Audited condensed consolidated annual results
Year ended 30 June 2010

The year under review has been one of the most difficult in the Company’s history. Not only did it have to contend with the global economic crisis, but also the impacts of both the tragedy at 14 Shaft and industrial action at the beginning of the period. On the positive side, significant progress was made in addressing the development issues at Rustenburg, the expansion at Zimplats was successfully commissioned and throughput at IRS grew significantly contributing to a 2% increase in gross production to 1.74 million ounces of platinum. Throughout this period the Company has maintained a strong balance sheet, remained cash positive and raised the dividend by 22% to 390 cents per share. (Final dividend of 270 cents per share).

Safety

Regrettably, the year started tragically when nine of our colleagues lost their lives in a single fall of ground incident at Impala Rustenburg. A further six colleagues died at the same operation during the course of the year bringing the total number of fatalities for the Group to 15, 14 in the first half and one in the second. We extend our deepest condolences to the families and friends of all those who died.

The goal of zero lost-time injuries is an ambitious target. However, we believe it is one we can achieve across the Group as evidenced by the safety performances in some of our higher-risk underground shafts. The key to achieving zero harm remains a safety-conscious workforce that adheres to the Company’s rigorous safety standards and embraces the concept of zero tolerance to non-compliance.

During the year we engaged Du Pont Safety Resources to review our safety systems and culture and to bench-mark these against world-class best practice. In addition, we commissioned an independent study to investigate the external socio-cultural factors that affect employee behaviour, particularly in the South African context. The relevant findings of these studies have been incorporated into our safety strategy and plans, where the focus is on ensuring that safety becomes every employee’s first priority.

Market overview

Despite demand levels for our major metals remaining subdued through 2009 following the global economic crisis, prices did manage to recover somewhat from their heavily oversold positions.

On the automotive side, significant production cuts in 2009 across the developed world brought bloated vehicle inventories back in line and led to a significant fall in demand for platinum, palladium and rhodium. The early part of 2010 has seen some recovery as scrappage and sales incentives boosted sales and subsequently production.

The lower prices experienced during 2009 allowed the Chinese platinum jewellery market to restock its pipeline, to the extent that sales to this region more than doubled.

The economic uncertainty steered investors away from risk during the period and lower prices coupled with the launch of a platinum and palladium Exchange Traded Funds in the US brought a surge of fresh demand, bringing with it a commensurate increase in price levels. In line with the higher price environment sales volumes on the Shanghai Gold exchange have declined by approximately 10% in the first half of 2010.

The overall reduction in demand was met by a contraction in supply leaving the market with a small deficit for 2009.

Financial review

Headline earnings for the financial year declined by 22% to 786 cents per share, from 1 001 cents per share in FY2009. Notwithstanding the decrease in headline earnings, the total dividend for the year improved by 22% to 390 cents per share.
Revenue reduced by 3% to R25.4 billion from R26.1 billion. This was a result of:

• sales volumes – higher production volumes as well as the sale of the rhodium stock built up in the prior year was offset by leases in lieu of cash advances of 58 000oz of platinum. Sales volumes accounted for R1.1 billion positive variance
• higher metal prices – in dollar terms platinum and palladium rose by 18% and 43% respectively, rhodium fell by 39%, overall dollar prices contributed to a positive price variance of R1.8 billion; and
• strengthening of R/$ exchange rate – the average exchange rate achieved for the year was R7.58/$, compared with R8.63/$ for FY2009. This resulted in a negative exchange rate variance of R3.6 billion.

Cost of sales rose by 6% to R17.3 billion from R16.4 billion in FY2009. There were several key drivers:

• wages and salaries were R550 million higher than the previous year;
• share-based compensation movement of R1.0 billion; and
• cost of metal purchases (net of change in stock) decreased by R1.2 billion.

The unit cost per platinum ounce produced deteriorated by 22% to R10 417/oz. Excluding sharebased compensation, unit cost per platinum ounce was up 11% to R10 089/oz. On a normalised basis, excluding the impact of the strike and the 14 Shaft change in mechanised mining, unit cost per platinum ounce was only 5% higher at R9 592/oz. Inflation accounted for 4% of the change.

Net cash generated from operating activities amounted to R5.9 billion of which R4.4 billion was utilised for investing activities, in respect of capital expenditure.

Net cash used in financing activities was R1.8 billion largely due to dividends.

The net result of Implats’ operating, investing and financing activities was a net cash inflow of R502 million. When combined with the opening balance of R3.4 billion this resulted in a closing cash and cash-equivalent balance of R3.9 billion.

The Group will continue to fund cash requirements from cash generated from operations, and will use its adequate banking facilities to cover any shortfalls.

Operational review

Gross platinum production was up by 2% to 1.74 million ounces despite the loss of approximately 80 000 ounces at Impala Rustenburg due to the 14 Shaft incident and strike action at the beginning of the period. Production was supported by a combination of higher mine to market and toll treatment throughputs.

IMPALA PLATINUM

Safety was unsatisfactory at Impala Rustenburg with a significant deterioration in both the fatality and lost-time injury frequency rates. Fifteen employees lost their lives at the operation during the year. The majority of these fatalities were due to falls of ground, followed by transport incidents and a methane explosion. In addition to the commissioning of the two independent studies as previously mentioned other safety initiatives included the extension of our safety and health programmes beyond the workplace to include community safety and health, as well as road safety.

Tonnes milled declined by 10.4% to 13.5 million mainly as a result of the 14 Shaft incident, the two-week industrial action and other safety stoppages. As highlighted last year, limited Merensky face availability at the major shafts continued to impact on the amount of Merensky ore milled which declined by 21% to 5.4 million tonnes. Despite the change in the ore mix ratio to 60:40 in favour of the lower platinum yield UG2, a marginal improvement in yield ameliorated the decline in refined platinum production, which fell by 8% from the previous year to 871 000 ounces. The lower output negatively impacted unit costs which increased by 17% to R10 003 per platinum ounce (excluding share-based compensation).

Going forward the operation will focus on maximizing production at the major shafts, namely 1,10, 11, 12 and 14 Shafts, and the dovetailing of the closure of the older shafts with the ramp-up of the new deeperlevel shafts. In the first case the emphasis will remain on on-reef development to ensure the requisite mining flexibility. As 20 and 16 Shafts come on stream, they will restore the ore mix ratio back to 50:50 and enhance productivity by replacing remnant mining with concentrated mining activity. This will restore production to a steady-state output of 1 million ounces of platinum per annum by FY2014.

ZIMPLATS

Zimplats delivered yet another world-class safety performance with no fatalities. Despite a deterioration in the lost-time injury frequency rate to 0.69 per million man-hours worked it remains one of the top mining operations in the Group in terms of safety.

FY2010 proved a truly outstanding operational year for Zimplats, crowned by the successful commissioning of the Phase 1 expansion, essentially on time and within budget. This project involved the development of two new underground mines, Portals 1 (Ngwarati) and 4 (Bimha), a new concentrator at Ngezi and additional infrastructure. The concentrator was commissioned in July 2009 and reached nameplate capacity of 2 million tonnes in September 2009. As a result tonnes milled increased by 89%, from 2.2 million in the previous year to 4.1 million and platinum production in matte rose by 81% to 173 900 ounces. Full throughput of 180 000 ounces of platinum in matte on an annualised basis will be achieved in FY2011.

Despite the dollarisation of the economy, which affected costs, higher production volumes resulted in unit costs declining by 22% to $1 007 per platinum ounce in matte. This firmly positions Zimplats as one of the lowest-cost primary platinum producers in the world.

The indigenisation regulations were gazetted by government earlier this year. Zimplats is confident its proposals which incorporate agreements concluded with the government of Zimbabwe will comply with the legislation.

The $450 million Phase 2 expansion was approved in May this year. This project involves the development of a new 2 million tonne underground mine, an additional concentrator module and other infrastructure. At nameplate capacity, milled tonnage will increase from the current 4.1 million to 6.1 million per annum and platinum production by 90 000 to 270 000 ounces per annum.

MARULA

Marula experienced another difficult year in virtually all aspects of the operation.

Although safety from a fatality perspective was excellent over the period with no fatalities, the lost-time injury frequency rate deteriorated from 5.35 to 9.39 per million man-hours worked. The results of the Du Pont safety review revealed a similar dependant culture to that at Impala Rustenburg. The same remedial actions are also being implemented at this operation.

The ramp-up in production stalled and tonnes milled declined marginally to 1.55 million. This was due to constrained mining flexibility as a result of a lack of adequate on-reef development, primarily at the Clapham conventional section which was impacted by logistical constraints. A number of steps have been taken to improve both machine and people logistics.

The lack of a build-up in mill tonnage coupled with work stoppages due to industrial action early in the year and lower recoveries resulted in platinum production reducing by 5% to 70 000 ounces in concentrate. Unit costs increased by 17% to R14 208 per platinum ounce in concentrate reflecting lower ounces and increased staffing levels.

The resolution of the logistical bottleneck will result in improved system and team efficiencies, increased face availability in the conventional section and improved on-reef development. Having reassessed the potential of the mine, steady-state production is estimated at 100 000 ounces of platinum in concentrate.

MIMOSA

Mimosa achieved another excellent safety performance with no fatalities during the period. The lost-time injury frequency rate improved by 33% to a new low of 0.35 per million man hours worked.

The recently completed Wedza Phase 5.5 expansion resulted in the operation reaching steady state production of 101 000 ounces of platinum in concentrate per annum. Unit costs increased by 14.7% to $1 194 per platinum ounce in concentrate as a result of the dollarisation of the economy, strengthening of the rand against the US dollar and higher mining costs.

During the year regulations on indigenisation were gazetted. The Company’s response to these proposals was submitted to the relevant authorities on 14 April 2010.

TWO RIVERS

Tonnes milled increased by 12% to 2.9 million as a result of plant modifications made during the plant optimisation process which was completed earlier in the year. Coupled with a 7% improvement in recoveries, platinum production was up 19% to 140 900 ounces in concentrate. The improvement in volumes is reflected in unit costs which declined by 4% to R8 463 per platinum ounce in concentrate.

Approval is still awaited from the Department of Mineral Resources to enable Implats to vend in portions 4, 5 and 6 of the farm Kalkfontein, as well as the area covered by the Tweefontein prospecting rights to Two Rivers. This transaction, when completed, will increase Implats’ holding by 4% to 49% in the Two Rivers joint venture.

A marginal improvement in tonnes milled, coupled with further improvements in concentrator recoveries, will result in platinum production increasing to 150 000 ounces by FY2013.

IMPALA REFINING SERVICES (IRS)

Platinum production rose by 15% to 870 000 ounces despite the continued suspension of operations at Everest. This was primarily due to the ramp-up in production at both Zimbabwean operations, namely Mimosa and Zimplats, a further increase from Two Rivers as a result of plant modifications and the start of production at the two new off-take projects, Blue Ridge and Smokey Hills.

In the short term, growth will come from continued ramp-up in production at Zimplats, Marula and Smokey Hills and the resumption of operations at Everest. In the longer term, growth will be underpinned by the Phase 2 expansion at Zimplats, restoration of full operations at Everest and increasing deliveries of autocatalysts in line with the organic development of this market.

CAPITAL EXPENDITURE

Group capital expenditure for the period under review totalled R4.6 billion compared to R7.0 billion in FY2009. The majority of this expenditure continued to be spent at Impala on the development of 16, 17 and 20 Shafts. These shafts had been planned to dovetail with the closure of the older shafts. The first shaft to commence production is 20 Shaft in FY2011, followed by 16 Shaft in FY2013 and 17 Shaft in the latter part of the decade. At full production these shafts will produce in the region of 500 000 ounces of platinum per annum. The bulk of the balance was spent at Zimplats on the Phase 1 Expansion.

Capital expenditure for FY2011 is estimated to be in the region of R7.1 billion. The Impala shafts and the Zimplats Phase 2 Expansion will account for most of the expenditure.

Prospects

The risks of returning to global recessionary conditions are decreasing through the concerted efforts of world governments to stimulate their economies. Notwithstanding this, it is forecast that a year of unenthusiastic economic growth can be expected prior to a full revival of the world economy. Given this scenario the platinum market is expected to remain in deficit for 2010, and remain as such thereafter as growing heavy duty diesel demand for platinum will encounter a challenging supply environment.

The group is positioned to benefit from improved medium- to long-term fundamentals for PGMs. The key to this is a stable and long-lasting production platform. The delivery of the new mining projects at Impala Rustenburg, the first of which is scheduled to commence production next year, provides this base. Growth opportunities exist throughout the Group. These will be developed in line with our growth profile to 2.1 million ounces of platinum by 2014.