"  
stake in Lonmin"s platinum interests.                                           
Sales for the period ending December 2005 increased by 28.0% to R7.92 billion   
from R6.19 billion for the six months ending December 2004. In dollar terms,    
sales were 22.5% higher at $1.22 billion. The main drivers of sales were as     
- sales volumes up by 3.4%, resulting in a positive volume of R213 million;     
- metal prices of platinum and rhodium strengthened in both rand and dollar     
terms, exceeding expectations; with PGM prices and especially that of platinum  
reaching record levels, overall dollar prices improved by 19.0% contributing to 
a positive price variance of R1.2 billion;                                      
- the rand/dollar exchange rate weakened during the period and closed at R6.31/$
on 31 December 2005 compared to a close of R5.63/$ on 31 December 2004. The     
average exchange rate achieved for the period under review was R6.49/$ versus   
R6.21/$ for the comparative period. The weaker exchange rate contributed 5.6% to
higher sales, equivalent to R343 million. The strengthening of the rand towards 
the end of December 2005 from weaker levels recorded during the period, resulted
in exchange losses of R77 million versus R316 million in December 2004.         
Cost of sales was up by 10.8% to R4.62 billion largely as a result of a 7.8%    
increase in tonnes milled and an annual wage adjustment of 6.5% at Impala       
Platinum, which employs 90% of group employees. The group unit cost per platinum
ounce produced rose by 4.2% in line with inflation, to R4,749 per platinum      
The contribution to profit by associates was R41 million, down from R204 million
in the previous comparative financial period, which included equity-accounted   
profit from Implats" stake in Lonmin"s platinum interests.                      
Earnings contributions                                                          
As in previous years, Implats" income continued to be derived from three        
sources, with the bulk from the mine-to-market operations (89%). The other two  
sources of income being IRS and equity income from investments.                 
Contribution to headline earnings                                               
Six months                  Six months                         
                 to 31 Dec     %              to 31 Dec   %                     
R million        2005          contribution  2004         change                
Impala Platinum  1 501         81.5          872          72.1                  
IRS              224           12.2          77           190.9                 
Marula           (9)           (0.5)         (34)         73.5                  
Zimplats         74            4.0           52           42.3                  
Mimosa           79            4.3           51           54.9                  
Aquarius         41            2.2           (3)          1 466.7               
Ambatovy         (68)          (3.7)         -            -                     
Gazelle/Lonplats -             -             36           -                     
Headline         1 842         100.0         1,051        75.3                  
- Mine-to-market operations: The mine-to-market operations owned by the Implats 
group contributed R1.65 billion (89%) to headline earnings. These operations    
comprise Impala Platinum, Marula Platinum and Two Rivers (45%) in South Africa  
and Zimplats and Mimosa (50%) in Zimbabwe. Marula reported a negative           
contribution of R9 million which was a significant improvement on the loss      
reported previously of R34 million. The Zimbabwe operations reported significant
increases in margins due to higher US dollar revenue and positive currency      
Operating margins                                                               
                 Six months to   Six months to                                  
Entity           31 Dec 2005     31 Dec 2004                                    
Impala Platinum  50              40                                             
Zimplats         34              22                                             
Marula           (1)             (47)                                           
Mimosa           49              28                                             
IRS              15              14                                             
Implats group    42              33                                             
- IRS, housing Implats" third-party refining services, contributed R224 million 
to group headline profit, an increase of 190%. Given the lower risks and capital
requirements of IRS, margins at this entity are lower than at other operations  
within the group. Margins for the 2006 interim period were 15%. Sales for the   
period rose by 30.4% to R2.6 billion with a 4.3% increase in platinum production
to 347,300 ounces. This resulted in an increase in its contribution to group    
headline profit to 12.2% as compared to a contribution of 7.3% in the previous  
interim period.                                                                 
- Equity income from investments of R41 million was from Implats" holding in    
Aquarius Platinum SA, largely due to the higher US dollar receipts.             
Attributable earnings to equity holders declined by 39.7% to R1.81 billion as a 
result of the profit on the sale of Lonplats in the previous six months.        
Balance sheet structure and cash flow                                           
The emphasis on maintaining a strong balance sheet continues to ensure that     
there is sufficient funding for the group"s planned future capital expenditure  
over the next five to ten years.                                                
Cash from operating activities during the interim period totalled R2,399 million
and the net increase after accounting for investing and financing activities was
R525.3 million. After funding of the capital expenditure programmes, dividends  
and investments to 31 December 2005, the net closing cash position was R4.5     
billion, up 22.5% from the comparable period.                                   
Consistent with previous statements in this regard, the Board has decided to    
return a significant amount of cash to shareholders, and to this extent has     
declared a special dividend of R55 per share on 16 February 2006. The special   
dividend combined with the interim dividend and STC payable will result in a    
total cash outflow of R4.8 billion. This will deplete the surplus cash on hand  
as at 31 December 2005.                                                         
Capital expenditure                                                             
Group capital expenditure for the 2006 interim period totalled R948 million as  
compared to R771 million in the previous interim period. The bulk of this       
capital expenditure, R717 million, was spent at Impala Platinum and mainly on   
the development of 16 and 20 Shafts. The Zimbabwean operations accounted for    
capital expenditure of R94 million, and Marula R137 million.                    
The platinum market is expected to remain tight for the medium term, again led  
by the auto sector, which is striving to meet stricter emission legislation     
worldwide.  The market is expected to be well supported by a resilient jewellery
sector. The future direction of the palladium market depends on the extent of   
refined stocks, and the sustainability of its use in the jewellery trade.       
Automotive usage should ensure that the rhodium market remains                  
firm in the short- to medium-term.                                              
From an operational perspective Implats is on track to reach 2.3 million ounces 
of platinum production per annum by 2010, with the potential for further upside 
presented by its Zimbabwean operations. The company remains highly cash         
generative, and given its track record and continued focus on cost containment  
and efficiency improvements, margins are expected to remain at healthy levels.  
Given the current exchange rate and prevailing metal prices, the headline       
earnings (excluding the impact of the recently announced BEE transaction but    
including the impact of STC relating to the special dividend) are expected to be
20 to 30% higher than the previous financial year.                              
FJP Roux  K C Rumble               Johannesburg                                 
Chairman  Chief Executive Officer  16 February 2006                             
Corporate information                                                           
Registered Office                                                               
3rd Floor, Old Trafford 4, Isle of Houghton                                     
Boundary Road, Houghton 2198                                                    
(P.O. Box 61386, Marshalltown 2107)                                             
Transfer Secretaries                                                            
South Africa: Computershare Investor Services 2004 (Pty) Limited                
70 Marshall Street, Johannesburg, 2001, (P.O. Box 61051, Marshalltown, 2107)    
Facsimile +27 11 688-5200   Telephone +27 11 370-5000                           
United Kingdom: Computershare Investor Services plc                             
The Pavilons, Bridgewater Road, Bristol, BS13 8AE                               
FJP Roux (Chairman), KC Rumble (Chief Executive Officer), S Bessit, DH Brown, CE
Markus, JM McMahon*, MV Mennell, TV Mokgatlha, K Mokhele, NDB Orleyn, LJ Paton, 
JV Roberts, LC van Vught                                                        
A copy of this Report is available on the Internet web site:                                                                   
Alternatively please contact the Company Secretary, via e-mail at       or by post at P.O. Box 61386, Marshalltown 2107,    
South Africa.                                                                   
Telephone: (011) 481 3900                                                       
Date: 16/02/2006 08:01:09 AM Produced by the JSE SENS Department