African Rainbow Mnrls Ltd

Apologies for the slight delay to starting our presentation, but we are on our way. Our executive chairman, Dr. Patrice Mutzepe, will be joining us virtually for these results. So I would like to welcome you all to the African Rainbow Minerals results presentation for the interim period ended 31 December 2024. Thank you to those of you who are joining us online via webcast and LinkedIn, but a special thank you to those of you who've made an effort to be here with us in person. For our virtual attendees, if you would like to ask a question, please use the dialogue box provided. Your questions will be read out as part of our Q&A session at the end of the presentation. And we will endeavor to get to as many of them as possible. Betty? Please note that we will take questions from the floor first before going to webcast. I will now hand over to our executive chairman to start with the presentation. Thank you.

Okay, thanks. Thanks to everybody. Very special welcome. I would have loved to be present, but we all have work to do to make sure that African Rainbow Minerals continues to be globally competitive and delivers competitive results. Now, let me start by thanking everybody for being present and a very special thanks to our management team under the capable leadership of Philip and Sue and we also have a world-class team contributions from Mike Schmidt André Joubert, Tando, and Tabang, and Sue, of course, our finance director. And thank you so much to the board members who are present and particularly to our chairman of audit and all the other board members who are with us. The important thing of presentations of this nature is results are definitive. We can do all the most wonderful work as a company. And of course, there are circumstances, for example, the pricing of our commodities that are outside our control. But our dominant focus has to be on those factors, circumstances, issues, operational performances that are totally under our control and consistently deliver competitive results, competitive results. in the context of our peers and also in the context of building a globally competitive company. And that has always been the focus and that will continue to be our objective in the short, medium, long term. And let me just repeat by saying results are critically, critically important and delivering good results, competitive results is a critical component factor from an african river minerals perspective headline earnings for the first half of 2025 decreased by 49 to 1.5 billion the results have already been published early this morning so i'm just going to identify those key factors and philip will provide more detail and sue also our finance director will provide additional detail on on the the specific issues which I'll be referring to. And as is always the case, the management team, Philip, Tzu, Mike and Tabang are available for questions, not just during this presentation, but also afterwards. And we'll also be going on a roadshow to engage with our shareholders and specifically to interact with our shareholders. And I really want to thank all of those shareholders who on an ongoing basis give us feedback and give us advice, including specifically their thoughts in areas where they think we can improve. And that feedback is highly appreciated and it's taken very seriously. Our financial position remains robust. We've got a net cash. We had net cash as at the end of March. December 24 of 6.1 billion. And earlier on, I spoke about what the headline earnings are. And we're declaring a dividend of 4.5 rands per share. The declaration of dividends is an important part of African rainbow minerals being globally competitive. And the declaration of dividends goes hand in hand with an important investment in the future. And you will see from what Philip will say and provide further details, we invest in the minerals that we have, including others that we are pursuing. And you have to take a long-term perspective. And particularly in the context of PGMs, but all minerals, the pricing can be very cyclical. And, you know, we've been in this business for more than 30 years and we understand it. And during the good times, we invest in the future. And during the difficult times, that's when there are opportunities. But also that's the time when a company with a strong balance sheet and with a world-class management team will always perform well. So our financial position, as I said, and we've received... dividends recently, and our finance director will provide further details in that regard. Thank you. Okay. Thank you. Now, as I said, the documents are available, and I'll just refer to some of the broader issues. The headline earnings in Amferes has decreased by 33%, to 1.9 billion. In Amplatinum, the headline earnings has also decreased significantly by 144% to 689%. And we are always asked the question, what does the future of PGMs look like? And over the last few months, particularly what has happened in America, it is clear that the transition to a clean economy, a green economy that all of us are committed to, will take significantly longer than was anticipated. And we are confident that in the medium to long term, the pricing of our PGM minerals and metals will increase. And it's a business that we have confidence in. It's a part of our portfolio. of assets that we run and operate that we think will continue to do well. And I often get asked questions by our shareholders about Bocconi. And Philip will provide, our CEO will provide more detail. But what we've said over the years, Bocconi is a world-class oil body. And we are confident that with some of the plans that we have, and some of the strategies that we have in the medium to long term, it will create value for shareholders. An important part is what further details will be provided for. It's in the context of capital allocation, but equally more importantly, the context of the money that the investment that we are busy with in Bukoni and to ensure that Every cent we spend there is appropriate and makes commercial sense and is also part of the long-term strategy of realizing value when the prices of the commodities will increase which we expect. What is also important is all of our assets all of the mines that we operate, there are no holy cows, and this is critical. If at any stage the information and the data at our disposal indicates that any of our operations should go on to can maintenance, we've done so in the past and we will do so in the future. What we've also realized is you've got to look at how you justify the expenditure and the cost that you're incurring in the context of profitability. And there has also to be a balance between long-term profitability and our short-term objectives. And the short-term objective, of course, is indeed profitability as well, but also the payments of dividends. We will provide more information in the slide, both on Bocconi and Comati and the other assets that are in our bodies that are part of our globally competitive portfolio of our bodies that we manage and operate. The headline earnings at Armco also diminished by 11% to 182 million. Thank you. And then the six monthly headline earnings is a reflection of what I've stated earlier. But again, this slide emphasizes the volatility. If you invest in mining companies, an essential part of your investment decision is an understanding of the volatility of the industry. And our duty as a mining company and as a mining company that is steadfast in its determination to be globally competitive, you stand out, you perform well when the prices of the commodities go down and you are still in a strong position in terms of your balance sheet, but also in terms of your costs of operation, because at the end of the day, Management is judged by what they are doing at the operations. And also, as I emphasized earlier, we see ourselves as a company that is committed to paying dividends on an ongoing basis. So you'll see that the six-month headline earnings over the last five years or so have gone up significantly in 2021 and 2022. And we are now busy with that cyclical downturn. And we invest for the future because we are confident that there will be an improvement in the medium to long term. Thank you. The dividends per share. As I said, we've declared a dividend of 4.50. And some of our shareholders were saying to us, but you know, you've got so much money. on your balance sheet and you've got lots of cash. Should you not give us more of the cash? We have a clear duty to pay dividends, but also to ensure that we have sufficient resources to create sustainable value in the medium to long term. Thank you. And then the dividends received, we received 2.5 billion from our partnership, our 50-50 partnership in Esmen. And I want to thank all of our partners who are with us and I want to thank them for their contributions. I want to thank Patrick Seko and also thank Des and the whole of the management team at ASO for the excellent work that they are doing with the excellent leadership that they um, Ference is providing under the leadership of, of, uh, Andre Joubert and Kajal is doing excellent work and Mareika and the team, uh, and, and there's also good work that's been done, uh, at Transnet and Roulette is doing excellent work and we're very proud of the good work that, that our team is doing at, at, um, Ference and that they're doing at Esmang and, and we're very proud of the partnership between, uh, arm and and the soul harmony is doing very well it always makes me proud when i was in miami two weeks ago for a meeting of the icmm which is attended by the ceos of the largest mining companies in the world and it's it's a important learning experience and to hear the commitments of of the best mining companies in the world in terms of responsible mining and their contributions to creating value for their shareholders and stakeholders, but also the crucial contribution of the minerals that all of us mine, whether it's mined by BHP or Rio Tinto or Anglo-American or Vale or Glencore or African Rainbow Minerals. Those minerals that we mine they make the world a better place and contribute to the improvement in the living conditions and standards of living of all of our people worldwide. Now, if you see that post-31 December, Harmony declared an interim dividend of 227 cents per share, and we will be receiving a dividend disarm of approximately 170 million. I'm proud of the work that Bayers is doing, And those of us who know the long history that African rainbow minerals have with Harmony, the current Harmony is a merger between Arm Gold that we formed in 1996 when we merged with Harmony. And that's why if you look at the name Harmony, you'll always find the logo and the sign of Arm and the rainbow in the words ARM in the name of Harmony. And they're doing good work. I'm I'm excited about the copper that Harmony is busy with. And again, we've always said there are no holy counts. We deal with all of our investments and with all of our assets within the clear commitment of what's in the best interest of our shareholders. And as part of that, we look at the totality of options And that's very, very important. And then distributions we received from Arm Coal, it went down and post 31 December 2024, Arm received 462 million from Arm Coal. And our investment in coal is one of the opportunities identified many years ago as being important to creating value for our shareholders. But also, we've got a huge commitment there as part of the just transition to a clean future and a green economy. Thank you. Segmental EBITDA split by commodities, you can see in 2025. Manganese increased in 2025, first half of 2025 from what it was. in the first half of 2024 and there were times i think about 10 15 years ago manganese was a significant contributor contributor to our headline earnings and to our profitability and uh the the assets we have the manganese assets we have in in as men our world class and we're confident that they will continue to create value in the medium to long term despite The prices currently not being as good as they were in the past, but for a few months in the past period, it was much better than it was a year or so ago. And the slide is self-explanatory in terms of the aberration segmental contribution by each of the commodities that we mine. Thank you. And safety and health is a critical component of... of our commitment in how we function and how we operate. The safety and health of every single one of our employees is critically, critically important. And there's an ongoing commitment to implement best practices, but it's even a greater commitment to consistently train, educate, and to create awareness because at times it's when sometimes employees have a very good understanding of the behavior and conduct that's expected from them for their safety, at times we become complacent and we have to overemphasize that the safety and health of every one of our employees is critically important. The last time injury frequency rate, there's been a 33% improvement and we unfortunately had one fatality at Modigua And our deepest condolences were passed and continue to be passed to one of our colleagues that we lost. And the total recoverable injury frequency rate, there was an increase of 4%. And well, the management team is doing good work as far as safety and health is concerned. And the critical factor is that there's always room for improvement and there's always a commitment to improve. Thank you. And this is the final slide refers to our strategy. We are an own operator. We've got an entrepreneurial management culture. We invest in our employees. We've got a deep commitment to the communities that live next to our minds and a significant portion of our employees come from there, but We also provide skills and expertise to the citizens, the residents of those communities and train them and send them to the best schools. And they are the future managers and engineers who run operations. And the impact of artificial intelligence and technology is something that we are following very closely and we are part of the most advanced discussions and exposure to how technology and artificial intelligence can significantly contribute towards increasing productivity, increasing efficiency, and increasing profitability. And another important part that's also not sufficiently emphasized at times is the impact of technology and artificial intelligence on safety and health. Thank you. Okay, now Philip will take over and guide us on the good work that he's been doing and Mike Schmidt and Sue and the rest of the team. Will you please proceed, Philip? And thank you, Thomas. Proceed, Philip.

Thank you very much, Chair. Good morning, ladies and gentlemen. Once again, welcome to those who are here with us physically and those online. and also a special welcome as well to our board members. Just going into the results, if you look at the production contribution, on the iron ore side, we just had a slight reduction in terms of performance as a result of the outtake from acetyl metal, which most of us are aware that have really made a declaration that they'll be stopping one of their plants at Newcastle. Manganese, during this reporting term, really showed a very strong performance, 13% improvement compared to how they performed last year. Last year, this time, you remember that we had some operational challenges, so those have been addressed, and the focus on quality has been achieved. So we're really grateful on that. On the Mudigwa side, we have already seen a decline in terms of output as a result of the stoppages, the safety-related stoppages that we faced following the winch-related fatality we had on the 29th of November last year. And Bukoni as well produced lower than the guided ounces from middle pent in the ramp-up production, and also affected to a certain extent by the fatality that we suffered the previous financial year on the 16th of June. Going into our headline earnings, during the past six months, ARM faced a very tough operating environment, including low commodity prices across our basket, logistics and water challenges combined with above inflation in cost increases. Cost reduction, cost containment remains a key focus area for us, and progress can be seen in the six-month review that we're going through We remain focused on enhancing quality through mining-grade optimization, reducing waste dilutions, and increasing volumes. Going to Amferos, headline earnings were lower due to 22% lower iron ore prices, a stronger exchange rate, and lower sales volume for the iron ore division. Higher average realized U.S. dollar Manganese oil prices and a better cost performance contributed positively to headline earnings, partially offset by a stronger exchange rate and lower export sales. Going to platinum, as I already mentioned, we've had some operational losses at Bukoni because of increased spending on mechanized development. mainly driven by the deadline development that we're opening, opening up the ore body in line with our mechanization strategy that we have shared previously. And the ore reserve development together with infrastructure costs. At two rivers, ramp up in mining development at North Shaft, together with increased finance costs, actually led to a reduction in our headline earnings. Mudigwa, as I mentioned earlier, The month of December was affected by the safety-related stoppages, and also we've had higher-than-normal rainfalls as well, which affected our open-pit mining that we started around October. Just on the coal side, lower export volumes and strong exchange rate as a result of reduced trucking. due to lower prices. I mean, we do have a cut-off price within which we decide when to track and when not to track. And during this period in question, we actually had to make a decision to stop tracking because the prices were lower than that limit price. In terms of the next slide, that talks to the EBITDA margins. I mean, the chairman has already alluded to the fact of, you know, the benefit of a diversified portfolio. I mean, this is quite evident here. The same reporting period last year, I mean, iron ore division really displayed 53% on the EBITDA, but reduced now to 41% because of the above-mentioned terms. But the benefit of this is that, of the diversified portfolio, is that when one commodity is down, I mean, the other is there to really back it up, and we have really seen that with the Manganese coming in, increasing their contribution during this reporting period. Moving into Ampharos, on the variance analysis, we see a decrease in prices and volume driven by the ANO division compared to the same reporting period last year. ANO increase in cash cost due to labor inflation, Lower production volumes and higher mining and plant maintenance expenses were experienced. Production volumes at BlackRock, as I mentioned, were 13% higher after management successfully addressed the ore quality issues. Sakura cash cost increased due to higher and increased manganese prices. On the iron ore site, Kumani mine remains our tier one asset with more than 10 years of life remaining, a high grade ore body and a lower stripping ratio comparatively speaking. Export iron ore volumes of 5.9 million were just about 2% slightly lower than what we had last year, the same reporting period. Local sales volume, were down 9% due to a reduced offtake from AMSA. As I mentioned, subsequent to the announcement, they basically reduced the offtake. And we had, for many years, really singled out our single supplier and single customer, AMSA, as the high risk for Biasuk Mine. Pleasing to mention that the ongoing industry initiatives, including private sector partnerships, PSP, Concessions in collaboration with Transnet to restore the rail port performance are progressing well, but which will require significant time and capital. Very pleasing also, as we mentioned, that obviously with Michelle as a leader, that we really have that open door policy. We openly engage, contrary to the previous leadership. Moving to Manganese O, BlackRock, is a high-grade, low-impurity, long-life ore body with installed capacity to produce over 4 million tons per annum, following the investment that we made, which stopped about two years ago. Production volumes, as I mentioned, at this mine were 13% higher, mainly to addressing those issues that affected performance over time. I mean, critical skills and also the issue of the challenging mining conditions. So the quality issues have been addressed And pleasing to say, the operation is stabilized and they actually continue to look for improvement opportunities to improve their margins. Capital expenditure at BlackRock decreased by 51% year on year due to lower replacement capital spent and certain non-critical projects that were deferred to preserve cash in line with the current market conditions. Manganese ore. High carbon ferromanganese export sales at Kato Rich Works and Sakura increased by 14% and 9% respectively due to improved market conditions. Unit cash cost at Sakura increased by 19%, mainly due to higher manganese oil prices. Kato Rich Works issued a section 189 and commenced with a facilitated consultation. Moving into the un-platinum, as highlighted earlier, Bukoni was the biggest contributor to losses in the platinum division. On the cash cost that is shown on the top left of 629 million, that includes 156 million that was really related to increase in Bukoni development costs, opening up the ore body, setting up the mine for mechanized mining as we have communicated previously. The average realized U.S. dollar prices for platinum and rhodium increased at 5% and 17%. However, palladium and chrome prices decreased during that reporting period. The significant unit cost cast improvement at Bukoni was due to higher production, even though it was lower than the guided numbers. Production at two rivers increased marginally as a result of an improved focus on the grate. As we said previously, we're mining through the split reef, but we seem to have really got it right, making sure that we mine the correct cut. And as I mentioned earlier, on the Mudikwa side, I mean, we had a challenge with regards to the safety-related stoppages, which affected our production performance. Just going into Bukoni mine, as the executive chair has already mentioned, it's a high-grade, high-quality ore body. We are in the production ramp-up. I mean, you'd remember that we mentioned that we've got two concentrator plants, the UG2 at 60 kilotons and the Merensky at 120. But over the period of time, we commissioned the UG2, because the focus was to basically focus on the UG2 horizon. So with that in operation, we need to mention that it's still neat into the future to ramp it up to the optimal site, significant capital injection. But at this point in time, taking into account the current price cycle where we are, we have basically made a decision that we're not going to basically proceed with a major capital growth. So what we are doing at this point in time, we're utilizing the 60 kiloton UG2 plant. We have focused on opening up the open pit. We've started really mining open pit in October and have ramped up to about 30,000 tons, which basically constitute about 50% of that capacity at high grade. We've stopped the mechanized development, which basically had a diluted grate because of waste and reef that was mined concurrently. And we're redeploying those efforts into focusing on available stoping and thus really increasing the feed grate into our concentrator. Pleasing to mention that we have seen some good grates reporting into the plant during the past month and as a result also increased feed. So the focus is basically making sure that we fill that plant with high-grade stuff and that we continue to work tirelessly on reducing costs. And to that effect, we have really issued a Section 189 process to right-size the mine. So the consultation process is currently underway at Bukoni. So this plan that we have really put in place is expected to minimize cash losses in line with can maintenance costs, at least can maintenance costs, so that we can keep the mine operating and be able to really explore other growth options when the price tends in the near future. The UG2 chrome recovery plant that we communicated previously, it's actually currently underway. and we will be commissioning that plant in June 2025. You remember that in the previous period, we mentioned that the board has approved the 120,000 tons of chrome recovery plant, and then it was going to take about 12 months to execute. So we have looked for opportunities, and that execution actually will be done by the end of June, which basically reduced... the execution time in this project. So we are currently looking at several value-enhancing projects, and then at the right time, as soon as those are concluded, we'll basically communicate it. And the objective of those value-enhancing projects is basically to enhance the revenue generation for the mine of Bukoni in the similar way that we have seen or the value that will really be enhanced by the Chrome Recovery Plant. Regarding Gomati, the latest update is that unconditional Section 11 approval and competition approval were actually received in December. So currently the two partners, which is ourselves and Norilsks, are basically closing up other remaining conditions precedent. In that slide as well, you'll see the disclosure in terms of the rehab liabilities. There was just a slight increase as a result of the unwinding interest recognized against that liability. Transitioning into arm coal, when you look at the variance analysis, you'll see the impact of decreased volumes on coal profits On-mine unit costs at GGV increased by 4% and 14% at PCB, largely due to decreased sales volume. As I mentioned earlier, because of where the prices were, the decision was made to stop tracking, which basically complemented the volumes in the previous period. Export sales volume decreased by 15% for the same reason. But what is very encouraging is that we have really seen a movement on the stockpile levels, there has been some significant depletion because of Transnet's performance that has marginally improved. I mean, if you have really been following the story on the coal line, you'd have heard that Transnet is now starting to hit one million tons per week, you know, almost consistently because of the interventions that they've done. And there's still room for improvement to really step it up because at 52, at one million per week, it basically yields forecast about 52 million tons, but you know that the installed capacity is higher than that. So a lot of work is currently taking place. And I think the next focus will be on sorting out the signaling system, which will also be able to unlock some value in the cold space. GGV's mine average received export price was steady at $91 a tonne. and the PCB average export price decreased by 4% to $84 a ton. GGV saleable production decreased by 7% for the same reason that I mentioned earlier with the stoppage of tracking of export coal. What is also noteworthy is a 7% reduction on capital at both GGV and PCB, just making sure that we continue to employ responsible capital managers expenditure and also capital allocation during this time. The Chairman has said a lot with regard to Harmony. You've heard how Harmony is performing and the fact that Arm will continue to consider and to evaluate all options relating to this strategic investment in Harmony with the objective of unlocking and creating value for Arm and its shareholders and stakeholders. Just an update on surge. Surge is the investment that we have in Canada. So what I just want to mention is that the mine or the project is making significant progress in advancing the pre-feasibility study for the Burke copper project, which is expected to be completed within the next two years. Just in closing, from my side, before I hand over to Sue, our key focus areas, disciplined capital allocation. I mean, this is quite evidenced from the slides. If you look at the PGM business, you'll see how the capital spend was reduced, also on the Amcol as well, and the Amferas as well. So we continue to look and opportunities of really making sure that we identify, defer what the capital that is really not really immediately required and optimize, you know, for alternative suppliers where opportunities arise. Maintaining a robust balance sheet. I mean, the executive chairman spoke to that and it is opening very, very crucial just to make sure that we have that flexibility for whatever positive opportunities or eventualities that may come our way. Ensuring globally competitive and profitable operations. That is our focus. And as I mentioned, even for a project, a Bokoni project, we've really had some review. And now we have a plan of action in terms of how we make sure to reduce the cash ban in line with our cash preservation. Decisive action on underperforming assets. I mean, continue to really look at and review assets. operations, making sure that they deliver in line with the expectations. And there are currently quite a lot of processes. There are currently quite a lot of review processes that are taking place, and some of them, I mean, at the right time when we have really landed, we'll basically share those results. Collaborating with key stakeholders to optimize logistics and infrastructure constraint, as I mentioned, especially the key service provider, Transnet. I mean, this is ongoing, and even the chairman did allude earlier that that Relet is working tirelessly and unreal with Transnet and also with All Users Forum and the Manganese MPC consortium that is really engaging, looking for opportunities and long-lasting structures that we really have to employ to make sure that we restore the Transnet or rail performance to its installed capacity. Exploring value-enhancing growth opportunities Search and the Berg project is actually such an example and we'll continue to explore those opportunities into the future. I'm going to hand over to Tsu who will take us through the finance section. Thank you.