Lonmin PLC US$817 million Rights Issue (7364Q)

TIDMLMI

RNS Number : 7364Q

Lonmin PLC

09 November 2012

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN OR ANY OTHER JURISDICTION WHERE THE RELEASE, PUBLICATION OR DISTRIBUTION OF THIS ANNOUNCEMENT IS NOT PERMITTED BY APPLICABLE LAW OR REGULATION

9 November 2012

Lonmin Plc

US$817 million Rights Issue

The Board of Lonmin Plc ("Lonmin" or "the Company") today announces an underwritten Rights Issue to raise gross proceeds of approximately US$817million.

Lonmin's full year results for the financial year ended 30 September 2012 have also been released today in an accompanying announcement.

Highlights

-- 9 for 5 underwritten Rights Issue of up to 365,503,264 New Shares at 140 pence per New Share (or, in the case of Qualifying South African Shareholders, ZAR 19.4872 per New Share) to raise net proceeds of approximately US$777 million

-- The net proceeds of the Rights Issue will be used to reduce indebtedness and substantially strengthen the Company's overall financial position at a time of weak margins in the platinum mining industry

-- Upon receipt of the net proceeds and their application in repaying amounts outstanding under the Company's existing debt facilities, the Amended Facilities Agreements which the Company has entered into with its existing lending syndicate will come into effect and will substitute tangible net worth and capex based covenants for the Lonmin Group's existing net debt / EBITDA and EBITDA / interest covenants

Roger Phillimore, Chairman of Lonmin, said:

"The Board remains confident of the longer-term potential of Lonmin, with its high-quality asset base and long-term mining licences, and in the long-term fundamentals of the PGM industry. Its primary focus continues to be on preserving and enhancing value for all Shareholders.

The tragic events at Marikana resulted in a material reduction in production at a time when we were not well positioned to absorb the resulting financial shock.

The Rights Issue is expected to raise approximately US$817 million in gross proceeds, and was designed with one thing in mind: to help our shareholders maximise returns from the Company's excellent assets and position in the market, when it improves."

The Rights Issue

The Rights Issue will result in the issue of up to 365,503,264 New Shares (representing up to 64.3 per cent. of the enlarged issued share capital of Lonmin) at a price of 140 pence per New Share, in respect of Qualifying Shareholders (other than Qualifying South African Shareholders) or, in the case of Qualifying South African Shareholders, ZAR 19.4872 per New Share, payable in full on acceptance. The Rights Issue will be on the basis of:

9 New Shares for every 5 Existing Shares.

The New Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Shares, including the right to receive all future dividends and other distributions declared, made or paid after the date of their issue.

The UK Issue Price of 140 pence per New Share, which is payable in full by Qualifying Shareholders other than Qualifying South African Shareholders on acceptance by no later than 11.00 a.m. (London time) on 10 December 2012, represents, in effect:

   --      a 69.1 per cent. discount to the closing price of an Existing Share; and 
   --      a 44.4 per cent. discount to the theoretical ex-Rights price of an Existing Share, 

in each case based on the closing middle-market price of 452.8 pence on the LSE on the last business day prior to the date of announcement of the terms of the Rights Issue.

The SA Issue Price of ZAR 19.4872 per New Share, which is payable in full by Qualifying South African Shareholders on acceptance by no later than 1.00 p.m. (Johannesburg time) on 10 December 2012, represents:

   --      a 69.7 per cent. discount to the closing price of an Existing Share; and 
   --      a 45.0 per cent. discount to the theoretical ex-Rights price of an Existing Share, 

in each case based on the closing price of ZAR 64.22 on the JSE on the last business day prior to the date of announcement of the terms of the Rights Issue.

The Rights Issue is being underwritten by Citi, HSBC, J.P. Morgan Cazenove, Standard Bank, BNP Paribas, Investec, Rand Merchant Bank and Standard Chartered, save in respect of New Shares which the Directors have irrevocably undertaken to take up.

The Board has received financial advice from Greenhill in relation to the Rights Issue.

This summary should be read in conjunction with the full text of this announcement. Further, this summary contains extracts from the Chairman's Letter in the Prospectus, which extracts are qualified and/or contextualised by, and should be read with, the Prospectus.

CONTACTS

 
 Lonmin 
                                                                 [phone] 
                                                                               / 
 Tanya Chikanza (Head of Investor Relations)                    [phone] 
 Ruli Diseko (Investor Relations Manager)                        [phone] 
 
 Greenhill 
  (UK Sponsor and Financial Adviser)                            [phone] 
 David Wyles 
 Anthony Parsons 
 Edward Rowe 
 
 Citi (Joint Bookrunner and Corporate 
  Broker)                                                       [phone] 
 Jan Skarbek 
 Alex Carter 
 Robert Way 
 Sean Wegerhoff (South Africa)                                  [phone] 
 
 J.P. Morgan Cazenove (Joint Bookrunner 
  and Corporate Broker)                                         [phone] 
 Michael Wentworth-Stanley 
  Jonathan Wilcox 
 J.P. Morgan Equities Limited 
  (SA Transaction Sponsor)                                       [phone] 
 Jako Van Der Walt 
 
 HSBC (Joint Bookrunner)                                        [phone] 
 Nick Donald 
 Alexander Paul 
 
 Standard Bank (Joint Bookrunner) 
 Eric Von Glehn                                                 [phone] 
 Simon Matthews                                                 [phone] 
 
 Cardew Group 
 James Clark / Emma Crawshaw                                    [phone] 
 Sue Vey                                                         [phone] 
 
 Brunswick - Johannesburg 
                                                                 [phone] 
                                                                               / 
 Cecilia de Almeida                                              [phone] 
 

SHAREHOLDER ENQUIRIES

UK Shareholders: Contact the UK Shareholder Helpline on 0871 384 2958 (from inside the United Kingdom) or [phone] (from outside the United Kingdom). This Shareholder Helpline is available from 8.30 a.m. to 5.30 p.m. (London time) Monday to Friday (except bank holidays).

South African Shareholders: contact the South African Shareholder Helpline on 011 713 0893 (from inside South Africa) or [phone] (from outside South Africa). This Shareholder Helpline is available from 8.00 a.m. to 5.00 p.m. (Johannesburg time) Monday to Friday (except public holidays).

Please note that for legal reasons, the UK Shareholder Helpline and the South African Shareholder Helpline are only able to provide information contained in this announcement or the prospectus relating to the Rights Issue (when published) and information relating to Lonmin's register of members and are unable to give advice on the merits of the Rights Issue, or provide legal, financial, tax or investment advice.

This announcement is an advertisement and not a prospectus and investors should not subscribe for or purchase any Nil Paid Rights, Fully Paid Rights, Letters of Allocation or New Shares referred to in this announcement except on the basis of information in the Prospectus which, subject to UKLA approval, is expected to be published by the Company today in connection with the Rights Issue. Copies of the Prospectus will, following publication, be available from the Company's registered office. This announcement does not constitute, or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security in the capital of the Company in any jurisdiction. Any decision to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any Provisional Allotment Letter, Nil Paid Rights, Fully Paid Rights, Letters of Allocation and/or New Shares should only be made on the basis of information contained in and incorporated by reference into the Prospectus which contains further details relating to the Company in general as well as a summary of the risk factors to which an investment in the New Shares is subject. Nothing in this announcement should be interpreted as a term or condition of the Rights Issue. Subject to certain exceptions, the Prospectus will not be available to Shareholders located in the United States or any of the Excluded Territories. This announcement is not directed to, or intended for distribution or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability, or use would be contrary to law or regulation which would require any registration or licensing within such jurisdiction.

This announcement and the information contained herein is not an offer of securities for sale in the United States. The Nil Paid Rights, the Fully Paid Rights, the Letters of Allocation, the New Shares, the Forms of Instruction and the Provisional Allotment Letters have not been and will not be registered under the US Securities Act of 1933(the "Securities Act"), or under any securities laws of any State or other jurisdiction of the United States and may not be offered, sold, resold, pledged, taken up, exercised, renounced or otherwise delivered, distributed or transferred, directly or indirectly, into or within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any State or other jurisdiction of the United States. No public offering of the Nil Paid Rights, the Fully Paid Rights, the Letters of Allocation or the New Shares will be made in the United States. No money, securities or other consideration from any person inside the United States is being solicited and, if sent in response to the information contained in this announcement, will not be accepted.

This announcement does not constitute an offer of Nil Paid Rights, Fully Paid Rights, Letters of Allocation, New Shares or Provisional Allotment Letters to any person with a registered address in, or who is resident in, Australia, Canada or Japan. None of the Nil Paid Rights, the Fully Paid Rights, the Letters of Allocation, the New Shares, the Provisional Allotment Letters or the Forms of Instruction has been or will be registered under the relevant laws of any state, province or territory of Australia, Canada or Japan. Subject to certain limited exceptions, none of the Prospectus, the Provisional Allotment Letters, the Forms of Instruction or this announcement will be distributed in or into Australia, Canada or Japan. The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe such restrictions.

Greenhill, which is authorised and regulated in the United Kingdom by the FSA, is acting as sole sponsor and financial adviser for the Company and no one else in connection with the Rights Issue and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Rights Issue and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for giving advice in connection with the Rights Issue, the contents of this announcement and the accompanying documents or any other transaction, arrangement or matter referred to herein or therein.

Each of the Banks (other than Greenhill), each of which (apart from BNP Paribas, Rand Merchant Bank, Standard Chartered and the SA Sponsor) is regulated and authorised in the United Kingdom by the FSA, is acting exclusively for the Company and for no-one else in connection with the Rights Issue and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Rights Issue and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients or for providing advice in connection with the Rights Issue or any other transaction, arrangement or matter referred to herein.

The Banks may, in accordance with applicable legal and regulatory provisions, engage in transactions in relation to Nil Paid Rights, Fully Paid Rights, Letters of Allocation, Existing Shares and/or New Shares and/or related instruments for their own account for the purpose of hedging their underwriting exposure (if any) or otherwise. Moreover, subject to the terms of the Underwriting Agreement, the Underwriters, or any affiliate thereof acting as an investor for its or their own account(s) may subscribe for, retain, purchase or sell Nil Paid Rights, Fully Paid Rights, Provisional Allotment Letters, Letters of Allocation and/or New Shares and/or related investments for its or their own account(s) and in that capacity may offer or sell such securities and/or other investments otherwise than in connection with the Rights Issue. Accordingly, references in this document to New Shares being offered or placed should be read as including any offering or placement of New Shares to each of the Underwriters or any of their affiliates acting in such capacity. The aforementioned entities do not intend to disclose the extent of any such investments or transactions otherwise than in accordance with any applicable legal or regulatory requirements.

This announcement includes forward-looking statements within the meaning of the securities laws of certain jurisdictions. These forward-looking statements include, but are not limited to, statements other than statements of historical fact including without limitation, those regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Company's results of operations, financial condition, prospects, growth, strategies and the industry in which the Company operates. Forward-looking statements are typically identified by the use of forward-looking terminology such as "believes", "expects", "may", "will", "could", "should", "intends", "estimates", "plans", "assumes" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. By their nature, forward-looking statements involve risks and uncertainties, including, without limitation, the risks and uncertainties to be set forth in the Prospectus, because they relate to events and depend on circumstances that may or may not occur in the future; actual events or results may differ materially from those expressed in or implied by these statements as a result of risks and uncertainties facing the Company and its subsidiaries. Many of these risks and uncertainties relate to factors that are beyond the Company's ability to control or estimate precisely, such as changes in future market conditions, currency fluctuations, the behaviour of other market participants, the actions of governmental regulators and other risk factors such as changes in the political, social and regulatory framework in which the Company operates or in economic or technological trends or conditions, including inflation and consumer confidence, on a global, regional or national basis. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed or implied in such forward-looking statements. The forward-looking statements contained in this announcement speak only as of the date of this announcement and the Company undertakes no duty to update any of them publicly in light of new information or future events, except to the extent required by applicable law, the Prospectus Rules, the Listing Rules and the Disclosure and Transparency Rules.

No statement in this announcement is intended as a profit forecast or a profit estimate and no statement in this announcement should be interpreted to mean that earnings per Ordinary Share for the current or future financial years would necessarily match or exceed the historical published earnings per Ordinary Share. Prices and values of, and income from, shares may go down as well as up and an investor may not get back the amount invested. It should be noted that past performance is no guide to future performance. Persons needing advice should consult an independent financial adviser.

This announcement should not be considered a recommendation by any of the Banks or any of their respective directors, officers, employees, advisers or any of their respective affiliates in relation to any purchase of or subscription for securities. No representation or warranty, express or implied, is given by or on behalf of any of the Banks or any of their respective directors, officers, employees, advisers or any of their respective affiliates or any other person as to the accuracy, fairness, sufficiency or completeness of the information or the opinions or the beliefs contained in this announcement (or any part hereof). None of the information contained in this announcement has been independently verified or approved by any of the Banks or any of their respective directors, officers, employees, advisers or any of their respective affiliates. Save in the case of fraud, no liability is accepted by any of the Banks or any of their respective directors, officers, employees, advisers or any of their respective affiliates for any errors, omissions or inaccuracies in such information or opinions or for any loss, cost or damage suffered or incurred howsoever arising, directly or indirectly, from any use of this announcement or its contents or otherwise in connection with this announcement. No person has been authorised to give any information or to make any representations other than those contained in this announcement and, if given or made, such information or representations must not be relied on as having been authorised by the Company, any of the Banks or any other person. Subject to the Listing Rules, the Prospectus Rules and the Disclosure and Transparency Rules, the issue of this announcement shall not, in any circumstances, create any implication that there has been no change in the affairs of the Group since the date of this announcement or that the information in it is correct as at any subsequent date.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

This announcement has been prepared for the purposes of complying with applicable law and regulation in the United Kingdom and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of the United Kingdom.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN OR ANY OTHER JURISDICTION WHERE THE RELEASE, PUBLICATION OR DISTRIBUTION OF THIS ANNOUNCEMENT IS NOT PERMITTED BY APPLICABLE LAW OR REGULATION

9 November 2012

LONMIN PLC

9 FOR 5 RIGHTS ISSUE OF UP TO 365,503,264 NEW SHARES AT 140 PENCE OR ZAR 19.4872 PER NEW SHARE

INTRODUCTION

On 30 October 2012, Lonmin announced that it proposed to undertake a Rights Issue to strengthen the Company's financial position and significantly reduce its net indebtedness. The Rights Issue, which is conditional on, amongst other things, Shareholder approval, will be made to all Qualifying Shareholders on the terms set out in the Prospectus and will be on the basis of 9 New Shares at 140 pence per New Share or, in the case of Qualifying South African Shareholders, ZAR 19.4872 per New Share, for every 5 Existing Shares held on the relevant Record Date by Qualifying Shareholders. The Rights Issue, which is expected to raise gross proceeds of US$817 million will involve the issue of up to 365,503,264 New Shares, representing approximately 180 per cent. of the Company's share capital in issue as at the date of this announcement.

The UK Issue Price of 140 pence per New Share represents a 44.4 per cent. discount to the theoretical ex-Rights price based on the closing middle market price of 452.8 pence per Share, and a 69.1 per cent. discount to the closing middle market price, in each case on 8 November 2012, the last business day prior to the date of announcement of the terms of the Rights Issue. The SA Issue Price of ZAR 19.4872 per New Share represents a 45.0 per cent. discount to the theoretical ex-Rights price based on the closing price of ZAR 64.22 per Share, and a 69.7 per cent. discount to the closing price, in each case on 8 November 2012, the last business day prior to the date of announcement of the terms of the Rights Issue.

The Rights Issue is being underwritten (save in respect of those New Shares which the Directors have irrevocably undertaken to take up) by Citi, HSBC, J.P. Morgan Cazenove, Standard Bank, BNP Paribas, Investec, Rand Merchant Bank and Standard Chartered.

The purpose of this announcement is to explain to you the background to and reasons for the Rights Issue and to explain why the Directors consider that the Rights Issue is in the best interests of the Company and Shareholders as a whole and why the Directors recommend that Shareholders vote in favour of the Resolution to be proposed at the General Meeting on 19 November 2012 at 9:30am (London time) to facilitate the Rights Issue. This announcement contains extracts from the Prospectus, which extracts are qualified and/or contextualized by, and should be read with, the Prospectus.

BACKGROUND TO AND REASONS FOR THE RIGHTS ISSUE

Introduction

(i) Lonmin's business

Lonmin is the third largest primary producer of platinum, with mines located in the world's largest productive PGM deposit, the Bushveld Complex in South Africa. The Company's mineral resources provide a source of supply that is expected to last for decades at current and anticipated future rates of mining. Lonmin operates a vertically integrated business model and is one of only four "mine-to-market" primary PGM producers. Over the last few years, the management team has been implementing a well-defined operational improvement strategy which has resulted in, amongst other things, improved development of available ore reserves, significant improvements in the performance and operational stability of the process division, the addition of new smelter capacity, and an improvement in mined grades. In addition, prior to the Events at Marikana (as defined below), the management team had been implementing an investment strategy to increase safely its level of PGM production and sales, in order to improve per-unit production cost efficiency and deliver more PGMs into a market which the Directors expect to grow over the long term.

(ii) The Events at Marikana

On 10 August 2012, approximately 3,000 rock drill operators employed by Lonmin commenced an unlawful work stoppage and protest march at the Company's Marikana mine operations. This was followed by significant levels of violent intimidation of non-striking workers, with eight employees, including two security guards as well as two policemen, killed in the initial days of the unlawful work stoppage. As a result, in subsequent days the vast majority of the Company's 24,000 mine workers were absent from work and it was no longer possible to maintain production. Tragically the violence and unrest escalated materially throughout that week and in total 46 people, including 40 Lonmin employees, lost their lives.

The Board was deeply saddened by the violent unrest which took place during this time and continues to express its profound sympathy to those affected, including the families, friends and colleagues of those who died. The Company has committed to establish and contribute to a Memorial Fund for the benefit of the families of the deceased, the central purpose of which is to fund the education of their children.

The Company then worked resolutely to resolve the tensions within the various factions of the workforce in order to create an environment where a return to work was possible.

On 18 September 2012, following an all-inclusive negotiation process facilitated by the Commission for Conciliation, Mediation and Arbitration involving the Company, trade unions, the South African Council of Churches, the Department of Mineral Resources (the "DMR"), the Department of Labour and delegates of striking employees, the September 2012 Wage Addendum was signed by the Company, the National Union of Mineworkers, the Association of Mineworkers and Construction Union, Solidarity and United Association of South Africa and representatives of the delegates of striking employees, which agreed on a return to work with effect from 20 September 2012.

On 20 September 2012, 81.4 per cent. of Lonmin's employees returned to work and the initial focus of the Company was to ensure a safe resumption of production. As a result, it was not until 1 October that the normal mine shift pattern was re-established and blasting across the property restarted. Since then employee attendance has continued at levels regarded by the Board as normal for Lonmin's business, taking into account scheduled leave, sickness and other reasons for absence. As at the Latest Practicable Date, all concentrators are now in production except for the Number One UG2 plant, which is down for a planned upgrade. The Number One and Number Two smelters are fully operational, as are the Base Metals Refinery and the Precious Metals Refinery. The first platinum ounces were turned out by 31 October.

(iii) Response to changing circumstances

Prior to the Events at Marikana, the Board had commenced a review of Lonmin's growth strategy, future production profile and capital investment programme as a result of the emerging weak short-term demand outlook for PGMs and the weak short-term pricing environment. The Directors believe that a sustained rise in the prices of PGMs in general, and platinum in particular, has been held back by the fragile state of the auto markets (particularly in Europe), the Company's largest end market, and by a degree of oversupply from PGM producers who have found it difficult to materially reduce immediate production and who, the Directors believe, have instead sought to preserve financial capacity by reducing capital expenditure intended to support future production.

The Events at Marikana, and subsequent strike action at almost all other South African PGM producers have, given the importance of South African producers to global PGM production, in a short space of time altered the outlook for the supply side of the PGM industry. These events have increased operating costs for Lonmin and other companies in the South African PGM mining industry, while at the same time creating supply constraints which have contributed to an increase in PGM prices. The Board believes that the disruption to the South African PGM mining industry is also likely to result in some capacity reductions as higher cost operations are forced to reduce output or close down, which the Board believes should sustain improved pricing for PGMs.

In light of the Events at Marikana and the resulting adverse impact on cash flow, and together with the ongoing challenging trading environment, the Board has completed a further thorough review of Lonmin's strategy and capital structure. The Board has concluded that reducing Lonmin's cost base and capital expenditure in the near term, whilst raising additional equity, in conjunction with entering into the Amended Facilities, is the best route to achieving a more appropriate and robust capital structure with greater financial flexibility. The Board also believes that the Rights Issue is necessary to address the risk of the Group breaching financial covenants in its existing facilities when they are tested in relation to the Company's interim results for the six months ended 31 March 2013, which the Directors believe may happen unless the Rights Issue is completed and the Amended Facilities (which are conditional on the Rights Issue) come into effect. The consequences of a breach of covenant by the Group could be extremely serious.

The Directors believe that the Rights Issue will enable Lonmin to continue to exploit its long-life, high-quality ore resources at Marikana and benefit from what the Directors believe are positive longer-term fundamentals for platinum and other PGMs, for the benefit of Shareholders.

Lonmin's fundamental strengths

(i) Operations located in the world's premier PGM deposit

Lonmin's operations are located in the world's premier PGM deposit, the Bushveld Complex in South Africa, which contains nearly 80 per cent. of the world's known PGM resources and accounts for a significant majority of the global supply of PGMs, especially the two most valuable in terms of price, platinum and rhodium.

(ii) Long-life mineral resource base backed by long-term New Order Mining Rights

Lonmin has a long-life mineral resource base backed by long-term New Order Mining Rights. As at 30 September 2012, the Company had 175.2 million ounces of mineral resources, including 41.3 million ounces of mineral reserves of platinum, palladium, rhodium and gold. The Company's mineral resources provide a source of supply that is expected to last for decades at its current and anticipated future rates of mining. All of the Company's Marikana operations hold fully converted New Order Mining Rights granted by the DMR. Those relating to the Company's future generation of shafts are valid until 2037, with a right to apply for renewal thereafter for periods of up to a further 30 years at a time.

(iii) Significant inherent value in existing infrastructure and mineral reserves

Lonmin actively manages its assets through the commodity cycle, and has historically placed certain shafts on care and maintenance when mining such shafts is not profitable. Despite these short-term tactical decisions, the Directors regard these assets as key to realising the longer-term value of Lonmin's mineral reserves and mineral resources and believe that the replacement cost of both above and below-ground assets is very high. The Company's mining infrastructure at Marikana has seen considerable investment in recent years, with approximately US$1.3 billion of capital expenditure incurred in the four financial years ended 30 September 2012. The Directors believe that the significant investment that has been made in developing ore reserves and additional mine shaft hoisting capacity to enable future growth provides the Company with a degree of operational flexibility which should enable it to increase production in the event that market conditions improve in the short term. In addition, this expenditure has resulted in a more robust and efficient Process Division.

(iv) Attractive long-term fundamentals for PGM markets, despite short-term volatility

In the short term, the Directors believe that PGM prices will remain volatile whilst economic uncertainty prevails, but over the medium and longer term industry dynamics remain favourable. In particular, the Directors believe that the following factors could underpin an improvement in PGM prices:

-- the Directors believe that primary supply of PGMs is likely to contract in the short term, primarily as a result of the recent and on-going labour unrest in South Africa, which historically and currently accounts for approximately 75 per cent. of global primary mine supply;

-- there is a positive medium-term outlook for vehicle sales in the US and Chinese markets that will likely increase demand for PGMs for utilisation in autocatalysts;

-- auto and non-road emissions legislation is increasing in scope and becoming more stringent (including in Europe through the Euro VI emissions legislation, which comes into effect on 1 January 2014), which the Directors believe will result in higher loadings of PGM per vehicle catalyst; and

-- despite downgrades to Chinese growth expectations, consumer expenditure in China is still expected to increase over the near and medium term, which suggests that jewellery sales will remain stable in the near term.

Following the Events at Marikana and other developments in South Africa, the Directors believe that the moderate platinum market deficit previously estimated by the Company will increase in 2013, before a supply-side response in the industry will likely result in this deficit returning to current estimated deficit levels by 2016. By way of comparison, a platinum market surplus persisted from 2008 to 2012.

(v) Maximising value through vertical integration

Lonmin is able to maximise value through vertical integration as one of only four integrated "mine-to-market" primary PGM producers. Through producing refined metals rather than intermediate products such as concentrates, the Directors believe that the Company is able to enhance operating margins by carrying out each value-adding step from mining ore to refining the finished metal, so that it is not required to surrender this margin to third-party refiners. The Company also gains insight into end-market trends and developments from its longstanding relationships with key industrial customers which would not otherwise be available. The capital investment required to replicate the chain of concentrators, smelters and refineries would be considerable to any new entrant or non-vertically integrated producer, and certain technical steps require either the use of proprietary intellectual property or other know-how gained from many years' experience of operating these plants.

(vi) Operational gearing

Lonmin's operational gearing arises from its relatively high proportion of fixed as opposed to variable costs. As a result, once production and sales of finished metal have reached levels which provide revenue to cover the fixed cost base, any incremental sales become highly profitable for the Company. By comparison, financial exposure to PGM prices through purchases of ETFs or physical metal do not provide the advantages which can accrue to the Company at higher production levels because of this operational gearing.

(vii) Industry-leading expertise in processing UG2 ore

The Western Limb of the Bushveld Complex contains two reefs of ore, known as UG2 and Merensky, which have differing mineralogical properties. The UG2 ore in the Company's principal mining areas in the Bushveld Complex is generally of a higher grade than Merensky ore in the same mining areas, and occurs over a greater width, making this ore easier to extract. Over the last 20 years, the Company has predominantly mined the UG2 reef rather than the Merensky reef, with UG2 ore typically comprising approximately 70-75 per cent. of the Company's total mine production. Accordingly, the Directors believe that the Company is an industry leader in overcoming the mineralogical and metallurgical challenges of processing UG2 ore, which is more difficult to smelt, and has also recently been generating additional revenue for the chrome extracted from this ore. By contrast, its major competitors in the Bushveld Complex have generally focused on the Merensky reef, and are now facing the need to shift their operations to the UG2 reef as their Merensky reef mineral resources become depleted.

(viii) Excellence in processing

The Company has materially improved the performance and resilience of its processing plants over recent years. The concentrators are now achieving levels of PGM recoveries among the highest in their history and, following the chrome sales agreements entered into in 2010, Lonmin has been able to open the first of a series of tailings retreatment plants to extract further PGMs from waste material returned by the Company's chrome-processor partners. The Company has not experienced any material disruptions in the operation of its main smelting furnace, Number One Furnace, since June 2010 and, in July 2012, the first matte was tapped from the new Number Two Furnace, which uses well-established smelting technology and is expected to reduce the risk profile of the Company's smelting operations yet further. The BMR and PMR have been the subject of significant and continuing management attention and are delivering strong performance following the initiatives undertaken.

(ix) Mining operations at shallower depths than competitors

Lonmin mines at a shallower average depth than its competitors. Greater mining depths generally imply higher costs due to increased cooling requirements, higher electricity consumption and higher capital costs. As a result, there is an increasing cost advantage to those whose mining operations are at shallower depths, especially as energy prices rise. The deepest point currently reached in the Company's operations is 1,331 metres below surface, and the average depth of current mining activities is approximately 400 metres below surface. The Directors believe that this average depth is shallower than that of the Company's principal peers and competitors in South Africa.

(x) An experienced management team with a strong track record

The Directors believe that the Company benefits from the wealth of directly relevant experience shared by its Executive Directors and Senior Executives. The Company's management team possesses wide-ranging expertise, from exploration through to the development and operation of mines and downstream processing facilities, as well as experience in managing the support services necessary to run such operations successfully. Ian Farmer, the Company's Chief Executive Officer, has been employed by the Company for 26 years. Simon Scott, the Company's Chief Financial Officer and Acting Chief Executive Officer, has held a number of senior financial management roles in South Africa with local and global employers, including a total of nine years with Anglo American. The Directors believe that the current management team has developed a thorough understanding of the characteristics of Lonmin's mineral deposits and the ability to drive efficiencies in the exploration and exploitation of its mineral reserves and mineral resources.

Following the appointment of Ian Farmer as Chief Executive Officer in September 2008, the Company embarked on a significant restructuring of the business, enhancing its cost control, closing loss-making shafts and making significant reductions in the workforce, including approximately one-third of management at the time.

On 16 August 2012, the Company announced that Mr Farmer was diagnosed with a serious illness and in hospital and on 24 August 2012 the Company announced that Mr Scott had been appointed as Acting Chief Executive Officer.

Impact on operations of the Events at Marikana

The Events at Marikana were directly responsible for the loss of mine production estimated at 1.8 million tonnes of ore containing an estimated 110,000 ounces of platinum in the fourth quarter of the year ended 30 September 2012. As the Company was able to maintain operations in the Process Division by processing stockpiles during the Events at Marikana, albeit at a materially reduced level, sales were less heavily impacted. Sales for the 2012 financial year were 701,831 platinum ounces, 2.6 per cent. lower than the 720,783 ounces achieved in the 2011 financial year, and PGM sales were 3.6 per cent. lower than the prior year at 1,383,945 PGM ounces, despite benefiting from the depletion of stocks in the pipeline. The loss of sales contributed to an increase in unit costs during the year ended 30 September 2012 relative to the prior year. The processing of the Group's stockpiles has resulted in these being largely depleted and, as described above, the impact of the Events at Marikana will continue to be felt in the 2013 financial year, as some production will be used to refill the Process Division pipeline and replenish stockpiles rather than flowing through to sales.

Lonmin's operational exposure to PGM pricing and foreign exchange movements

Lonmin's policy is not to hedge commodity price exposure on PGMs, excluding gold, and therefore any change in prices has a direct effect on the Group's trading results. The approximate effects on the Company's operating profit of a 10 per cent. movement in the average metal prices achieved by the Group in the year ended 30 September 2012 for platinum (US$1,517 per ounce), palladium (US$630 per ounce) and rhodium (US$1,274 per ounce), the three highest revenue-generating PGMs to the Company's business, would be as follows:

 
                                                                      Platinum           Palladium             Rhodium 
                                                           -------------------  ------------------  ------------------ 
 
 Underlying operating profit in the year ended 30 
 September 2012                                             +/- US$106 million   +/- US$21 million   +/- US$15 million 
                                                           -------------------  ------------------  ------------------ 
 

These sensitivities are estimated calculations based on costs and volumes in the period and assume all other variables, including foreign exchange rates, remain constant.

In addition to Lonmin's operational gearing to PGM commodity prices, the Company's trading results are sensitive to fluctuations in foreign exchange rates, specifically between the US dollar and the Rand. The majority of the Group's revenues are derived from sales denominated in US dollars, while the majority of the Group's operating costs, capital expenditure and taxes are paid in Rand. Therefore, a strengthening of the Rand against the US dollar has an adverse effect on profits and margins. By way of example of the approximate impact on the Group's profitability of movements in the Rand to US dollar exchange rate, a 10 per cent. movement in the Rand to US dollar average and closing exchange rates in the year ended 30 September 2012, which were ZAR8.05 and ZAR8.30 respectively, would have impacted the Company's underlying operating profit in the same period by (+/-) US$117 million. These sensitivities are based on PGM prices, operating costs and volumes in the 2012 financial year and assume all other variables remain constant.

Lonmin's actions to increase productivity, reduce costs and conserve capital

(i) Focus on safe and profitable mining

During the 2012 financial year, the market price of PGMs has been volatile, in large part due to general global macro-economic conditions, with the depressed environment in the Eurozone having a particular impact on the price of platinum. Prior to the Events at Marikana, the Board had commenced a review of Lonmin's growth strategy, future production profile and capital investment programme as a result of the emerging weak short-term demand outlook for PGMs and the weak short-term pricing environment.

At the time of its full year results for the 2011 financial year, Lonmin provided guidance on its planned capital expenditure of around US$450 million for the 2012 financial year, based on the then outlook for PGM markets. This guidance was reiterated at the time of publication of the Company's interim results in May 2012, recognising the uncertain near-term outlook for PGM prices (the price of platinum had fallen from a 2012 peak of US$1,722 per ounce on 28 February 2012 to US$1,440 by the time of publication of the Company's interim results on 14 May 2012), and stating the Company's intention to defer future capital expenditure if appropriate.

By the time of publication of the Third Quarter Production Report on 26 July 2012, the platinum price had remained below US$1,500 per ounce for more than eleven weeks, and Lonmin acknowledged that the weak pricing environment was likely to persist for longer than anticipated. As a result, the Company announced that capital expenditure would be reduced to around US$430 million in the 2012 financial year (reflecting the proximity of the year end and the lead-time relating to capital expenditure programmes), and to around US$250 million in each of the 2013 and 2014 financial years. This reduction would be achieved principally through the deferral of capital spend on the Hossy, K4 and Saffy shafts, as well as the optimisation of some of the processing projects. As a result of the Events at Marikana, Lonmin further announced on 17 September 2012 that, as part of its ongoing capital expenditure review, it would be moving its K4 shaft to care and maintenance and that it had given notice to terminate its contract with Murray and Roberts, the contractor which supplied approximately 1,200 staff at the K4 shaft with effect from 17 October 2012.

The Board maintains a close focus on the outlook for PGM markets and intends to bring the K4 shaft back into production in the latter part of the 2014 financial year, in order to help deliver the Company's production targets and in anticipation of improvements in demand for, and pricing of, PGMs. The K4 shaft, therefore, remains a key part of the Company's longer-term growth plans.

(ii) Realising alternative forms of value

In the 2011 and 2012 financial years Lonmin, together with its partners Xstrata and ChromTech, successfully developed a series of chrome and tailings treatment plants at various of Lonmin's Marikana operations including the Rowland, K4, Karee B and Easterns sites. The chrome plants achieved chrome sales of 730,278 tonnes and 1,209,643 tonnes in the 2011 and 2012 financial years, respectively. The tailings treatment plants, which were operational for the second half of the 2012 financial year, helped to improve Lonmin's PGM recoveries by 0.8 per cent. in that year. Overall, the chrome sales and improved PGM recoveries which have resulted from this initiative generated additional profit for Lonmin of US$11.3 million in the 2012 financial year.

In addition, in March 2012, the Company took advantage of a historically high gold price by entering into a pre-paid sale of 70,700 gold ounces to be delivered over a period of approximately 54 months resulting in a one-off cash inflow of US$107 million. The average gold price in March 2012 was US$1,674 per ounce, compared to an average gold price for the year to the Latest Practicable Date of US$1,665 per ounce, and an average gold price for the last 3 years to the Latest Practicable Date of US$1,459 per ounce. It remains the Company's policy not to hedge the price of its core PGM commodities.

The Lonmin Renewal Plan

In light of the Events at Marikana, the focus of and priority for the Company during the 2013 financial year is to return productivity levels safely back to, and then above, the run-rates achieved prior to those events and to improve relationships with employees. Part of this will require implementing sustainable inclusive collective bargaining structures that facilitate wage agreements that are accepted by all the relevant stakeholders to be binding. Lonmin has announced plans to target production at Marikana of around 680,000 platinum ounces of metal in concentrate in the year ending 30 September 2013, although platinum sales for the year ending 30 September 2013 are expected to be around 660,000 ounces as in-process inventory levels are rebuilt within the Process Division. The ramp-up back to these normalised levels of productivity is so far progressing better than planned and the Directors fully expect the Marikana operations to be operating at previously achieved productivity run-rates during the third quarter of the 2013 financial year.

The Board intends to continue to monitor developments in PGM market conditions closely and may accelerate or delay planned investment if it deems doing so to be in the best interests of Shareholders.

The projections and forward-looking statements in this announcement are not guarantees of future performance and actual results and events could differ materially from those expressed or implied by these forward-looking statements. Numerous factors could cause or contribute to such differences. Please refer to the part of the Prospectus entitled "Risk Factors" and the section headed "Forward-looking statements" in the part of the Prospectus entitled "Important Information".

(i) Future platinum sales in the Lonmin Renewal Plan

Beyond the 2013 financial year, the Company is continuing to target growth in production which the Directors believe will result in an improvement to its relative position on the cost curve. On the basis of the Lonmin Renewal Plan, the Directors are targeting sales in excess of 750,000 platinum ounces in each of the 2014 and 2015 financial years, and in excess of 800,000 platinum ounces per annum by the 2016 financial year. K4, which when at full capacity will be one of Lonmin's largest shafts and which is currently on care and maintenance, is expected to restart mining operations in the latter part of the 2014 financial year although the impact on production will initially be gradual until capital expenditure levels increase. This revised growth profile reflects both the anticipated short-term demand outlook for PGMs, and the impact on Lonmin's operations of the Events at Marikana.

However, the Directors believe that the significant investment that the Company has made in developing ore reserves and additional mine shaft hoisting capacity to enable future growth provides the Company with a degree of operational flexibility, which should enable it to increase production in the event that market conditions improve in the short term. By way of example, as at 30 September 2012, the Company had immediately available ore reserves equating to approximately 18 months of mining, which the Directors believe to be a prudent level. The Company's planned capital expenditure over the next two financial years is expected at least to maintain this level of ore reserve availability.

(ii) Future capital expenditure in the Lonmin Renewal Plan

In order to achieve the targeted level of production Lonmin expects to invest approximately US$175 million for the 2013 financial year and approximately US$210 million for the 2014 financial year (depending on the Rand/US dollar exchange rate). Of the aggregate capital expenditure planned for the 2013 and 2014 financial years, approximately US$260 million relates to the Mining Division with the balance relating to the Process Division and to spend as part of the Company's social and labour plan commitments. In the 2015 and 2016 financial years, the Directors expect that capital expenditure will rise to around US$400 million per annum (depending on the Rand/US dollar exchange rate). The step-up in capital expenditure from 2015 onwards primarily relates to further development in Hossy, Saffy and K4 in order to support the increased production levels and processing projects. However, the increase in capital expenditure in the 2015 and 2016 financial years is contingent upon performance in the earlier years and the Directors believing, at that time, that there is sufficient market demand and sufficiently attractive pricing for PGMs to warrant the increased investment. The thresholds in the financial covenant linked to capital expenditure within the Amended Facilities described below, which may or may not be tested, have been set at approximately 10 per cent. above the budgeted levels of capital expenditure outlined above.

(iii) Future cost profile in the Lonmin Renewal Plan

The Events at Marikana have created two specific cost pressures for the Company in the 2013 financial year. First, the agreement entered into with the trade unions and worker representatives increased the wages paid to Lonmin's workers employed in the Category 3-9 bargaining units by about 14 per cent. from 1 October 2012, which includes the wage increase of 9 per cent. due under the existing wage agreement signed in 2011. As a result, employment costs overall will increase by approximately 11 per cent. in the 2013 financial year against normalised employee costs in the 2012 financial year. Secondly, there is inefficiency inherent in any production ramp-up, as the business bears the full costs of operations, but does not achieve full production in the early stages of that ramp-up. As a result, the Directors anticipate unit costs of around ZAR 9,350 per PGM ounce produced for the 2013 financial year.

A number of measures are in place, or are expected to be implemented during the 2013 financial year, both to address the pressures of gross cost increases and also to improve the effectiveness of the Company's expenditure. These measures include:

-- A review of the Company's operating model, as well as management structure, to align with the Lonmin Renewal Plan is expected to yield savings in excess of ZAR200 million per annum, on an annualised basis, with the full effect from 2014 onwards;

-- A procurement initiative known as "Total Cost of Ownership" is being implemented which is expected to yield savings of ZAR100 million in the second half of the 2013 financial year and in each subsequent financial year thereafter; and

-- The Company has already completed and embedded a productivity enhancement programme known as "Line of Sight" and "Mission Directed Work Teams", which will form the foundation for a series of further productivity and optimisation initiatives in the 2013 financial year. Team effectiveness training trials at various shafts in the Karee mining unit during the 2012 financial year have shown the potential of this initiative, which will be extended across Lonmin during the 2013 financial year. This will be supported by improved systems and training, particularly for supervisory management.

The Directors believe that, taken together, these initiatives have the potential to improve the productivity performance of the Company.

The Directors expect that over the medium to longer term, the Company's earliest generation of shafts will reach the end of their economic lives as their mineral reserves are depleted. However, the Company has, over the past several years, undertaken a number of capital projects, principally at its second generation of shafts, K3, Hossy, Saffy and K4, which, when fully ramped up should drive production growth and improve its relative unit cost position.

Taken together, the cost savings, volume-related operational benefits and efficiencies anticipated in the Lonmin Renewal Plan lead the Directors currently to expect that unit costs for the 2014 financial year will increase by less than wage inflation in South Africa.

This is predicated on there being no further significant disruption to the Company's operations and all other cost increases being in line with recent market norms.

(iv) Lonmin's approach to social licence

The Board is of the view that delivering on transformation and social responsibility obligations is an essential element of Lonmin's licence to operate in South Africa, both legally in terms of its obligations under the Mining Charter and morally as a good corporate citizen of the country. Lonmin has transformation goals which were established in line with the Mining Charter and are aligned to its Social Labour Plan commitments. The Company has worked with determination to accomplish the goals it has set and has made significant achievements in many areas, notably in its education programmes for its communities, in the number of HDSA employees within its management structures, which now stands at 36 per cent. (excluding white women), and in its initiatives to procure from HDSA managed and owned suppliers. Lonmin's gender related policies and procedures designed to increase the participation of women in the Company have had some success, with the number of women at the Company having grown by 66 per cent. since 2007, but there are still challenges in order to meet its 2014 commitments.

Nevertheless, the Directors recognise that the Company has delivered more slowly in other areas. The Events at Marikana and recent strikes across the entire mining industry make it clear that Lonmin must continue and, where necessary, accelerate its efforts in some initiatives, working more closely and cooperatively with key stakeholders, particularly employees and local and central government and communities. Two particularly relevant areas of focus are housing and the Company's relationship with its communities.

Housing is the hardest task the wider mining sector faces in terms of targets it has been set. Lonmin is far from alone in trying to deal with what is a national problem in South Africa.

Lonmin's housing strategy has comprised three elements: hostel conversion, Marikana housing ownership and the long-term housing programme. To date, the Company has converted 79 of the 128 old-style hostels into 931 single person occupancy and 580 family units and has a detailed plan to convert the remaining blocks by 31 December 2014. The Company has also seen 242 employees and community members become owners of homes, sold through the Marikana Housing Development Company.

The challenge however is in facilitating the provision of mass affordable employee accommodation particularly for the Company's migrant workforce. The Events at Marikana have highlighted the critical shortage of affordable housing as a major challenge for Lonmin and the South African nation more broadly, reflecting the need for a solution that involves all stakeholders, including government, mining companies and employees. Management is engaging with employees and all stakeholders as necessary to understand better their requirements as part of developing a framework for a sustainable and fundable solution. The Company recognises there will be a cost to this and will develop appropriate budgets in due course.

The partnership Lonmin has with the Greater Lonmin Community where its operations are based is important to the Company. For over 18 years, the Company has paid royalties into a trust fund on behalf of the Bapo ba Mogale tribal community. The amount of funds paid over to date is approximately ZAR371 million. The Company has in recent times seen the benefits of its long-term investment in education and health through improved examination results and various health initiatives. There is still much to be done and Lonmin needs to work more closely with its communities to improve dialogue and rebuild trust as this will be key to enhancing better relations with them. Lonmin's management team will be focusing on this in the coming months.

Lonmin's actions to improve financial flexibility

(i) Existing Facilities Agreements

During the first half of 2011, Lonmin entered into new facility agreements (the "Existing Facilities Agreements") pursuant to which it obtained approximately US$929 million equivalent (based on a Rand/US dollar exchange rate of ZAR8.66 at 31 October 2012) of new credit facilities (the "Existing Facilities") with its group of lending banks, comprising:

-- a US$700 million syndicated US Dollar facilities agreement (the "US Dollar Facilities Agreement"), comprising a US$300 million term loan facility (the "US Dollar Term Loan") and a US$400 million revolving credit facility (the "US Dollar Revolving Credit Facility", and together with the US Dollar Term Loan, the "US Dollar Facilities"); and

-- three South African Rand bilateral facilities agreements of ZAR660 million each (together, the "Rand Facilities Agreements").

The financial covenants in the US Dollar Facilities Agreement require a maximum net debt / EBITDA ratio of 4.0 times, and a minimum EBITDA / net interest ratio of 3.5 times, calculated at the Group level. The financial covenants in the Rand Facilities Agreements require a maximum net debt / EBITDA ratio of 3.5 times, and a minimum EBITDA / net interest ratio of 3.5 times, calculated at the WPL and EPL levels. Each of these financial covenants is tested at 30 September and 31 March in each financial year.

The financial covenants in the Existing Facilities Agreements have come under increasing pressure as a result of the weak PGM price environment and the Events at Marikana. In addition, the Directors believe that these covenants do not provide the Group with sufficient financial flexibility in a volatile price environment and that they do not adequately reflect the security provided by Lonmin's significant asset backing through its mineral resource base and operational infrastructure. The Directors have therefore entered into amended credit facilities agreements (the "Amended Facilities Agreements") with the Group's lenders.

(ii) Amended Facilities Agreements

The Amended Facilities Agreements will only come into effect if the Resolution is passed, the Rights Issue is completed and raises at least US$700 million of net proceeds by 31 December 2012 and such net proceeds are used to (i) cancel and prepay in full amounts outstanding under the US Dollar Term Loan; and (ii) (to the extent of the remaining net proceeds of the Rights Issue) prepay all amounts outstanding under the US Dollar Revolving Credit Facility, provided that the US Dollar Revolving Credit Facility will remain available to be re-drawn following such prepayment, albeit subject to amended terms. If the US Dollar Facilities have been prepaid in full, then the terms of the Rand Facilities will be amended to reflect an equivalent financial covenant package as has been negotiated in terms of the US Dollar Facilities Amendment Agreement and amounts outstanding under the Rand Facilities may be prepaid with the excess proceeds of the Rights Issue.

The principal amendments to the Existing Facilities Agreements are to remove the net debt/EBITDA and EBITDA/net interest covenants and to substitute the following financial covenants into each of these agreements:

   --      consolidated tangible net worth will not be less than US$2,250 million; 
   --      consolidated net debt will not exceed 25 per cent. of consolidated tangible net worth; and 
   --      if: 

-- in respect of the amended US Dollar Facilities Agreement, the aggregate amount of outstanding loans exceeds US$75 million at any time during the last 6 months of any test period; or

-- in respect of both the amended US Dollar Facilities Agreement and the amended Rand Facilities Agreements, consolidated net debt exceeds US$300 million as of the last day of any test period,

the capital expenditure of the Group must not exceed the limits set out in the table below, provided that, if 110 per cent. of budgeted capital expenditure for any test period ending on or after 30 September 2013 is lower than the capital expenditure limit set out in the table below for that test period, then the capital expenditure limit for that test period shall be equal to 110 per cent. of such budgeted capital expenditure.

 
                                    Capital Expenditure Limit 
 Test Period                                  (ZAR) 
---------------------------------  -------------------------- 
 1 October 2012 to 31 March 2013 
  (inclusive)                              800,000,000 
 1 October 2012 to 30 September 
  2013 (inclusive)                        1,600,000,000 
 1 April 2013 to 31 March 2014 
  (inclusive)                             1,800,000,000 
 1 October 2013 to 30 September 
  2014 (inclusive)                        2,000,000,000 
 1 April 2014 to 31 March 2015 
  (inclusive)                             3,000,000,000 
 1 October 2014 to 30 September 
  2015 (inclusive)                        4,000,000,000 
 1 April 2015 to 31 March 2016 
  (inclusive)                             4,000,000,000 
 1 October 2015 to 30 September 
  2016 (inclusive)                        4,000,000,000 
---------------------------------  -------------------------- 
 

(iii) Importance of the Amended Facilities Agreements and target capital structure

Without the Amended Facilities Agreements, which are conditional on completion of the Rights Issue, receipt by the Company of at least US$700 million of net proceeds by 31 December 2012, subsequent prepayment of the US Dollar Facilities as outlined above, and the satisfaction of customary conditions precedent, the Directors believe that the Group may breach either or both of the covenants in the Existing Facilities Agreements when they are tested in relation to the Company's interim results for the six months ending 31 March 2013. The Directors also believe that, for the six months ending 31 March 2013, the Group's leverage ratio is likely to exceed 3.5:1, and in that case, the financial covenants in the Existing Facilities Agreements will be tested on a quarterly (rather than a half-yearly basis) for the next year and the applicable leverage ratio must not exceed 3.5:1 during that period. If the covenants are tested on this basis, the Directors expect that the Group will breach either or both of the net debt/EBITDA and EBITDA/net interest covenants in the Existing Facilities Agreements when they are tested as at 30 June 2013 and that there is a material risk of further covenant breaches at subsequent test dates, in the event that the Rights Issue does not proceed and the Amended Facilities Agreements do not come into effect.

The Directors therefore believe it to be imperative that the Company swiftly puts in place a robust capital structure which can be sustained through the current economic cycle for PGMs.

The Group intends to maintain a low level of financial gearing given the exposure of the business to fluctuations in PGM commodity prices and the Rand/US dollar exchange rate, as well as the need to withstand short-term shocks to the business. The Board believes that the Company's long-life assets should be substantially funded by long-term equity capital, supplemented by free cash flow, with appropriate levels of debt funding available to provide additional financial flexibility for the Group as well as to reduce its overall cost of capital. In this context, the Board views debt financing as providing the flexibility required to fund the Company's normal working capital requirements and to accommodate short-term cash flow volatility inherent in an operationally geared business arising from either or both of movements in the price of PGMs and the Rand/US dollar exchange rate. The Board recognises that the business cannot support significant financial leverage given its high level of operational gearing. In addition, the Board believes that it would be more appropriate for the Group's debt facilities to contain covenants that are linked to capital expenditure and tangible net worth rather than covenants linked to profitability, which in the Board's view do not reflect the significant asset backing that underpins the longer-term credit quality of the Group. The Board therefore believes that entering into the Amended Facilities Agreements, which are subject to the conditions outlined in the previous paragraph, is in all Shareholders' interests.

Black Economic Empowerment

The Company is required to increase HDSA ownership in its prospecting and mining ventures by 31 December 2014 to the 26 per cent. required under the Mining Charter. As at 30 September 2012, HDSA investors directly and indirectly owned 18 per cent. of the share capital of the Company's subsidiaries that own and operate Marikana and Limpopo and that participate in the Pandora joint venture, as well as 26 per cent. of the share capital of its subsidiary that owns Akanani.

The Company's BEE partner, Incwala Resources, is owned as to 50.03 per cent. of its equity by Shanduka. Other equity investors in Incwala Resources include a trust for the benefit of community members, the Industrial Development Corporation of South Africa Limited and Lonmin itself. In considering how best to meet its HDSA ownership requirements by 31 December 2014, the Board believes that one element it must consider is how to achieve further HDSA ownership through a broad-based solution as this will ultimately be in the best interests of Shareholders.

It is possible that the Company may wish to facilitate the creation of trusts for the benefit of current and future employees, and separately for members of the Greater Lonmin Community, to which new Shares could be allotted for their sole economic benefit. In order to achieve this increase in HDSA participation, the Company is considering a range of options involving the issuance of additional Shares which could dilute the interests of Shareholders. The Company has not yet finalised its proposals, and any future transaction would need to be considered on its merits and may require prior Shareholder approval.

Conclusion

The Board remains confident of the longer-term potential of Lonmin, with its high-quality asset base and long-term mining licences, and in the long-term fundamentals of the PGM industry, and its primary focus continues to be on preserving and enhancing value for all Shareholders.

However, in spite of the actions being taken to reduce costs, improve productivity and ration capital expenditure, Lonmin's profitability and cash flows are under pressure and remain highly geared to the PGM pricing environment and Rand/US dollar exchange rate movements. The Events at Marikana resulted in a material reduction in mine production at a time when the Company was not well-positioned to absorb the resulting financial shock.

Against this background the Board has concluded that raising equity now, by way of the Rights Issue, is in the best interests of the Company and Shareholders as a whole.

The Rights Issue is expected to raise approximately US$817 million (in gross proceeds), and will substantially strengthen the Company's financial position. The Board believes the Rights Issue will result in immediate and long-term benefits, and in particular will:

-- allow Lonmin to withstand the shorter-term adverse operational and financial impact of the Events at Marikana and help fund the ramp-up back to normalised production levels;

-- improve Lonmin's ability to withstand potential adverse movements in other external factors, specifically the PGM pricing environment and the Rand/US dollar exchange rate;

-- allow Lonmin to continue to invest in future growth and improve its relative position on the cost curve; and

-- reduce the Group's borrowings and annual interest charge and, alongside the Amended Facilities, provide Lonmin with incremental financial liquidity and more appropriate financial covenants.

MANAGEMENT UPDATE

As previously notified, Ian Farmer, Chief Executive Officer, is undergoing a course of treatment and has been on sick leave since August.

Simon Scott was appointed Acting Chief Executive Officer on 24 August 2012. He has ably handled the extremely difficult circumstances since the Events at Marikana in August and has been strongly supported by his executive team. His operational team of Albert Jamieson, Barnard Mokwena, Mark Munroe and Natascha Viljoen have all worked at Lonmin for many years and have been responsible for the significant improvement in the operational performance of the business that has occurred since 2008.

Roger Phillimore and Mahomed Seedat have joined the Executive Committee, which has responsibility for the day-to-day business of the Company and is chaired by Simon. Mahomed was Chief Operating Officer at Lonmin until the end of 2010. In order to support Simon further, Alan Ferguson, who was Chief Financial Officer until December 2010, has been working with him as a part-time consultant. Mahomed and Alan bring with them an in-depth knowledge of Lonmin which has been invaluable at this challenging time.

The executive team is supported by the Non-Executive Directors, who have considerable recent and relevant experience of the mining industry and South Africa.

The current arrangements are appropriate for the time being and are working well to stabilise the Company and bring production back to normal. The Board keeps under constant and critical review the best way to proceed on a permanent basis and will take the necessary steps as and when it deems them appropriate.

USE OF PROCEEDS

The net proceeds of the Rights Issue will be used to prepay the Group's indebtedness under the Existing Facilities Agreements, including (i) the prepayment in full of amounts outstanding (amounting to US$300 million plus accrued interest and applicable break fees) under the US Dollar Term Loan, which facility will then be cancelled; (ii) (to the extent of the remaining net proceeds of the Rights Issue) the prepayment of amounts outstanding (amounting to US$400 million plus accrued interest and applicable break fees) under the US Dollar Revolving Credit Facility; and (iii) the partial prepayment of amounts outstanding (amounting to ZAR 1,980 million equivalent as at 31 October 2012, which is equivalent to approximately US$229 million (based on a Rand/US Dollar exchange rate of ZAR8.66), plus accrued interest and applicable break fees) under the Rand Facilities Agreements. These prepayments will significantly reduce the Group's indebtedness and substantially strengthen its financial position.

The full amount under the US Dollar Revolving Credit Facility (US$400 million) and the full amount under the Rand Facilities (ZAR 1,980 million) will remain available to be drawn by the Group when required, subject to the terms of the Amended Facilities Agreements.

In addition, a portion of the gross Rights Issue proceeds will be used to pay fees relating to the Rights Issue (approximately US$40 million).

CURRENT TRADING AND PROSPECTS

The Company's published platinum sales target for the 2012 financial year was approximately 750,000 ounces. Platinum sales for the year ended 30 September 2012, at 701,831 ounces, were approximately 93.6 per cent. of the full year target and approximately 2.6 per cent. lower than the 720,783 ounces sold in the 2011 financial year. The sales shortfall compared to the sales target was largely attributable to the Events at Marikana.

PGM prices were under downward pressure in the year ended 30 September 2012, with the Company's average PGM basket price, excluding base metal revenue, during the 2012 financial year declining by 15.7 per cent. to US$1,095 per ounce from US$1,299 per ounce in the 2011 financial year and the average price of platinum during the 2012 financial year declining by 14.2 per cent. to US$1,517 per ounce from US$1,769 per ounce in the 2011 financial year. However, the price weakness in US Dollar terms was largely offset by the weakening of the Rand against the US Dollar, resulting in the Company's overall Rand PGM basket price, excluding base metal revenue, declining by 3.3 per cent. from the prior year.

Recent European macroeconomic uncertainty could put downward pressure on the market prices of PGMs. For example, demand for platinum could decline in connection with reduced demand for diesel powered vehicles which currently predominantly use platinum as their catalyst. In addition, according to SFA (Oxford) Ltd, industrial users of PGMs have taken advantage of recent low prices to increase their stocks of PGMs, particularly palladium and rhodium, at a time when the rate of global growth is unclear. However, the Events at Marikana and subsequent strike action at almost all other South African PGM producers have, given the importance of South African producers to global PGM production, in a short space of time altered the outlook for the supply side of the PGM industry. These events have increased operating costs for Lonmin and other companies in the South African PGM mining industry, while at the same time creating supply constraints which have contributed to an increase in PGM prices. The Board believes that the disruption to the South African PGM mining industry is also likely to result in some capacity reductions in the near term as higher cost operations are forced to reduce output or close down, or in the longer term as reduced capital expenditure plans defer the production of replacement or growth ounces in the future. The Board believes that these factors should sustain improved pricing for PGMs.

Over the longer term, the Board also believes that improved PGM pricing should be supported by underlying positive demand dynamics. Automotive demand is expected to be driven by a combination of increasingly stringent emissions legislation, the ongoing extension of this regime to non-road applications and a positive medium-term outlook for vehicle sales in US and Chinese markets. Although Chinese growth expectations have recently been downgraded, consumer expenditure in China is still expected to increase with positive implications for jewellery sales.

The production of Platinum ounces as saleable metal in concentrate is forecast to be around 680,000 ounces for the 2013 financial year. This is below the Company's previous expectations for two reasons associated with the Events at Marikana: first, due to the estimated time required to return to normal productivity levels; and, secondly, due to the impact of lower capital spend and the suspension of production at the K4 shaft which, as previously announced, was placed on care and maintenance in September 2012.

This metal in concentrate output is expected to result in Platinum sales of around 660,000 ounces for the 2013 financial year. The shortfall of around 20,000 ounces from the metal in concentrate output represents the necessary build-up of pipeline ounces in the smelters and the refineries during the 2013 financial year to replace stocks depleted during the fourth quarter of the 2012 financial year.

As at 31 October 2012, the Group's net debt was approximately US$550 million (unaudited), an increase of approximately US$129 million compared to the Company's audited net debt as at 30 September 2012 of US$421 million.

The increase in the Company's net debt since the end of the 2012 financial year is a result of:

-- costs incurred by the Group in ramping up production following the Events at Marikana (which have been funded by drawing down amounts under the Group's Existing Facilities); and

-- a very significant decrease in revenue since the financial year end (unaudited revenue in the month of October 2012 was US$8 million, compared to unaudited revenue in the month of October 2011 of US$48 million) as the Company has sought to rebuild in-process inventories following the disruption caused by the Events at Marikana, which has contributed to a very significant reduction in sales of refined PGMs during October 2012.

DIVIDEND POLICY

Whilst dividends are not affordable in the short term, Lonmin has confidence in the future demand for PGMs and its expectation is for prices to firm in response to anticipated supply deficits in the future. The Directors are also determined to increase the effectiveness of the Group's operations, in both production and cost terms. While there are challenges to be overcome in achieving this, the Directors believe the opportunity to increase the effectiveness of the Group's operations exists and a return to stronger earnings and cash flows will permit the resumption of dividends at some point in the future. When the payment of dividends is resumed the Directors would intend to follow the existing policy of declaring an ordinary final dividend at a rate which the Board expects can at least be maintained in subsequent years or possibly increased over time. This final dividend will be supplemented by special dividends when the Group's reported earnings and projected cash requirements allow.

PROPOSALS FROM XSTRATA

In September 2012, shortly following the tragic Events at Marikana, Lonmin approached Xstrata about the possibility of an equity capital raise. At that meeting, Xstrata proposed the potential acquisition by Lonmin of Xstrata's PGM and Alloys division together with an inter-conditional rights issue by Lonmin. The transaction concept outlined by Xstrata at that time was similar to an earlier proposal made by Xstrata in early 2011, which was rejected by the Board as being unattractive in several respects for non-Xstrata shareholders of Lonmin.

As part of reviewing all available funding options, Lonmin instructed its executive and advisory teams to engage constructively with their counterparts at Xstrata. This process lasted for a number of weeks to allow both teams to explore the transaction concept further and allow Xstrata to develop a formal proposal. A proposal, structured as a reverse takeover, was made by Xstrata on 12 October 2012 and envisaged:

-- the acquisition of Xstrata's South African PGM, chrome and vanadium businesses in consideration of Lonmin Shares;

-- an inter-conditional rights issue of US$1.0bn, fully underwritten by Xstrata;

-- Xstrata's shareholding in the enlarged Lonmin business being increased to 70 per cent. or more, depending on whether Xstrata was required to take up more than its pro rata share of the rights issue; and

-- a revised Lonmin board of directors comprising 11 members, with Xstrata having the right to appoint the chairman and four other directors, including the Chief Executive Officer and Chief Financial Officer.

After careful consideration, on the 19 October 2012, Lonmin rejected this proposal on the basis that:

-- the inter-conditionality of the rights issue and the acquisition, combined with the numerous other conditions and pre-conditions contained in the proposal meant that it would have been impossible, in the Board's view, to conclude such a transaction on the timetable being proposed by Xstrata at a time when Lonmin's priority was to restore the financial strength of the Group;

-- consequently, it did not offer the funding certainty which Lonmin sought and thus would have seriously undermined its negotiating position with Xstrata and its banking group; and

-- Lonmin's Board believed that the economic terms offered by Xstrata were not attractive for non-Xstrata shareholders in Lonmin and failed to compensate for the change of control which would occur.

The Board of Lonmin subsequently confirmed in writing to Xstrata on 2 November 2012 that discussions on the proposal had terminated on 19 October 2012.

The Board of Lonmin had made it clear that it would be prepared to consider any revised proposal that Xstrata wished to make on its merits; however, no revised proposal was made by Xstrata.

On the afternoon of 8 November 2012, Xstrata wrote to the Board of Lonmin that it was prepared to support the Rights Issue, conditional upon the Board of Lonmin publicly committing to replace Lonmin's Executive Directors and enter into a management services agreement with Xstrata. Pursuant to that agreement, Xstrata would provide management services to Lonmin's operations through the provision of appropriately qualified individuals to assume senior positions at Lonmin, including the appointment of the chief executive officer.

The Board considered Xstrata's letter of 8 November 2012 and concluded that it would not be appropriate to agree to the conditions contained in it. In particular, whilst the Board of Lonmin continues to hope Xstrata will be able to support the Rights Issue by taking up its rights in full, it believes it would be wholly inappropriate for the Board to cede such substantial control to a single minority shareholder.

SUMMARY OF THE PRINCIPAL TERMS OF THE RIGHTS ISSUE

The Rights Issue is intended to raise net proceeds of approximately US$777 million. The Rights Issue is being underwritten (save in respect of those New Shares which the Directors have irrevocably undertaken to take up) by Citi, HSBC, J.P. Morgan Cazenove, Standard Bank, BNP Paribas, Investec, Rand Merchant Bank and Standard Chartered. A summary of the material terms of the Underwriting Agreement will be set out in the Prospectus. In the UK, Greenhill is acting as sponsor in relation to the Rights Issue and, in South Africa, J.P. Morgan Equities Limited is acting as transaction sponsor in relation to the Rights Issue.

Subject to the fulfilment of, amongst others, the conditions described below, the New Shares will be offered for subscription to Qualifying Shareholders by way of Rights at 140 pence per New Share, in respect of Qualifying Shareholders (other than Qualifying South African Shareholders), or, in the case of Qualifying South African Shareholders, ZAR 19.4872 per New Share, payable in full on acceptance. The Rights Issue will be on the basis of:

9 New Shares for every 5 Existing Shares

held by and registered in the names of Qualifying Shareholders (other than, subject to certain exceptions, Qualifying Shareholders resident or with registered addresses in the United States or any of the Excluded Territories) on the relevant Record Date and so in proportion to any other number of Existing Shares each Qualifying Shareholder then holds and otherwise on the terms and conditions set out in the Prospectus and, in the case of Qualifying Non-CREST Shareholders or Qualifying South African Shareholders holding certificated Shares (other than, subject to certain exceptions, such Shareholders resident or with registered addresses in the United States or any of the Excluded Territories), the Provisional Allotment Letters or Forms of Instruction respectively.

The UK Issue Price of 140 pence per New Share, which is payable in full by Qualifying Shareholders (other than Qualifying South African Shareholders) on acceptance by no later than 11:00 a.m. (London time) on 10 December 2012, represents:

   --      a 69.1 per cent. discount to the closing price of an Existing Share; 
   --      a 44.4 per cent. discount to the theoretical ex-Rights price of an Existing Share, 

in each case based on the closing middle-market price of 452.8 pence on the LSE on the last business day prior to the date of announcement of the terms of the Rights Issue.

The SA Issue Price of ZAR 19.4872 per New Share, which is payable in full by Qualifying South African Shareholders who hold their Shares in certificated form on acceptance by no later than 1:00 p.m. (Johannesburg time) on 10 December 2012, represents:

   --      a 69.7 per cent. discount to the closing price of an Existing Share; and 
   --      a 45.0 per cent. discount to the theoretical ex-Rights price of an Existing Share, 

in each case based on the closing price of ZAR 64.22 on the JSE on the last business day prior to the date of announcement of the terms of the Rights Issue.

Fractions of New Shares arising under the Rights Issue will not be allotted to Qualifying Shareholders and, where necessary, fractional entitlements will be rounded down to the nearest whole number of New Shares. Holdings of Existing Shares in certificated form and uncertificated form will be treated as separate holdings for the purpose of calculating entitlements under the Rights Issue.

Applications have been made for the New Shares to be admitted to listing on the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities. It is expected that Admission will become effective and dealings will commence (nil paid) in the New Shares at 8:00 a.m. (London time) on 20 November 2012.

Application has been made to JSE Ltd for the Letters of Allocation and the New Shares to be admitted to listing and trading on the Main Board of the JSE. It is expected that South African Admission will become effective and that dealings on the JSE in the Letters of Allocation (on a deferred settlement basis) will commence at 9:00 a.m. (Johannesburg time) on 20 November 2012 and in the New Shares (fully paid) will commence at 9:00 a.m. (Johannesburg time) on 4 December 2012.

Any changes to the timetable of the Rights Issue will be announced by the Company in accordance with applicable rules in the United Kingdom and South Africa.

The Rights Issue is conditional upon:

   a)    the passing of the Resolution by the Shareholders at the General Meeting; 

b) Admission becoming effective by not later than 8:00 a.m. (London time) on 20 November 2012 (or such later time and/or date as the Company and the Underwriters may agree, but provided that the Acceptance Date is not later than 10 January 2013);

c) admission of the New Shares and Letters of Allocation to listing and trading on the JSE's Main Board for listed securities becoming effective by not later than Admission; and

d) the Underwriting Agreement otherwise becoming unconditional in all respects (other than in regard to Admission and the South African Admission), and not having been terminated in accordance with its terms prior to Admission.

The New Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Shares, including the right to receive all future dividends and other distributions declared, made or paid after the date of their issue.

The Rights Issue will result in the issue of up to 365,503,264 New Shares, which will form approximately 64.3 per cent. of the Shares in issue immediately following the Rights Issue.

The offer of New Shares pursuant to the Rights Issue is not being, and will not be, made by means of the Prospectus into the United States or any of the Excluded Territories or any other jurisdiction outside the United Kingdom or South Africa in which it would be illegal to make an offer. In order to comply with the provisions of the Companies Act, the offer of New Shares to Qualifying Shareholders with registered addresses outside the EEA and who have not given the Company an address within the EEA for the serving of notices will be made to such Shareholders through a notice in the London Gazette, details of which will be provided in the Prospectus.

Further information on the Rights Issue, including the terms and conditions of the Rights Issue and the procedure for acceptance and payment and the procedure in respect of Rights not taken up will be set out in the Prospectus and, where relevant, will be set out in the Provisional Allotment Letter or the Form of Instruction.

DIRECTORS' INTENTIONS

Each Director who holds Shares (other than Ian Farmer, in light of the course of treatment he is receiving) has undertaken to take up in full his or her Rights to subscribe for New Shares under the Rights Issue in respect of his or her beneficial holding, which together amount to 74,115 Shares, representing 0.03 per cent. of the issued ordinary share capital of the Company as at the date of the Prospectus.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS IN THE UNITED KINGDOM

Each of the times and dates in the table below is indicative only and may be subject to change.

 
 Approval of prospectus by 
 UKLA..............................................................................                    9 November 2012 
------------------------------------------------------------------------------------------  -------------------------- 
 Restrictions on transfers between UK Register                                                5:00 p.m. on 15 November 
  and SA Register begin.............                                                                              2012 
------------------------------------------------------------------------------------------  -------------------------- 
 Record date for entitlement under the Rights 
  Issue for Qualifying CREST Shareholders                                                     5:00 p.m. on 15 November 
  and Qualifying Non-CREST Shareholders.................................                                          2012 
------------------------------------------------------------------------------------------  -------------------------- 
 Latest time and date for receipt of forms                                                    5.00 p.m. on 16 November 
  of proxy                                                                                                        2012 
------------------------------------------------------------------------------------------  -------------------------- 
 General 
 Meeting..................................................................................    9:30 a.m. on 19 November 
 ........................                                                                                         2012 
------------------------------------------------------------------------------------------  -------------------------- 
 Despatch of Provisional Allotment Letters 
 (to Qualifying Non-CREST Shareholders only)(1) 
 ......................................................................................... 
 ....                                                                                                 19 November 2012 
------------------------------------------------------------------------------------------  -------------------------- 
 Notice to be published in the London 
 Gazette.......................................................                                       19 November 2012 
------------------------------------------------------------------------------------------  -------------------------- 
 Start of subscription 
 period................................................................................... 
 ..                                                                                                   20 November 2012 
------------------------------------------------------------------------------------------  -------------------------- 
 Dealings in New Shares, nil paid, commence                                                   8:00 a.m. on 20 November 
  on the London Stock Exchange..                                                                                  2012 
------------------------------------------------------------------------------------------  -------------------------- 
 Existing Shares marked "ex" by the London                                                    8:00 a.m. on 20 November 
  Stock Exchange..............................                                                                    2012 
------------------------------------------------------------------------------------------  -------------------------- 
 Nil Paid Rights credited to stock accounts 
 in CREST (Qualifying CREST Shareholders 
 only)(1) 
 .........................................................................................    8:00 a.m. on 20 November 
 ....                                                                                                             2012 
------------------------------------------------------------------------------------------  -------------------------- 
 Nil Paid Rights and Fully Paid Rights enabled                                                8:00 a.m. on 20 November 
  in CREST.....................................                                                                   2012 
------------------------------------------------------------------------------------------  -------------------------- 
 Recommended latest time and date for requesting 
 withdrawal of Nil Paid Rights and Fully 
 Paid Rights from CREST (i.e. if your Nil 
 Paid Rights and Fully Paid Rights are in 
 CREST and you wish to convert them to certificated 
 form)....................................................................................     4:30 p.m. on 4 December 
 ...............                                                                                                  2012 
------------------------------------------------------------------------------------------  -------------------------- 
 Latest time for depositing renounced Provisional 
  Allotment Letters, nil or fully paid, into 
  CREST or for dematerialising Nil Paid Rights 
  or Fully Paid Rights into a CREST stock 
  account (i.e. if your Nil Paid Rights and 
  Fully Paid Rights are represented by a Provisional 
  Allotment Letter and you wish to convert                                                     3:00 p.m. on 5 December 
  them to uncertificated form)..........................................                                          2012 
------------------------------------------------------------------------------------------  -------------------------- 
 Latest time and date for splitting Provisional 
 Allotment Letters, nil or fully 
 paid.....................................................................................     3:00 p.m. on 6 December 
 .......................................                                                                          2012 
------------------------------------------------------------------------------------------  -------------------------- 
 Latest time and date for acceptance, payment 
  in full and registration of renunciation                                                   11:00 a.m. on 10 December 
  of Provisional Allotment Letters.................................................                               2012 
------------------------------------------------------------------------------------------  -------------------------- 
 Results of the Rights Issue announced(2)                                                     7:00 a.m. on 11 December 
  ...............................................................                                                 2012 
------------------------------------------------------------------------------------------  -------------------------- 
 Dealings in New Shares, fully paid, commence 
 on the London Stock 
 Exchange.................................................................................    8:00 a.m. on 11 December 
 ....................................................                                                             2012 
------------------------------------------------------------------------------------------  -------------------------- 
 New Shares credited to CREST stock                                                           8:00 a.m. on 11 December 
 accounts......................................................                                                   2012 
------------------------------------------------------------------------------------------  -------------------------- 
 Restriction on transfers between UK Register                                                 8:00 a.m. on 11 December 
  and SA Register ends................                                                                            2012 
------------------------------------------------------------------------------------------  -------------------------- 
 Despatch of definitive share certificates                                                         By no later than 18 
  for the New Shares in certificated form                                                                December 2012 
------------------------------------------------------------------------------------------  -------------------------- 
 

Notes:

1. The Rights Issue is subject to certain restrictions relating to Shareholders with registered addresses in the United States or the Excluded Territories, details of which will be set out in the Prospectus.

2. The results of the Rights Issue will be announced by way of a simultaneous RIS and SENS announcement at 7:00 a.m. (London time) on 11 December 2012.

3. The times and dates set out in the expected timetable of principal events above and mentioned throughout the Prospectus may be adjusted by Lonmin in consultation with the Underwriters, in which event details of the new times and dates will be notified to the UK Listing Authority, the London Stock Exchange and, where appropriate, Qualifying Shareholders by way of a simultaneous RIS and SENS announcement.

   4.        References to times in this timetable are to London time. 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS IN SOUTH AFRICA

Each of the times and dates in the table below is indicative only and may be subject to change.

 
 Rights Issue 
 announcement.......................................................................... 
 ............                                                                                          9 November 2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 Restrictions on transfers between UK Register                                                7:00 p.m. on 15 November 
  and SA Register begins...........                                                                               2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 Latest time and date for receipt of Forms                                                    7:00 p.m. on 16 November 
  of Proxy                                                                                                        2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 Shareholders Meeting                                                                     11:30a.m. on 19 November2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 Last day to trade Existing Shares on the 
 JSE to qualify to participate in the Rights 
 Issue (cum 
 Rights)............................................................................... 
 .......                                                                                              19 November 2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 In respect of Qualifying South African Shareholders 
  who hold their Shares in certificated form, 
  commencement of period during which the 
  SA Registrar will not register the transfer                                                     Close of business on 
  of Existing Shares.............................                                                     20 November 2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 Listing of and trading in Letters of Allocation 
 on the JSE on a deferred settlement basis 
 begins................................................................................       9:00 a.m. on 20 November 
 ........                                                                                                         2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 Existing Shares marked "ex" by the                                                           9:00 a.m. on 20 November 
 JSE...................................................................                                           2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 Despatch of Forms of Instruction to Qualifying 
  South African Shareholders who hold their                                                   5:00 p.m. on 23 November 
  Shares in certificated form(1) ...................................................                              2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 Record date for entitlements under the Rights 
 Issue for Qualifying South African 
 Shareholders.......................................................................... 
 ...................                                                                                  26 November 2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 In respect of Qualifying South African Shareholders 
  who hold their Shares in certificated form, 
  end of period during which the SA Registrar 
  will not register the transfer of Existing                                                      Close of business on 
  Shares..............................................................                                26 November 2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 Qualifying South African Shareholders who 
 hold their Shares in uncertificated form 
 will have their accounts at their CSDP or 
 broker automatically credited with their 
 Letters of Allocation (Rights Issue opens)(1) 
 ......................................................................................       9:00 a.m. on 27 November 
 .............................                                                                                    2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 Qualifying South African Shareholders who 
  hold their Shares in certificated form will 
  have their Letters of Allocation credited 
  to an account held with the SA Registrar                                                    9:00 a.m. on 27 November 
  (Rights Issue opens)(1) ..........................                                                              2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 In respect of Qualifying South African Shareholders 
 who hold their Shares in certificated form 
 wishing to sell all or part of their Letters 
 of Allocation, latest time and date for 
 submission of Form of Instruction to SA 
 Registrar.............................................................................       12:00 p.m. on 3 December 
 .................................                                                                                2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 Last day to trade Letters of Allocation 
  on the JSE to settle trades by the closing 
  date of the Rights Issue in order to participate                                             5:00 p.m. on 3 December 
  in the Rights Issue                                                                                             2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 Listing and trading of New Shares on the 
  JSE and dealings in New Shares on a deferred                                                 9:00 a.m. on 4 December 
  settlement basis commence........................................................                               2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 Rights Issue 
 closes................................................................................       1:00 p.m. on 10 December 
 .....................                                                                                            2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 Record Date for Letters of                                                                       Close of business on 
 Allocation......................................................................                     10 December 2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 CSDP/broker accounts credited with New Shares 
  and debited with payments due in respect 
  of New Shares in uncertificated form(7)                                                     9:00 a.m. on 11 December 
  ................                                                                                                2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 Results of Rights Issue announced(2)                                                         9:00 a.m. on 11 December 
 .....................................................................                                            2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 Results of Rights Issue announced in the                                                     9:00 a.m. on 11 December 
  press...................................................                                                        2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 Restrictions on transfers between UK Register                                                9:00 a.m. on 11 December 
  and SA Register ends..............                                                                              2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 Despatch of definitive share certificates 
 for the New Shares in certificated 
 form..................................................................................            By no later than 18 
 .........................................                                                               December 2012 
---------------------------------------------------------------------------------------  ----------------------------- 
 

Notes:

1. The Rights Issue is subject to certain restrictions relating to Shareholders with registered addresses in the United States or the Excluded Territories, details of which will be set out in the Prospectus.

2. The results of the Rights Issue will be announced by way of a simultaneous RIS and SENS announcement at 9:00 a.m. (Johannesburg time) on 11 December 2012.

3. The times and dates set out in the expected timetable of principal events above and mentioned throughout the Prospectus may be adjusted by Lonmin in consultation with the Underwriters, in which event details of the new times and dates will be notified to JSE Ltd and, where appropriate, Qualifying South African Shareholders and announced by way of a simultaneous RIS and SENS announcement.

   4.        References to times in this timetable are to Johannesburg times. 

5. Qualifying South African Shareholders who hold their Shares in uncertificated form are required to inform their CSDP or broker of their instructions in terms of the Rights Issue in the manner and time stipulated in the agreement governing the relationship between the shareholder and their CSDP or broker.

6. Share certificates may not be dematerialised or rematerialised between 19 November 2012 and 26 November 2012, both days inclusive. Qualifying South African Shareholders who hold their Existing Shares in uncertificated form will have their accounts at their CSDP or broker automatically credited with their Letters of Allocation and Qualifying South African Shareholders who hold their Existing Shares in certificated form will have their Letters of Allocation credited to an account with the SA Registrar.

7. CSDPs effect delivery in respect of Qualifying South African Shareholders who hold their shares in uncertificated form on a delivery versus payment method.

This announcement is not for release, publication or distribution, directly or indirectly, in whole or in part, in or into the United States or, in or into any of the Excluded Territories. This announcement does not constitute or form part of an offer or solicitation in respect of the Nil Paid Rights, the Fully Paid Rights, the New Shares or the Letters of Allocation in the United States or any of the Excluded Territories. In particular, the Nil Paid Rights, the Fully Paid Rights, the New Shares and the Letters of Allocation referred to in this announcement -

-- have not been and will not be registered under the US Securities Act of 1933 (the "US Securities Act") or the securities legislation of any other any State or other jurisdiction of the United States and may not be offered, sold, taken up, exercised, resold, pledged, renounced, transferred or delivered, directly or indirectly, within the United States except pursuant to an applicable exemption from the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any State or other jurisdiction of the United States. There will be no public offer of the Nil Paid Rights, the Fully Paid Rights, the Letters of Allocation or the New Shares in the United States;

-- have not and will not be offered, sent or credited to any shareholder with a registered address in Australia;

-- have not been and will not be qualified by prospectus for offer or sale to the public in Canada under applicable Canadian securities laws and accordingly, no offer or sale of Nil Paid Rights, Fully Paid Rights, New Shares or Letters of Allocation will be made in Canada and no Provisional Allotment Letter or Form of Instruction will be sent to any Shareholder in or with a registered address in Canada; and

-- have not been and will not be registered under the Financial Instruments and Exchange Law of Japan, as amended (the "FIEL") and this announcement does not constitute an offer of securities for sale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan or to others for reoffer or resale, directly or indirectly, in Japan or to, or for the benefit of, any resident in Japan, except pursuant to an exemption from the registration requirements under the FIEL and otherwise in compliance with such law and such other applicable laws, regulations and ministerial guidelines in Japan.

This announcement does not constitute an invitation or offer to sell or the solicitation of an invitation or an offer to buy New Shares or to take up entitlements to Nil Paid Rights, Fully Paid Rights or Letters of Allocation in any jurisdiction in which such offer or solicitation is unlawful and accordingly persons who come into possession of this announcement should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities law of any such jurisdiction.

This announcement includes forward-looking statements within the meaning of the securities laws of certain jurisdictions. These forward-looking statements include, but are not limited to, statements other than statements of historical fact including, without limitation, those regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Company's results of operations, financial condition, prospects, growth, strategies and the industry in which the Company operates. Forward-looking statements are typically identified by the use of forward-looking terminology such as "believes", "expects", "may", "will", "could", "should", "intends", "estimates", "plans", "assumes" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. By their nature, forward-looking statements involve risks and uncertainties, including, without limitation, the risks and uncertainties to be set forth in the Prospectus, because they relate to events and depend on circumstances that may or may not occur in the future; actual events or results may differ materially from those expressed in or implied by these statements as a result of risks and uncertainties facing the Company and its subsidiaries. Many of these risks and uncertainties relate to factors that are beyond the Company's ability to control or estimate precisely, such as changes in future market conditions, currency fluctuations, the behaviour of other market participants, the actions of governmental regulators and other risk factors such as changes in the political, social and regulatory framework in which the Company operates or in economic or technological trends or conditions, including inflation and consumer confidence, on a global, regional or national basis. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed or implied in such forward-looking statements. The forward-looking statements contained in this announcement speak only as of the date of this announcement and the Company undertakes no duty to update any of them publicly in light of new information or future events, except to the extent required by applicable law, the Prospectus Rules, the Listing Rules and the Disclosure and Transparency Rules.

ISIN CODES

The ISIN code for the New Shares will be the same as that of the Existing Shares being GB0031192486.

The ISIN code for the Nil Paid Rights is GB00B844GQ10 and for the Fully Paid Rights is GB00B731C910.

DEFINITIONS

The following definitions shall apply throughout this announcement unless the context requires otherwise:

 
 "Admission"                   admission of the New Shares to the Premium 
                                  Segment of the Official List and to trading, 
                                  nil paid, on the London Stock Exchange's 
                                  main market for listed securities; 
 "ADR holders"                 the holders of any ADRs from time to time 
                                  and "ADR Holder" means any one of them; 
 "ADRs"                        American Depositary Receipts evidencing American 
                                  Depositary Shares issued by the Depositary 
                                  pursuant to the Deposit Agreement; 
 "Amended Facilities"            the Amended US Dollar Facility and Amended 
                                  Rand Facilities; 
 "Amended Rand Facilities"       the Rand Facilities as proposed to be amended; 
 "Amended US Dollar              the US$400 million revolving credit facility 
  Facility"                       to be made available pursuant to the US Dollar 
                                  Facilities Amendment Agreement; 
 "BEE"                         broad based black economic empowerment, or 
                                  black economic empowerment, which arises 
                                  as a result of the following South African 
                                  legislation: the Employment Equity Act No. 
                                  55 of 1998; the Skills Development Act No. 
                                  97 of 1998; the Preferential Procurement 
                                  Policy Framework Act No. 5 of 2000; the Broad 
                                  Based Black Economic Empowerment Act No. 
                                  53 of 2003; the MPRDA and the Mining Charter; 
 "BNP Paribas"                 BNP PARIBAS, a French société anonyme; 
 "Banks"                         each of Greenhill, the SA Sponsor and the 
                                  Underwriters; 
 "Board" or "Directors"      the board of directors of the Company; 
 "certificated form"           in relation to a share or other security, 
                                  a share or other security which is not in 
                                  uncertificated form (that is, not in CREST 
                                  or Strate); 
 "Citi"                        Citigroup Global Markets Limited; 
 "Companies Act"                 the Companies Act 2006; 
 "Company" or "Lonmin"       Lonmin Plc, a company registered in England 
                                  and Wales with registered number 103002 and 
                                  registered as an external company in South 
                                  Africa under registration number 1969/000015/10; 
 "CREST"                       the computerised system for the paperless 
                                  settlement of sales and purchases of securities 
                                  and the holding of uncertificated securities 
                                  operated by Euroclear UK & Ireland in accordance 
                                  with the CREST Regulations; 
 "CREST Regulations"           the Uncertificated Securities Regulations 
                                  2001 (SI 2001 No. 3755), as from time to 
                                  time amended; 
 "CSDP"                        Central Securities Depository Participant, 
                                  a "participant" as defined in the Securities 
                                  Services Act; 
 "Deposit Agreement"             the amended and restated deposit agreement 
                                  dated 25 February 2002 between the Company, 
                                  the Bank of New York Mellon and holders from 
                                  time to time of ADRs; 
 "Depositary"                    the Bank of New York Mellon, as depositary 
                                  under the Deposit Agreement; 
 "Disclosure and Transparency    the disclosure rules and transparency rules 
  Rules"                          of the FSA; 
 "EBITDA"                      earnings before interest, tax, depreciation 
                                  and amortisation; 
 "EPL"                         Eastern Platinum Limited, a subsidiary of 
                                  the Group in which Lonmin has an 82 per cent. 
                                  interest; 
 "ETF"                         Exchange Traded Fund and references to ETFs 
                                  are references to platinum, palladium or 
                                  rhodium ETFs, funds generally backed by physical 
                                  metal, the performance of which replicates 
                                  the performance of the relevant metal's price; 
 "Euroclear UK & Ireland"      Euroclear UK & Ireland Limited, the operator 
                                  of CREST; 
 "Events at Marikana"            the illegal strike at the Company's Marikana 
                                  operations in August and September 2012; 
 "Excluded Territories"        the Commonwealth of Australia, its territories 
                                  and possessions, Canada, and Japan and "Excluded 
                                  Territory" means any one of them; 
 "Existing Shares"             the Shares in issue at the Record Date; 
 "Form of Instruction"         each of the forms of instruction, to be posted 
                                  to Qualifying South African Shareholders 
                                  who hold their Existing Shares in certificated 
                                  form, in respect of their Letters of Allocation 
                                  and reflecting the entitlement of that Qualifying 
                                  Shareholder to Nil Paid Rights; 
 "FSA"                         the Financial Services Authority acting in 
                                  its capacity as the competent authority for 
                                  listing in the UK for the purposes of Part 
                                  VI of the FSMA; 
 "FSMA"                        the Financial Services and Markets Act 2000 
                                  (as amended); 
 "Fully Paid Rights"           rights to acquire the New Shares fully paid; 
 "General Meeting"               the general meeting of Lonmin to be held 
                                  in connection with the Rights Issue, notice 
                                  of which was sent to Shareholders as part 
                                  of an explanatory circular on 2 November 
                                  2012; 
  "Greenhill"                    Greenhill & Co. International LLP; 
 "Group"                       Lonmin and its subsidiary undertakings (as 
                                  defined in the Companies Act); 
 "HDSA"                        historically disadvantaged South Africans, 
                                  as defined in the Mining Charter. It refers 
                                  to South African citizens who were disadvantaged 
                                  by unfair discrimination before the implementation 
                                  of the Constitution of the Republic of South 
                                  Africa in 1993; 
 "HDSA shareholders"           companies owned by HDSAs which are shareholders 
  "HSBC"                          in Incwala Resources; 
                                  HSBC Bank plc; 
 "Incwala" or "Incwala        Incwala Resources (Proprietary) Limited, 
  Resources"                     a company incorporated in accordance with 
                                  the laws of South Africa; 
 "Investec"                    Investec Bank plc; 
 "ISIN"                        International Security Identification Number; 
 "Issue Price"                 the UK Issue Price or the SA Issue Price, 
                                  as appropriate; 
 "J.P. Morgan Cazenove"        J.P. Morgan Securities plc; 
 
 "JSE"                         the securities operated by the JSE Ltd; 
 "JSE Ltd"                       JSE Limited, a company incorporated in accordance 
                                  with the laws of South Africa and licensed 
                                  to operate a securities exchange in terms 
                                  of the Securities Services Act; 
 "JSE Listings Requirements"     the JSE Limited Listings Requirements in 
                                  force as at the Latest Practicable Date; 
 "Latest Practicable            7 November 2012 (being the latest practicable 
  Date"                          date for the inclusion of information in 
                                  this announcement prior to the finalisation 
                                  of this announcement); 
 "Letter of Allocation          a renounceable letter of allocation issued 
                                  by the Company in electronic form conferring 
                                  Nil Paid Rights on a Qualifying South African 
                                  Shareholder; 
 "Listing Rules"                 the listing rules made by the UKLA pursuant 
                                  to Part VI of FSMA; 
 "London Stock Exchange"       London Stock Exchange plc; 
 "Mining Charter"                the Amendment of the Broad-Based Socio Economic 
                                  Empowerment Charter for the South African 
                                  Mining and Minerals Industry published in 
                                  September 2010 in terms of Section 100(2) 
                                  of the MPRDA, including any amendment, supplement, 
                                  replacement or successor thereto, and any 
                                  legislation or regulation of a similar or 
                                  related nature adopted in South Africa; 
 "Mining Division"               the division of the Company that defines 
                                  mineral reserves and mineral resources, sinks 
                                  shafts and develops and operates mines supplying 
                                  ore to the Process Division; 
 "MPRDA"                         the South African Mineral and Petroleum Resources 
                                  Development Act No. 28 of 2002; 
 "New Shares"                  the new Shares of US$1 each to be issued 
                                  pursuant to the Rights Issue; 
 "Nil Paid Rights"             in the case of Qualifying Shareholders (other 
                                  than Qualifying South African Shareholders), 
                                  New Shares in nil paid form provisionally 
                                  allotted to such Qualifying Shareholders 
                                  pursuant to the Rights Issue and, in the 
                                  case of Qualifying South African Shareholders, 
                                  the right to subscribe for New Shares at 
                                  the SA Issue Price, as represented by Letters 
                                  of Allocation automatically credited to their 
                                  CSDP or broker accounts; 
 "Non-CREST Shareholders"      Shareholders whose Shares are on the UK Register 
                                  and are held in certificated form; 
 "Official List"               the Official List of the FSA; 
 "pound sterling"              the lawful currency of the United Kingdom; 
  or "GBP" or "pence" 
  or "p" 
 "Process Division"            the division of the Company responsible for 
                                  isolating and refining individual PGMs for 
                                  sale into the market place; 
 "Prospectus"                  the document setting out the details of the 
                                  Rights Issue, which document is a prospectus 
                                  for purposes of FSMA but is a circular as 
                                  defined in the JSE Listings Requirements 
                                  (and is not a prospectus within the meaning 
                                  of the South African Companies Act); 
 "Prospectus Rules"              the prospectus rules made by the FSA under 
                                  Part VI of FSMA; 
 "Provisional Allotment         the renounceable provisional allotment letters 
  Letters"                       relating to the Rights Issue, expected to 
                                  be dispatched to Qualifying Non-CREST Shareholders 
                                  (other than, subject to certain exceptions, 
                                  Qualifying Non-CREST Shareholders with registered 
                                  addresses in the United States or any of 
                                  the Excluded Territories); 
 "Qualifying CREST              Shareholders whose Shares are on the UK Register 
  Shareholder"                   as at the UK Record Date and which are in 
                                  uncertificated form and held through CREST; 
 "Qualifying Non-CREST          Shareholders whose Shares are on the UK Register 
  Shareholder"                   as at the UK Record Date and which are in 
                                  certificated form; 
 "Qualifying Shareholder"      A Qualifying Non-CREST Shareholder, Qualifying 
                                  CREST Shareholder and/or Qualifying South 
                                  African Shareholder, as the case may be (which, 
                                  for the avoidance of doubt, does not include 
                                  ADR holders); 
 "Qualifying South              Shareholders on the SA Register as at the 
  African Shareholders"          SA Record Date; 
 "Rand" or "ZAR"             the lawful currency of the Republic of South 
  or "R" or "Rand              Africa; 
  and cents" 
 or "Rand and cents" 
 "Rand Facilities"             the Company's three bilateral bank debt facilities 
                                  of R660 million each made available pursuant 
                                  to the Rand Facilities Agreements; 
 "Rand Facilities Agreement"   the existing agreements in relation to the 
                                  Rand Facilities; 
 "Rand Merchant Bank"          Rand Merchant Bank, a division of FirstRand 
                                  Bank Limited, a company incorporated in accordance 
                                  with the laws of South Africa; 
 "Record Date"                 the UK Record Date and/or the SA Record Date, 
                                  as the context so requires; 
 "Resolution"                    the resolution to be proposed at the General 
                                  Meeting; 
 "Rights Issue"                the 9 for 5 rights issue announced by the 
                                  Company on 9 November 2012; 
 "SA Issue Price"              the price at which Shares will be issued 
                                  to Qualifying South African Shareholders 
                                  pursuant to the Rights Issue, being ZAR19.4872; 
 "SA Record Date"              close of business on 26 November 2012; 
 "SA Register"                 the branch of the register of members of 
                                  the Company maintained in South Africa; 
 "SA Registrar"                Link Market Services South Africa (Proprietary) 
                                  Limited of 16th Floor, 11 Diagonal Street, 
                                  Johannesburg, South Africa; 
 "SA Sponsor"                  J.P. Morgan Equities Limited; 
 "Securities Services           the Securities Services Act 36 of 2004; 
  Act" 
 "SENS"                        the Securities Exchange News Service of the 
                                  JSE; 
 "Shareholders"                the holders of any Shares from time to time 
                                  and "Shareholder" means any one of them; 
 "Shares"                      the ordinary shares of US$1 each in the capital 
                                  of the Company (which, for the avoidance 
                                  of doubt, do not include ADRs); 
 "South Africa"                the Republic of South Africa; 
 "South African Admission"     admission of the Letters of Allocation and 
                                  the New Shares to trading on the JSE's Main 
                                  Board; 
 "South African Companies       the South African Companies Act No. 71 of 
  Act"                           2008; 
 "South African Registrar       the Registrar of Companies in South Africa; 
  of Companies" 
 "Standard Bank"                 Standard Bank plc; 
 "Standard Chartered'           Standard Chartered Securities (Hong Kong) 
                                  Limited; 
 "Strate"                      Strate Limited, a central securities depository 
                                  licensed in terms of the Securities Services 
                                  Act, and the electronic clearing and settlement 
                                  system used by the JSE Ltd to settle trades; 
 "UK Issue Price"              the price at which Shares will be issued 
                                  to Qualifying Shareholders (other than Qualifying 
                                  South African Shareholders) pursuant to the 
                                  Rights Issue, being 140 pence; 
 "UK Listing Authority"        the UK Listing Authority, being the FSA acting 
  or "UKLA"                     as the competent authority for the purposes 
                                  of Part VI of the FSMA; 
 "UK Record Date"              close of business on 15 November 2012; 
 "UK Register"                 the register of members of the Company maintained 
                                  in the United Kingdom; 
 "UK Registrar"                Equiniti Limited of Aspect House, Spencer 
                                  Road, Lancing, BN99 6DA; 
 "UK Sponsor"                  Greenhill; 
 "uncertificated form"         in respect of a Qualifying Shareholder other 
                                  than a Qualifying South African Shareholder, 
                                  describes the form of a share held by such 
                                  person in CREST; and in respect of a Qualifying 
                                  South African Shareholder describes the form 
                                  of a share held by such person trading on 
                                  the JSE not evidenced by a certificate or 
                                  written instrument, incorporated into Strate 
                                  and entered and recorded in the Company's 
                                  sub-register in electronic form in terms 
                                  of the Securities Services Act; 
 "Underwriters"                Citi, HSBC, J.P. Morgan Cazenove, Standard 
                                  Bank, BNP Paribas, Investec, Rand Merchant 
                                  Bank and Standard Chartered; 
 "Underwriting Agreement"      the underwriting agreement dated 9 November 
                                  2012 entered into between the Company and 
                                  the Underwriters, among others, relating 
                                  to the Rights Issue; 
 "United Kingdom"              the United Kingdom of Great Britain and Northern 
  or "UK"                       Ireland; 
 "United States" or            the United States of America, its territories 
  "US"                          and possessions, any state of the United 
                                  States of America, the District of Columbia; 
 "US Dollar(s)" or "US          the lawful currency of the United States; 
  dollar(s)" or "US$" 
  or "$" 
 "US Dollar Facilities"          US Dollar Term Loan and US Dollar Revolving 
                                  Credit Facility; 
 "US Dollar Facilities           the existing agreement in relation to the 
  Agreement"                      US Dollar Facilities; 
 "US Dollar Facilities           the amendment agreement in relation to the 
  Amendment Agreement"            US Dollar Facilities Agreement; 
 "US Dollar Revolving            the US$400 million revolving credit facility 
  Credit Facility"                made available pursuant to the US Dollar 
                                  Facilities Agreement; 
 "US Dollar Term Loan"           the US$300 million term loan facility made 
                                  available pursuant to the US Dollar Facilities 
                                  Agreement; 
 "US Shareholders"             Shareholders with registered addresses in 
                                  the United States; and 
 "WPL"                         Western Platinum Limited, a subsidiary of 
                                  the Group in which Lonmin has an 82 per cent. 
                                  Interest. 
 All references to legislation in this announcement are to the 
  legislation of England and Wales unless the contrary is indicated. 
  Any reference to any provision of any legislation shall include 
  any amendment, modification, re-enactment or extension thereof. 
  In this announcement, unless the context otherwise requires, words 
  importing the singular shall include the plural and vice versa 
  and words denoting any gender shall include all genders. 
 
 GLOSSARY 
 "average PGM basket            the weighted average price achieved by the 
  price"                         Group for PGMs in a given period; 
 "care and maintenance"        the state of a mine or other facility that 
                                  is not in current use, although it is maintained 
                                  in good condition to enable it to be brought 
                                  back into service; 
 "concentrate"                 material that has been processed to increase 
                                  the content of contained material or mineral 
                                  relative to the contained waste; 
 "cost curve"                  a graphic representation in which the total 
                                  production volume of a given commodity across 
                                  the relevant industry is arranged on the 
                                  basis of average unit costs of production 
                                  from lowest to highest to permit comparisons 
                                  of the relevant cost positions of particular 
                                  production sites, individual producer groups 
                                  or producers across the world or in any given 
                                  country or region; 
 "grade"                       the quality of an ore, alloy or metal, expressed 
                                  as a percentage of the primary element or 
                                  as a ratio of grammes per tonne; 
 "matte"                       the homogonous metallic sulphide produced 
                                  by the process of matte smelting, formed 
                                  by a combination of metallic sulphides which 
                                  comprise the metallic charge in the smelting 
                                  process; 
 "ore"                         a mineral or mineral aggregate containing 
                                  precious or useful minerals in such quantities, 
                                  grade and chemical combination to make extraction 
                                  commercially viable; 
 "ore reserve development"     the process of developing a known reserve 
                                  in order to facilitate the stoping of PGMs; 
 "ounce"                       a troy ounce, being approximately 31.1034 
                                  grams or 1.09714 imperial ounces; 
 "PGM"                         Platinum Group Metals, being platinum, palladium, 
                                  rhodium, ruthenium, iridium and, in respect 
                                  of Lonmin, gold but not osmium; 
 "reef"                        a layer, vein or lode containing potentially 
                                  economic mineralisation; 
 "slag"                        the waste material left after metal has been 
                                  smelted; 
 "stoping"                       the main method of ore extraction used once 
                                  the ore block has been developed and prepared 
                                  for production. Ore faces are drilled and 
                                  blasted using explosives and the ore is moved 
                                  from the stope face to the shaft hoisting 
                                  system using conventional or mechanised rock 
                                  transportation systems; 
 "smelter"                     a plant in which concentrates are processed 
                                  into an upgraded product by melting the concentrate 
                                  to separate matte from slag; 
 "tailings"                    the waste residue from the concentrating 
                                  process, containing finely ground rock and 
                                  minor quantities of mineralisation which 
                                  is generally subeconomic to recover using 
                                  current technologies and/or under current 
                                  market conditions. 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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