2016 Interim Results

Lonmin Plc, ('Lonmin' or 'the Company'),one of the world's largestprimary platinum producers, today publishesits Interim Results for the period ended 31 March 2016 and an update on events to today's date. Lonmin has published today its Q2 Production Report in a separate announcement.

KEY FEATURES

Highlights -Significant progress in the delivery of the Business Plan following successful refinancing.

· Net cash has improved to $114 million as at 31 March 2016. This is compared with $185 million net debt at
30 September 2015. Total liquidity of $474 million (circa ZAR 7 billion) comprised gross cash of $264 million, before
deducting the drawn term loan of $150 million and undrawn debt facilities of $210 million.

· Reorganisation and s189 process successfully completed with 5,433 people having left the Group by 31 March. A
further 1,428 employees were reskilled and redeployed into vacant, more productive roles.

· Cost savings well ahead of schedule with R469 million savings achieved in H1 2016 (in FY15 money terms). This
represented 67.0% of the full-year target of R700 million.
· Continuing and sustained unit cost improvement. Half year PGM unit costs of R10,668, with PGM unit cost contained
to R10,390 per PGM ounce in Q2. Full year guidance of R10,400 is maintained.
· Implementing and delivering on our Business Plan as outlined in November 2015 has resulted in the business being
cash positive after capital expenditure in the second quarter of the year.

Operational Results

· LTIFR improved by 5.7% to 5.10 at 31 March 2016 from 5.41 at 30 September 2015 on a 12 month rolling basis. Regrettably our colleague, Mr Zilindile Ndumela, was fatally injured in October 2015 and after the period end Mr Goodman Mangisa and Mr Fanelekile Giyamawere fatally injured in separate incidents in April and May. We extend our deepest condolences to their families and friends.

· Total tonnes mined of 5.1 million in H1 2016 of which 76.6% was produced by our core Generation 2 shafts where production of 3.9 million tonnes was broadly flat on H1 2015. At our Generation 1 shafts production of 1.2 million tonnes in H1 2016 was down 0.5 million tonnes, or 27.7% in line with our promise to cut high cost production in an oversupplied market.

· Q1 saw a significant increase in section 54 safety stoppages, but improvements in our safety performance resulted in minimal safety stoppages in Q2.

· Productivity at our Generation 2 shafts at 5.9 square metres per mining employee in H1 2016 improved by 3.9% on H1 2015.

· Operational flexibility was preserved with the immediately available ore reserve position of 4.0 million square metres, or 22 months average production.

· Refined Platinum production of 348,885 ounces was up 33.0% or 86,582 ounces on prior year period. Processing throughput in the prior year period was impacted by smelter stoppages in December 2014.

· Smelter complex running normally in H1 2016. Number Two furnace was safely and successfully rebuilt and commissioned on schedule in early December 2015. The smaller Pyromet furnaces were utilised during this time.

· The Other Precious Metals Plant was successfully commissioned resulting in a cash-flow benefit of circa R116 million as a result of permanently reducing our metal in process stock.

· Platinum sales of 361,882 ounces were up 95,942 ounces or 36.1% on the prior year period when processing throughput was constrained.

· Merger of our BEE partner Shanduka with Pembani was completed thereby allowing Lonmin to maintain its BEE compliant status. Lonmin and Pembani are both committed to a long-standing mutually beneficial relationship.

Financial Results

· Full ZAR basket price of R10,962 was down 2.7% on the prior year period. The 25.4% decrease in Dollar PGM prices was largely offset by Rand weakness.

· Gross costs at R6,828 million were down R427 million on H1 2015 largely due to the reorganisation.

· EBITDA for the period was $36 million, this was $42 million higher than the LBITDA of $6 million H1 2015 largely due to the beneficial impact of our cost reductions.

· Loss per share at 1.8 cents was an improvement of 162.8 cents on the H1 2015 loss of 164.6 cents.

· Capital expenditure in H1 was contained to $27 million in-line with the Business Plan and benefitting from the
weaker Rand by circa $5 million.

Market Outlook:

· For the remainder of 2016 we expect automotive and chemical industry demand for platinum to remain firm despite current concerns over the diesel market and the economic headwinds in China. Demand should lift as emerging markets continue to catch up with the ever tightening emission standards of developed markets, leading to potentially higher PGM loadings.· The jewellery market is expected to be static during the year but still offers upside opportunity over the medium to long term.· Though current prices have trended upwards since the lows of Q1, prices are expected to remain lower than incentive prices for long term projects in the platinum industry.

Guidance:

· Sales guidance maintained at circa 700,000 platinum ounces.

· Unit costs guidance maintained at circa R10,400.

· Capex guidance reduced from $132 million to $105.

Ben Magara, Chief Executive Officer, said: 'These results reflect the positive momentum in Lonmin, we have delivered on our promise to restructure and cut high cost production in this oversupplied market while simultaneously reducing costs and improving cashflows. Quarter on quarter, Lonmin has reduced unit costs to R10,390 per PGM ounce and improved the net cash to $114 million; thus delivering on our promise at the time of the Rights Issue to be cash positive after capital in this subdued PGM pricing environment. There is still a lot of hard work ahead as we squeeze out more costs and drive operational improvements and our key risks remain safety and its related stoppages and relationships. Lonmin has long life, shallow mining assets and unrivaled processing expertise and an invaluable mine to market business.

Going forward, our investment in relationships and the concept of shared value will be extensively tested in the coming wage negotiations especially with the backdrop of local government elections. I am cautiously optimistic about wage negotiations as we have engaged continuously with our employees and unions on the economic realities that our Company has gone through, including the inevitable 5,433 colleagues that we had to sacrifice and lost their jobs. '

FINANCIAL HIGHLIGHTS

	6 months to 31 March 2016		6 months to 31 March 2015
Revenue	$515m		$508m
Underlying EBITDA	$29m		$8m
EBITDA / (LBITDA)	$36m		$(6)m
Underlying operating loss	$(22)m		$(70)m
Operating loss	$(15)m		$(84)m
Underlying loss before taxation	$(26)m		$(77)m
Loss before taxation	$(21)m		$(118)m
Underlying loss per share	(3.2)c		(127.1 )c
Loss per share	(1.8)c		(164.6)c
Trading cash outflow per share	(24.9)c		(354.1)c
Unit cost of production per PGM ounce	R10,668/oz		R10,516/oz
Capital expenditure	$27m		$65m
Free cash outflow per share	(37.3)c		(529.1)c
Net cash / (debt) as defined by the Group	$114m		$(282)m
Interest cover (times)	-		-
Gearing	-		8%

Footnotes:

i	Underlying results and loss per share are based on reported results and loss per share excluding the effect of special items as disclosed in note 3 to the interim statements.
ii	EBITDA / (LBITDA) is operating profit / (loss) before depreciation, amortisation and impairment of goodwill, intangibles and property, plant and equipment.
iii	Operating loss is defined as revenue less operating expenses before impairment of available for sale financial assets, finance income and expenses and before share of loss of equity accounted investments.
iv	Trading cash flow is defined as cash flow from operating activities.
v	Free cash flow is defined as trading cash flow less capital expenditure on property, plant and equipment and intangibles, proceeds from disposal of assets and dividends paid to non-controlling interests.
vi	Net cash / (debt) as defined by the Group comprises cash and cash equivalents, bank overdrafts repayable on demand and interest bearing loans and borrowings less unamortised bank fees, unless the unamortised bank fees relate to undrawn facilities in which case they are treated as other receivables.
vii	Interest cover is calculated for the twelve month periods to 31 March 2016 and 31 March 2015 on the underlying operating profit divided by the underlying net bank interest payable excluding exchange differences.
viii	Gearing is calculated as the net debt attributable to the Group divided by the total of the net debt attributable to the Group and equity shareholders' funds.
ix	The number of shares held prior to 20 November 2015 has been adjusted by a factor of 0.08 to reflect the bonus element of the Rights Issue.

ENQUIRIES

Investors / Analysts:

Lonmin

Tanya Chikanza (Head of Investor Relations)

+44 207 201 6007 /+27 11 218 8358

Media:

Cardew Group

Anthony Cardew	+44 207 930 0777
Sue Vey	+27 72 644 9777

Notes to editors

Lonmin, which is listed on both the London Stock Exchange and the Johannesburg Stock Exchange, is one of the world's largest primary producers of PGMs. These metals are essential for many industrial applications, especially catalytic converters for internal combustion engine emissions, as well as their widespread use in jewellery.

Lonmin's operations are situated in the Bushveld Igneous Complex in South Africa, where nearly 80% of known global PGM resources are located.

The Company creates value for shareholders through mining, refining and marketing PGMs and has a vertically integrated operational structure - from mine to market. Lonmin's mining operations extract ore from which the Process Operations produces refined PGMs for delivery to customers. Underpinning the operations is the Shared Services function which provides high quality levels of support and infrastructure across the operations.

For further information please visit our website: http://www.lonmin.com

CHIEF EXECUTIVE OFFICER'S REVIEW

1. Key Achievements

Implementing and delivering on our Business Plan as outlined in November 2015 has resulted in the business being cash positive after capital expenditure in the second quarter of the year. The Rights Issue was successfully completed in December 2015 and the revised bank debt facilities extended to May 2020 (assuming Lonmin exercises its option to extend the term until this date). Net cash has improved to $114 million at 31 March 2016. Gross cash, before deducting the drawn term loan of $150 million, was $264 million resulting in total liquidity of $474 million after taking into account undrawn bank facilities of $210 million.

Reorganisation of the Group in line with the Business Plan has been completed with 5,433 employees and contractors having left the Company by 31 March 2016 and a further 1,428 employees having been reskilled and redeployed into vacant, more productive roles. Planned cost savings of R0.7 billion in FY16 are on track with R469 million already saved in H1 (in FY15 money terms), representing 67.0% of the annual target. This has brought unit costs down from R10,959 in Q1 to R10,390 per PGM ounce in Q2, a 2.6% decrease on Q2 2015 despite an annual wage increase of 8.2%. The improvement in profitability generated underlying EBITDA of $29 million in H1 2016 up $21 million on the $8 million achieved in H1 2015.

The weak PGM price continued in the period, however, its impact has been offset by Rand weakness. Capital expenditure was contained to $27 million in line with the Business Plan and benefitted by circa $5 million from the Rand weakening against the Dollar.

Production from our Generation 2 shafts at 3.9 million tonnes was broadly flat on H1 2015 and production from the Generation 1 shafts at 1.2 million tonnes was down by 27.7% as these shafts are shut as part of our strategy to remove production of high cost ounces. Our smelting complex is running in line with expectations. Platinum sales of 361,882 ounces in H1 2016 were up 36.1% or 95,942 ounces on the prior year period when the processing throughput was impacted by smelter stoppages in December 2014.

2. Safety

Pleasingly our safety performance is showing improvements following renewed focus in this area. The rolling twelve month average Lost Time Injury Frequency Rate to 31 March 2016 was 5.10 incidents per million man hours and shows a steady improvement of 5.7% on September 2015 at 5.41.

Despite most safety indicators showing improvements, regrettably one of our colleagues, Mr Zilindile Ndumela, was fatally injured on 26 October 2015 at Rowland shaft. Subsequent to the period end two of our colleagues were fatally injured, Mr Goodman Mangisa at Pandora JV E3 Shaft on 6 April and Mr Fanelekile Giyamaat Rowland shaft on 7 May. We extend our deepest condolences to their families and friends. Focus on safety improvements remains a priority.

Whilst production from our mining operations was negatively impacted by section 54 safety stoppages in Q1 the improvement in our safety performance saw these reduce significantly in Q2. However, Q3 will be negatively impacted by sections 54 safety stoppages following the fatalities in April and May.

During the period our focus remained on injury and fatality prevention. Safety campaigns were launched with interventions to prevent finger injuries, a major contributor to our lost time injuries. Additional focus areas included the improvement of strata controls relating to 'Falls of Ground'. The Fall of Ground controls include support, barring and entry examination. Lonmin continued with the mining industry occupational safety and health (MOSH) initiatives and during the period fitted underground equipment with signalling devices as well as improving the scraping and rigging practices.

Focus areas for the second half of the year include continuing with the MOSH initiatives implementation; the implementation of Bapo Ba Mogale personal protection equipment contracts; cross-site safety audits to continue at all operations; the roll out of people and vehicle detection systems and the vehicle detection system on all trackless mobile equipment on surface and underground; implementation of the new explosive regulations; compliance audits on contractors and contractor management; and training will continue through on-the-job team coaching and leadership coaching sessions.

3. Delivering on the Business Plan

Balance Sheet

Liquidity at 31 March 2016 was $474 million comprising gross cash of $264 million and undrawn bank facilities of $210 million. After deducting the term loan of $150 million, net cash at 31 March 2016 was $114 million.

Reorganisationof the Group and Removal of High Cost Production

We have completed the reorganisation programme and the Commission for Conciliation, Mediation and Arbitration (CCMA) facilitated our s189 process.By 31 March 2016 5,433 people had left the Group and 1,428 employees had been reskilled and redeployed into vacant, more productive roles. This was achieved through active engagements and consultation with the trade unions, especially the majority union, AMCU and job losses were minimised and strike action and operational disruptions avoided. We believe that efforts invested by both Lonmin and the unions in building relations enabled this significant achievement. The voluntary and forced separation packages included severance pay and access to a portable skills training programme. One off redundancy costs paid in H1 2016 amounted to $13 million but was $22 million lower than originally anticipated due to the reskilling and redeployment of employees combined with a greater proportion of contractors departing and natural attrition. The Business Plan's operating model has now been fully implemented and the requisite structures are in place to ensure the success in line with the Business Plan.

The closure of inefficient areas and shafts with the highest cost of production is on track. 1B shaft was closed and placed on care and maintenance in October 2015 resulting in a decrease in tonnes mined in H1 2016 of circa 100,000 tonnes or about 4,800 saleable Platinum ounces when compared to H1 2015. Opencast operations have been wound down with only a small amount of ore recovered in H1 2016. This has resulted in a decrease on H2 2015 of circa 100,000 tonnes or about 4,625 saleable Platinum ounces.

Newman shaft will be closed and put on care and maintenance at the end of 2016 in line with our Business Plan. Circa 1,100 people are currently employed at this shaft of whom about 200 are contractors. Hossy shaft is to be closed and placed on care and maintenance by the end of FY17. This shaft currently employs circa 1,500 people of whom about 200 are contractors.

Mining operations at E1 and W1 shafts are to continue at least until the end of the financial year. These shafts currently employ circa 1,100 people of whom about 1,000 are contractors.

Productivity and Efficiencies

In order to further enhance the granularity of our reporting the following productivity and efficiency metrics have been included in the Operating Statistics section of this report.

· square metres per person - the average monthly square metres broken underground at the shaft divided by the average number of direct shaft employees (own employees and contractors working on the shaft excluding any other central services employee).

· square metres per crew - the average monthly square metres broken underground at the shaft divided by the average number of stoping crews and white area mining crews on the shaft.

· shaft head cost per tonne- direct shaft head costs, excluding any overheads and central service costs, per tonne hoisted

· shaft head cost per PGM ounce - direct shaft head costs, excluding any overheads and central service costs, per saleable PGM ounce produce

Productivity improved at our Generation 2 shafts, in terms of square metres per person, by 3.9% to 5.9 in H1 2016 from 5.7 in H1 2015. In terms of square metres per crew, productivity improved by 4.4% to 308 from 295 in H1 2015. Our Generation 2 shafts contributed 76.6% of total production with all seven Generation 1 shafts only contributing 23.4%.

· At Saffy shaft productivity increased significantly compared to H1 2015 as this shaft was ramped up to full production by September 2015. Square metres per person were up 23.8% to 5.4 and square metres per crew were up 22.8% to 278.

· Productivity at K3 and Rowland compared to H1 2015 was negatively impacted by an under complement of production employeeswhilst employees affected by the s189 process and reorganisation were reskilled and redeployed into vacant roles.

o K3 shaft - square metres per person were down 2.7% to 5.7 and per crew down 6.6% to 286

o Rowland shaft - square metres per person down 5.5% to 5.4 and per crew down 2.6% to 319

o We expect productivity at these shafts to improve in H2 2016

· 4B/1B shaft has the highest productivity and the closure of 1B has further improved efficiencies with square metres per person at 7.5 being 10.5% higher than the prior year period and square metres per crew at 386 were up 19.4% on the prior year period.

Cost Savings

In H1 2016 we achieved cost savings of R469 million in 2015 money terms. This represents 67.0% of our annual target of R0.7 billion cost savings in 2016 to be achieved through the reduction in the size of the Group's workforce, overhead costs and support service structures and the total cost of ownership projects. In H1 2016 labour costs were R416 million lower than the prior year period (in FY15 money terms) and total cost of ownership savings amounted to R53 million (in FY15 money terms).

In addition a further cash-flow benefit of circa R116 million has been realised as a result of permanently reducing our metal in process stock following thecommissioning of the Other Precious Metals Plant at the Precious Metals Refinery. The first product was produced from the upgraded facility in December 2015. Built at a cost of R110 million, the project is primarily aimed at improving the Rhodium and Iridium recoveries using third generation PGM refining technologies. Further benefits of a one-off reduction in metal in process are expected to be realised in the second half of the year once an optimised steady state of operation is reached.

Cost of Production per PGM ounce

Unit costs in H1 2016 at R10,668 per PGM ounce were only 1.4% higher than the prior year period despite the 8.2% year on year increase in labour costs. The distorting impact of the holidays in December typically results in unit costs peaking in the first half of the financial year and this is built into our plans.

The increase in mining and concentrating unit costs on H1 2015 were contained to 5.8% and 4.7% respectively. This was largely offset by a 21.6% decrease in smelting and refining unit costs as the processing throughput in the H1 2015 was impacted by smelter stoppages. Shared service unit costs and management and marketing services reduced year on year by 2.3% and 10.3% respectively due to the beneficial impact of the reorganisation and cost savings including the total cost of ownership programme.

Delivering on our Business Plan has resulted in the cost of production per PGM ounce in Q2 2016 being R10,390. This was 5.1% lower than Q1 of R10,959 and in line with the R10,339 achieved in FY15. Our stated aim is to achieve unit costs in FY16 which are flat on FY15 and we are pleased to be delivering on this objective.

The second half of the financial year is anticipated to benefit from the full impact of the reorganisation, driven by the Business Plan, which was completed in the first half of the financial year. Whilst the fourth quarter of the financial year bears the impact of the annual wage increases which will come into effect on 1 July 2016 in line with the rest of the Platinum majors, unit costs are anticipated to be lower in H2 than H1. We are maintaining our full year guidance for unit costs of R10,400 per PGM ounce. We are on track with our cost savings programme and remain vigilant in containing our costs.

Our stated aim is to manage the Business to be cash flow positive after capital expenditure in the near term low PGM pricing environment whilst maintaining optionality to grow production when pricing improves. Adding the cost of capital expenditure per PGM ounce sold to the cost of production per PGM ounce produced shows that the business was cash flow positive in Q2 2016 and that the initiatives we have implemented are enabling us to turnaround our business to achieve our goals.

Shaft head cost per tonne and per PGM ounce

Increases in shaft head cost per tonne and per PGM ounce at the Generation 2 shafts against H2 2015 were contained to 3.3% and 4.2% respectively despite the 8.2% year on year wage increase.

· At K3 shaft the shaft head cost per tonne and per PGM ounce was R868 and R7,270 respectively, an increase on H1 2015 of 3.6% and 1.2%.

· At Rowland shaft the shaft head cost per tonne and PGM ounce at R954 and R7,576 respectively represented an increase on H1 2015 of 17.9% and 23.5% reflecting the reduction in volumes produced during the reskilling and redeployment of certain employees.

· Saffy is now one of our lowest cost Generation 2 shafts at R847 per tonne and R6,755 per PGM ounce. This was an improvement in H1 2015 of 5.7% and 4.5% respectively.

· 4B/1B, also a lower cost Generation 2 shaft at R724 per tonne and R7,028 per PGM ounce, improved on H1 2015 by 2.9% and 0.8% respectively.

The cost per PGM ounce at the Generation 1 shafts at R7,056 was 1.4% lower than the Generation 2 shafts at R7,158 due to the ore body mined (Merensky only) and less dilution from development as these shafts are being managed for closure.

Bulk Tailings Treatment Plant

As reported on 28 January 2016 we are progressing towards securing third party funding for the Bulk Tailings Treatment plant. We have signed an agreement with the counterparty which is subject to various conditions precedent, including obtaining lender consent to the agreed terms.

Capital Expenditure

Our strategy is to minimise capital expenditure whilst ensuring compliance to regulatory and safety standards and ensuring that the immediately available ore reserve position is maintained at the level necessary to support planned production at the Generation 2 shafts. Capital expenditure in H1 was limited to $27 million, benefitting from the weaker Rand by circa $5 million versus the Business Plan. Capital invested in the period included $6 million for the Rowland MK2 project to mine the Middelkraal 2 UG2 ore from levels 18 to 27 via the Rowland shaft infrastructure.

As in previous years, capital expenditure is expected to be H2 weighted, however, as a result of the Rand being weaker than anticipated and a delay in the funding of the Bulk Tailing Treatment project (BTT) at the concentrating operations, capital expenditure guidance for FY16 has been reduced from circa $132 million to about $105 million (including circa $10 million for the Bulk Tailing Treatment plant expected to be funded by a third party). We do not expect the impact of the delay in the BTT project to be material to the production profile.

Summary of Capital Expenditure:

	6 months to 31 Mar 2015	6 months to 31 Mar 2016		12 months to 30 Sep 2016
				Revised Guidance
	$m	$m		$m
K3	11	7		19
Rowland	10	1		5
Rowland MK2	-	6		13
Saffy	5	-		-
Generation 2 shafts	26	14		37
K4	9	1		1
Hossy	6	-		0
Generation 1 & 3 shafts	15	1		1
Central and other mining	4	2		17
Total Mining	45	17		55
Concentrators	4	3		27
Smelting & Refining	12	5		13
Total Process	16	8		40
Hostel / Infill Apartments	3	2		8
Other	1	0		2
Total	65	27		105

4. Production Performance

Mining Operations

Total tonnes mined of 5.1 million in H1 2016 was a decrease of 10.6% or 0.6 million on the prior year period due the planned decrease in production from our Generation 1 shafts in line with the Business Plan strategy to remove high cost production.

Generation 2 shafts

Production from our Generation 2 shafts (K3, Rowland, Saffy and 4B/1B) was 3.9 million tonnes in H1 2016, broadly flat on the prior year period despite the planned closure of the 1B shaft. Since we are commencing an orderly shutdown and placement on care and maintenance of Hossy shaft, this shaft is reported as a Generation 1 shaft and prior periods have been restated accordingly.

· K3, our biggest shaft, produced 1,318,000 tonnes in H1 2016, a slight decrease of 1.4% on the prior year period.

· Saffy shaft produced 990,000 tonnes in H1 2016, an increase of 19.2% on the prior year period. This shaft has performed exceptionally well and is now operating at full production and achieved a record 200,079 tonnes in November.

· Rowland shaft produced 807,000 tonnes in H1 2016, which was a decrease of 12.9% on the prior year period driven by safety shut downs following the fatality in October 2015 and a delay in filling critical production vacancies due to the time taken to reskill and redeploy employees in line with the Group's reorganisation.

· 4B/1B produced 769,000 tonnes in H1 2016 as planned, a decrease of 6.3% or 52,000 as the 1B shaft was closed and placed on care and maintenance in October 2015.

Generation 1 shafts

Production from our Generation 1 shafts (Hossy, Newman, W1, E1, E2, E3 and Pandora (100%)) was 1.2 million tonnes, 27.7% or 0.5 million tonnes, lower than the prior year period but in line with the managed closure of high cost production.

K4 shaft remains on care and maintenance and a small amount of opencast ore was recovered in the period as this operation wound down.

Ore reserve development

The reserve position remains healthy such that our immediately available ore reserves at Marikana at the end of the H1 2016 were 4.0 million square metres. This was 0.1 million square metres lower than 30 September 2015 due to the planned depletion of immediately available ore reserves at the Generation 1 shafts as these shafts wind down. The immediately available ore reserves at the Generation 2 shafts, however, have not been depleted by the cost cutting initiatives. This level of ore reserves represents 22 months at average production (September 2015: 22 months) and provides operational flexibility.

Summary of Immediately Available Ore Reserves - million square metres (centares)

	30 Sep 2015	31 Mar 2016
	centares	centares
Generation 2	3.0	3.0
Generation 1	0.9	0.8
Generation 3 (K4 shaft on care and maintenance)	0.2	0.2
Total	4.1	4.0

Production Losses

Q1 2016 experienced a significant increase in Section 54 safety stoppages but due to the improvement in safety performance there were minimal safety stoppages in Q2. Overall for the half year, tonnes lost due to management induced safety stoppages, Section 54 safety stoppages and industrial action at 0.25 million tonnes were lower than the prior year period.

	H1 2016	H1 2015
	tonnes	tonnes
Section 54s	234,000	229,000
Management Induced Safety Stoppages	7,000	56,000
Industrial action	9,000	16,000
Total tonnes lost	250,000	301,000

Process Operations

Total tonnes milled in the half year period at 5.0 million tonnes were down 16.3% or 1.0 million tonnes on the prior year period.There was a small amount of opencast ore milled as stock piles were wound down.

Underground milled head grade was flat at 4.57 grammes per tonne in H1 2016. Overall the milled head grade was 4.55 grammes per tonne, up 0.8% on the prior year period at 4.52 grammes per tonne due to the decrease in lower grade opencast ore in the mix. Underground and overall concentrator recoveries for the half year at 86.8% continue to be strong. Total Platinum-in-concentrate for the period under review at 321,444 saleable ounces was 15.8% lower than H1 2015.

Total refined Platinum production for H1 2016 at 348,885 ounces was 33.0% or 86,582 ounces higher than the prior year period when the processing throughput was impacted by smelter stoppages in December 2014. Total PGMs produced in the period were 667,399 ounces, an increase of 33.1% on H1 2015. A planned shutdown of the Number Two furnace took place at the end of September 2015 for scheduled refractory brick replacement and design upgrades on the roof and off gas system. It was successfully rebuilt and commissioned safely in early December 2015. The Pyromet furnaces were utilised during this time to provide the additional smelting capacity required.

Platinum sales for H1 2016 at 361,882 ounces were up 36.1% or 95,942 ounces on the prior year period and PGM sales were up 35.8% to 699,269 ounces. During the period we have renewed our multiple year agreements with all our key customers who actively promote and deliver Lonmin's PGMs to a wide range of industrial customers in the US, Europe, Japan and other Asian countries.

The US Dollar basket price (including base metal revenue) at $736 per ounce during H1 2016 was down 25.4% on the prior year period while the corresponding Rand basket price at R10,962 per ounce was only 2.7% lower than H1 2015, favourably impacted by the Rand weakness. The average Rand to US Dollar exchange rate was 30.8% weaker at 15.02 compared to 11.48 in the prior year period.

Production statistics for Quarter Two of the year can be found in a separate announcement published today and on the Company's website: www.lonmin.com.

5. Preparations for the 2016 Wage Negotiations

The next wage increases will be effective from 1 July 2016. We are applying the collaborative relationship with our representative unions as part of the preparation for the 2016 wage negotiations. To date the Company and the union have completed work on the process issues from the 2014 wage agreement, providing the backdrop for constructive engagement between parties.

6. Our People and Corporate Citizenship Agenda

Relationship Building with Unions and Employees

The Company continues to focus on strengthening relations with the unions and ongoing communication about the state of the business. As a result of the maturing relationships, we concluded an agreement on the Easter work-in arrangements, resulting in improvements in attendance and production.

The Way We Work at Lonmin

Pivotal to delivering on our Business Plan has been the continued focus on communication and relationship building with our employees, further entrenching The Way We Work at Lonmin vision. As part of this process, we have embarked upon increased leadership site visits by all levels of management and union leadership.

Bapo ba Mogale Community - Procurement Benefits and Skills Upliftment

As announced on 26 November 2014, we successfully completed three BEE transactions in 2014 thus achieving the target of 26% HDSA equity empowerment required by the Mining Charter as well as more closely aligning the interests of Lonmin, our employees and our communities. As part of this the Bapo acquired a direct equity interest in Lonmin Plc in a transaction which included an undertaking by Lonmin to afford procurement opportunities to the Bapo. The awarding of these procurement contracts to the Bapo was designed to share the value created by Lonmin, to upskill local community members who are employed in these projects to the extent possible and to achieve a closer alignment of the interests of Lonmin and the Bapo, our host community. This, in turn, should make a real difference to the lives of community members, help improve living conditions and provide Lonmin with a stable and peaceful operating environment which is key to running the business. The objective of awarding contracts worth over R200 million to the Bapo has been achieved and we continue to look at additional procurement opportunities.

The Reviewed Mining Charter and Once Empowered Always Empowered Principle

The Reviewed Mining Charter was gazetted on 15 April 2016 for public comment during a 30 day consultation which the DMR Minister has subsequently indicated would be extended. Moreover the principle of Once Empowered Always Empowered is itself presently being considered by the courts, a judicial process which has yet to conclude.

In South Africa, the Chamber of Mines is responding to the DMR on behalf of all potentially affected companies, and Lonmin plays a full part in that organisation and that process. Whilst elements of the proposed Charter give cause for concern, we are confident that the various legal obstacles that the DMR will have to overcome prior to publication of the final Reviewed Charter, combined with on-going dialogue between industry and government, mean it is likely that the Revised Charter will ultimately be agreed through a consultative process. In the meantime Lonmin's 26% empowerment status remains unaffected.

Update on the Farlam Commission of Inquiry

The Farlam Commission of Inquiry submitted its findings and recommendations to the President of South Africa on 31 March 2015. Lonmin fully cooperated with the Commission, has learnt from its findings and has implemented actions to give effect to such findings. In addition, Lonmin has fulfilled its promise to employ the widows or relatives of the deceased miners. All statutory payments have been made to the families of the deceased miners and Lonmin continues to seek ways of assisting these families through the Sixteen Eight Memorial Trust founded in late-2012. Currently 143 dependent children are being educated through the Trust, with one beneficiary Mandla Yawa having just graduated with Honours in Animal production science and has enrolled for his masters.

Building a Shared Future with Communities

Lonmin continues to invest in socio-economic development projects that are aligned to enterprise and skills development, education and training, community health and social infrastructure, including housing, aimed at improving the quality of life of our employees, their families and our communities.

7. Pembani Group (Pembani) and Limpopo

As previously reported, the merger between Shanduka Group (Shanduka), our former BEE partner and Pembani completed in December 2015 with Pembani assuming all the rights and obligations previously held by Shanduka in Lonmin. Lonmin retains its BEE status. Pembani has indicated its commitment to the Platinum sector and we anticipate developing a long-standing mutually beneficial relationship.

The deadline for Pembani to exercise its option over Limpopo has been extended until 30 April 2017.

8. PGM Market Overview

Demand for Platinum Group Metals (PGMs) from our customers has remained consistent during the first half of our financial year. We have also expanded our customer base during this time to allow for increased diversity and value optimisation in line with our revised business plan.

Platinum

Commentators are aligned that the fundamental demand for platinum in 2016, though increasingly positive will be muted for the most part. Autocatalyst demand as the biggest demand segment at 43% is forecast to grow by circa 2%. Jewellery demand is anticipated to remain the second biggest demand segment for platinum at circa 36% and demand is expected to remain in line with 2015 levels. Industrial demand collectively is anticipated to make up about 17% of demand in 2016. The potential for growth particularly in glass and petrochemical refining is expected to see the segment growing by close to 7%.

In the longer term, total platinum demand is expected to grow by nearly one million ounces between 2015 and 2025. Autocatalysts are expected to remain the largest market and as emissions legislation globally continues to tighten demand for platinum should continue to grow. Western Europe is set to remain the most important diesel light vehicle market despite recent turmoil. Japan and North America are expected to be stable markets together contributing circa one million ounces. Growth is expected from India and the Rest of the World driven by expanding vehicle production and legislation of tighter emissions standards. India offers longer term growth potential.

The jewellery demand segment, at near parity with autocatalyst demand over the last few years, may rise more slowly than previously anticipated due to the anaemic economic conditions forecast for China.

Industrial demand is anticipated to lead the growth, especially in chemical and glass manufacturing. Chemical sector demand is set to be lifted by greater silicone elastomer and nitric acid production, mainly in China and the rest of the world, whilst the emerging fuel cell market should increase consumption reported in other end-uses. The average growth rate over the next 10 years is expected to be about 4.0%.

palladium

Demand for palladium is expected to grow by circa 1% in 2016. The lacklustre performance is largely due to the downward revision in automotive production in China. Industrial demand for palladium does offer some meaningful growth in the chemical sector this year with growth expectations of about 8% which is somewhat off-set by contractions expected in the dental (down approximately 3%) and jewellery (down circa 4%) sectors.

Total global palladium demand is forecast to grow by a compound annual growth rate of 2.5% over the next 10 years. palladium is now overwhelmingly an autocatalyst metal with growth from this sector forecast to add 1,626,000 ounces from 2015 to 2025, offsetting declines from industrial and jewellery demand expected over the same period.

Rhodium

Stable growth from the automotive sector and healthy growth in the glass sector is expected to result in a circa 6% increase in demand for Rhodium this year.

Outlook

Near term the increasing visibility of healthy demand fundamentals should reassert and subdued prices should gain upward momentum.

9. Management and Board Update

As announced on 12 April 2016, Simon Scott, who has served as our Chief Financial Officer for the last five and a half years will step down as CFO and Director of the Company following these Interim Results on 16 May 2016. After the Interim Results, Simon will continue to be involved in a transitional role. We all owe Simon a great deal of gratitude for the enormous effort he has made and the commitment and contribution he has given to our Company. I thank Simon for his support and wisdom over what has been a challenging period for our Company and I wish him the best for the future. Information pursuant to Section 430(2B) of the Companies Act 2006 in respect of Simon Scott is available on the Company's website.

We are pleased to be welcoming Barrie van der Merwe as Chief Financial Officer and Director with effect from 17 May 2016. He has extensive experience in the mining industry and brings with him a significant amount of knowledge of South Africa. Barrie is a Chartered Accountant and between 2012 and 2015 he was the Chief Financial Officer of Debswana Diamond Company (Pty) Limited, the world's leading producer of rough diamonds by value and a joint venture between the Botswana government and De Beers. Prior to this, he held several senior financial management positions with Anglo American Plc and Anglo Platinum Limited, spanning 10 years between 2002 and 2012, the last being Head of Finance, reporting directly to Anglo Platinum's then Finance Director.

As announced on 12 February 2016, Kennedy Bungane joined the Board as a Non-executive director effective from 1 March 2016. Kennedy is the CEO of Pembani Group Proprietary Limited (Pembani), which recently merged with Shanduka, Lonmin's Black Economic Empowerment partner. He was nominated to the Board pursuant to a contractual arrangement with Shanduka. Prior to Pembani, Kennedy was CEO of Barclays Africa Limited and was Chairman of both the UK incorporated Barclays Africa Limited board and the Barclays Africa Regional Management Executive Committee. Kennedy was also CEO of the Corporate and Investment Bank at Standard Bank of South Africa and a member of the Standard Bank Group Executive Committee.

10. Outlook and Guidance

The subdued PGM pricing environment appears likely to continue, offset by Rand weakness. In the absence of any unforeseen events, we are maintaining our sales guidance for the full year at circa 700,000 Platinum ounces. The completion of our restructuring programme, the aggressive cost reduction programme and pleasing operating performance has reduced unit costs from R10,959 in Q1 2016 to R10,393 in Q2 2016 which enables us to maintain the unit cost guidance of circa R10,400 per PGM ounce produced .

We are cutting our capital expenditure guidance for the year from about $132 million to circa $105 million.

Ben Magara

Chief Executive Officer

13 May 2016

Financial Review

Overview

We significantly strengthened our balance sheet during the period through a revised capital structure achieved by a successful Rights Issue in December 2015 and amendment and extension of bank debt facilities. This platform has allowed the Group to implement the Business Plan. We are pleased with the significant progress we have made during the period on delivering on the plan's key aspects, namely removing high cost production, reducing fixed cost expenses by right sizing the business, containing costs and minimising capital expenditure.

In Dollar terms, PGM prices were significantly lower in H1 2016 than H1 2015 but this was offset by asubstantial increase in PGM volumes sold due to processing throughput constraints in H1 2015. This resulted in a slight increase in revenue for the six months compared to the 2015 period.

The continued focus on cost containment coupled with the positive impact of the stronger Dollar has seen a decline in operating costs over the period. Unit costs for the period at R10,668 per PGM ounce were only 1.4% higher than the comparative period. EBITDA for the period was $36 million, this was $42 million higher than the LBITDA of $6 million achieved H1 2015 largely due to the beneficial impact of our cost reductions.

The Rights Issue raised $373 million net of expenses and exchange rate differences. A portion of the proceeds was used to repay original debt facilities. The amended bank facilities which became effective in December 2015 mature in May 2019 with Lonmin having the option to extend the maturity date to May 2020. At 31 March 2016 net cash for the Group stood at $114 million. Before deducting the drawn term loan of $150 million, gross cash was $264 million which when combined with undrawn revolving facilities of $210 million resulted in the Group having $474 million of total liquidity available.

Income Statement

The $48 million movement between the underlying operating loss of $22 million for the six months ended 31 March 2016 and the underlying operating loss of $70 million for the six months ended 31 March 2015 is analysed below:

		$m
	Period to 31 March 2015 reported operating loss	(84)
	Period to 31 March 2015 special items	14
	Period to 31 March 2015 underlying operating loss	(70)
	PGM price PGM volume PGM mix Base metals	(174) 169 21 (9)
	Revenue changes	7
	Cost changes (including positive foreign exchange impact of $180m and negative metal stock movement impact of $205m)	41
	Period to 31 March 2016 underlying operating loss	(22)
	Period to 31 March 2016 special items	7
	Period to 31 March 2016 reported operating loss	(15)

Revenue

Total revenue for the six months ended 31 March 2016 of $515 million reflects a marginal increase of $7 million compared to the prior year period. As noted in the Overview, the Dollar PGM prices were significantly lower than the prior year period and the average prices achieved on the key metals sold are shown below:

	Six months ended 31 March 2016	Six months ended 31 March 2015
	$/oz	$/oz
Platinum	905	1,187
palladium	551	784
Rhodium	689	1,182
PGM basket (excluding by-product revenue)	697	916
PGM basket (including by-product revenue)	736	988
ZAR PGM basket (excluding by-product revenue)	R10,394	R10,449

The US Dollar PGM basket price (excluding by-products) decreased by 24% compared to the 2015 comparative period, resulting in a reduction in revenue of $174 million. It should be noted that whilst the US Dollar basket price decreased compared to the 2015 period, in Rand terms the basket price (excluding by-products) remained largely flat supported by the weaker Rand.

The PGM sales volume for the six months to 31 March 2016 was 36% higher compared to the six months to 31 March 2015 which resulted in an increase in revenue of $169 million. The prior period was impacted by production throughput constraints due to smelter shut downs.

The mix of metals sold also resulted in a positive impact of $21 million mainly due to the higher proportion of Rhodium sold in the period under review as a result of the commissioning of the Other Precious Metals plant in December. Base metal revenue decreased by $9 million as a result of a reduction in volumes of Chrome sold as well as the reduction in metal prices of Nickel, Copper and Chrome compared to the 2015 period.

Operating costs (including metal stock movement)

Total underlying costs in US Dollar terms decreased by $41 million compared to the prior year period on the back of the weaker Rand, reorganisation, removal of high cost production and progress in cost reduction initiatives partially offset by the impact of metal stock movements. A track of the movements in operating costs is shown in the table below:

	$m
Six months ended 31 March 2015 - underlying costs	578
Increase / (decrease):
Marikana underground mining Marikana opencast mining Concentrating, smelting and refining Overheads	(17) (4) (6) (5)
Operating costs	(32)
Ore, concentrate and other purchases Metal stock movement Foreign exchange Depreciation and amortisation	(7) 205 (180) (27)
Cost changes including foreign exchange and metal stock movement impact	(41)
Six months ended 31 March 2016 - underlying costs	537

The positive impact of the removal of high cost production and reorganisation are evidenced across all our operations with the Marikana underground mining costs decreasing by $17 million or 4% during the review period, and concentrating, smelting and refining costs decreasing by 5% or $6 million when compared to the six months ended 31 March 2015.

Marikana opencast mining costs decreased from $4 million to a total of under $1 million as these operations have ceased and are being rehabilitated.

Overheads reduced by $5 million largely due to cost containment and the reorganisation programme while ore and concentrate purchases decreased by $7 million mainly due to lower volumes produced by the suppliers.

The movement in metal stock of $205 million comprises a decrease of $81 million in the six months ended 31 March 2016 and an increase in the prior year period of $124 million which was largely due to the processing throughput constraints in H1 2015.

The US Dollar strengthened significantly against the Rand during the period under review averaging ZAR15.02 to USD1 compared to an average of ZAR11.48 to USD1 in the 2015 period resulting in a $180 million positive impact on operating costs.

Depreciation and amortisation decreased by $27 million over the 2016 period mainly due to the impairment of assets in September 2015. The reduced production from the Generation 1 shafts in line with our closure plans also had an impact on the depreciation charge as depreciation is calculated on a units-of-production basis, spreading costs in relation to proven and probable reserves.

Cost of production per PGM ounce

Unit cost per PGM ounce of R10,668 for the six months under review was 1.4% higher than the prior year period reflecting the progress made in reducing high cost production and cost control.

Further details of unit costs can be found in the Chief Executive Officer's review and the Operating Statistics.

Special operating costs

Special operating costs for the six months ended 31 March 2016 are made up as follows:

		Six months ended 31 March
		2016			2015
				$m	$m
Restructuring and reorganisation costs (reversal of provision)			(22)		-
Debt refinancing costs			10		-
Share based payments			5		-
BEE charges
- Lock-in premium - Legal and consulting fees			- -		13 2
Other			-		(1)
			(7)		14

Net special costs decreased by $21 million to $7 million net special profit for the six months ended 31 March 2016. The planned reorganisation of the business was achieved at a lower cost due to the reskilling and redeployment of employees combined with a greater proportion of contractors departing as well as natural attrition resulting in a $22 million reversal of the 2015 provision for restructuring costs. Costs incurred to amend the bank debt facilities amounted to $10 million while the revision of pre-existing employee share option schemes as a result of the Rights Issue resulted in the acceleration of share based expenses to the amount of $5 million.

For the period ended 31 March 2015, $14 million was incurred which largely comprised $13 million for the lock-in premium paid to the Bapo in relation to the BEE transaction concluded in December 2014 as well as legal and consulting costs of $2 million related to the transaction.

Net Finance costs

	6 months to 31 March
	2016 $m		2015 $m
Net bank interest and fees	(9)		(11)
Capitalised interest payable and fees	1		6
Exchange	9		4
Other	(3)		(4)
Underlying net finance costs	(2)		(5)
HDSA receivable	(7)		(27)
Foreign exchange gains on the Rights Issue proceeds	5		-
Net finance costs	(4)		(32)

The total net finance costs of $4 million for the six months ended 31 March 2016 represent a $28 million reduction compared to total net finance costs of $32 million for the six months ended 31 March 2015.

Net bank interest and fees decreased from $11 million to $9 million for the six months ended 31 March 2016 largely as a result of the repayment of debt facilities following the successful Right Issue. This resulted in a reduction in drawn facilities during the period under review. Interest totalling $1 million was capitalised to assets (2015 - $6 million).

The Historically Disadvantaged South Africans (HDSA) receivable, being the Sterling loan to Pembani Group (Proprietary) Limited (Pembani) was impacted by interest accruals and exchange movements. The loan was granted to Shanduka Resources Group (Proprietary) Limited, our former BEE partner, that has now merged with Pembani, and the merged entity operates as Pembani Group (Proprietary) Limited. Net finance costs of $7 million for the period to 31 March 2016 consist of adverse exchange movements of $21 million which were partially offset by accrued interest of $14 million.

The $5 million foreign exchange gains on the Rights Issue comprise the gains on translation of advanced cash proceeds received prior to the effective date of the Rights Issue as well as hedging gains on forward exchange contracts entered into to minimise the risk of the exposure to currency fluctuations on the Rand and Pound Sterling proceeds.

Taxation

Reported tax for the six months ended 31 March 2016 was a credit of $15 million compared to $33 million for the period ended 31 March 2015. The underlying tax credit of $15 million in 2016 is largely made up of temporary differences giving rise to deferred tax credits and also takes into account exchange gains on the retranslation of Rand denominated deferred tax liabilities ($5 million) and the tax impact of special items ($5 million). In the prior year period exchange gains had an effect of $21 million on the tax credit while special items had an effect of $3 million.

Our philosophy on taxation is to comply with the tax legislation of all the countries in which we operate by paying all taxes due and payable in those countries in terms of the applicable tax laws. Transactions entered into by the Group are structured to follow bona fide business rationale and tax principles. We recognise that in order to be a sustainable and responsible business, the Group must have appropriate tax policies that are adhered to and managed properly. We seek to maintain a proactive and cooperative relationship with local tax authorities in all our business and tax transactions and conduct all such transactions in a transparent manner.

With the Group's primary operations being in South Africa, the tax liability follows such activity which has the effect that the majority of the Group's taxes are paid in that country. Following the financial crisis of 2008, the events at Marikana of 2012, the five month industry-wide strike in 2014 and more recently the decline in metal prices, all of which have adversely impacted profitability, the level of corporate tax has reduced. However, the Group continues to pay significant amounts in respect of other forms of tax including:

· Employee taxes

· Customs and excise duties

· Value Added Tax

· State royalties

Our philosophy on transfer pricing is that related party transactions should be charged at arm's length prices. Transfer pricing studies were performed by transfer pricing specialists on all our related party transactions and such transactions were found to be within acceptable norms compared to comparable transactions in similar companies. Lonmin inherited a number of companies in tax haven jurisdictions from previous unbundling and acquisition transactions. These companies are dormant entities and therefore do not receive any income. Furthermore, Lonmin does not pay any of its income to any of the dormant tax haven companies in these inherited structures.

Cash generation and net cash

The following table summarises the main components of the cash flow during the period:

			Six months ended 31 March
			2016		2015
			$m		$m
Operating loss			(15)		(84)
Depreciation, amortisation and impairment			51		78
Changes in working capital			(94)		(164)
Other			15		8
Cash flow utilised in operations			(43)		(162)
Interest and finance costs			(11)		(8)
Trading cash outflow			(54)		(170)
Capital expenditure			(27)		(65)
Dividends paid to minority shareholders			-		(19)
Free cash outflow			(81)		(254)
Contributions to joint venture			(2)		(2)
Net proceeds from equity issuance			368		-
Cash inflow/(outflow)			285		(256)
Opening net debt			(185)		(29)
Foreign exchange			14		3
Closing net cash/(debt)			114		(282)
Trading cash outflow (cents per share)			(24.9)c		(354.1)c
Free cash outflow (cents per share)			(37.3)c		(529.1)c

Cash flow utilised in operations in the six months ended 31 March 2016 at $43 million decreased by $119 million compared to $162 million for the same period in 2015. The prior period was impacted by the stock build-up due to the throughput constraints. In the current year, more volumes were sold which resulted in a positive impact on working capital. However, operating cash flow for the six months remained negative impacted by seasonal adverse working capital movements and $13 million one off voluntary separation payments as part of the reorganisation.

Trading cash outflow for the six months to 31 March 2016 amounted to $54 million. The trading cash outflow per share was 24.9 cents for the six months ended 31 March 2016 (2015 - 354.1 cents).

Capital expenditure at $27 million was $38 million lower than the prior year as we followed our strategy of minimising capital expenditure whilst ensuring compliance to regulatory and safety standards and ensuring that the immediately available ore reserve position is maintained at the level necessary to support planned production at the Generation 2 shafts.

The successful Rights Issue and amendment of debt facilities has resulted in a reversal from a net debt position of $282 at the end of the prior period to a net cash position of $114 million at 31 March 2016.

Principal Risks And Uncertainties

The Group faces many risks in the operation of its business. The Group's strategy takes into account known risks, but risks will exist of which we are currently unaware. The principal risks and uncertainties highlighted in our 2015 annual report have largely remained unchanged.

Financial Risk Management

The main financial risks faced by the Group relate to the availability of funds to meet business needs (liquidity risk), the risk of default by counterparties to financial transactions (credit risk) and fluctuations in interest, foreign exchange rates and commodity prices (market risk). Factors which are outside the control of management which can have a significant impact on the business remain, specifically, the fluctuations in the Rand/US Dollar exchange rate and PGM commodity prices.

These are the critical factors to consider when addressing the issue of whether the Group is a Going Concern.

Liquidity Risk

The policy on liquidity is to ensure that the Group has sufficient funds to facilitate all on-going operations. The Group funds its operations through a mixture of equity funding and borrowings. The Group's philosophy is to maintain an appropriately low level of financial gearing given the exposure of the business to fluctuations in PGM commodity prices and the Rand / US Dollar exchange rate. We ordinarily seek to fund capital requirements from equity.

As part of the annual budgeting and long-term planning process, the Group's cash flow forecast is reviewed and approved by the Board. The cash flow forecast is amended on an ongoing basis for any significant changes in the key assumptions identified during the year.

Where funding requirements are identified from the cash flow forecast, appropriate measures are taken to ensure these requirements can be satisfied. Factors taken into consideration are:

· the size and nature of the requirement;

· preferred sources of finance applying key criteria of cost, commitment, availability, security / covenant conditions;

· recommended counterparties, fees and market conditions; and

· covenants, guarantees and other financial commitments.

During the period under review, the Group revised its capital structure through a successful Rights Issue and amended debt facilities. Lonmin has used part of the proceeds from the Rights Issue to fully repay the amounts drawn on the original revolving credit facilities, leaving $150 million fully drawn on the USD term loan and $210 million in revolving credit facilities available to draw on when required. The amended facilities came into effect in December 2015.

Following the amendment, the Group's debt facilities are summarised as follows:

· Revolving credit facilities totalling $75 million and a $150 million term loan, at a Lonmin Plc Level, which mature in May 2020 (assuming Lonmin exercises its option to extend the term up until this date)

· Revolving credit facility totalling R1,980 million, at a Western Platinum Limited level, which matures in May 2020 (assuming Lonmin exercises its option to extend the term up until this date).

The following covenants apply to these facilities:

· The consolidated tangible net worth of the Group will not be at any time less than US$1,100 million.

· The consolidated debt of the Group will not at any time exceed an amount equal to 35% of consolidated tangible net worth of the Group

· The liquidity for the Group will not, for any week from 1 January 2016, be less than $20,000,000;

· The capital expenditure of the Group (excluding any Bulk Tailings Agreement) shall not exceed the limits set out in the table below. The Company shall also have the option to carry forward or back up to 10% of the limits set out in the table below.

	Capex Limit
1 October 2015 - 30 September 2016 (inclusive)	ZAR1,338 million
1 October 2016 - 30 September 2017 (inclusive)	ZAR1,242 million
1 October 2017 - 30 September 2018 (inclusive)	ZAR2,511 million
1 October 2018 - 30 September 2019 (inclusive)	ZAR3,194 million
1 October 2019 - 31 May 2020 (inclusive)	ZAR4,049 million

There is also additional limit on capital expenditure in relation to any Bulk Tailings Agreement as set out below:

Financial Year	Bulk Tailings Capex Limit
1 October 2015 - 30 September 2016 (inclusive)	ZAR370 million
1 October 2016 - 30 September 2017 (inclusive)	ZAR182 million

The limit on capital expenditure in relation to any Bulk Tailings Agreement after 30 September 2017 will be zero.

Credit Risk

Banking Counterparties

Banking counterparty credit risk is managed by spreading financial transactions across an approved list of counterparties of high credit quality. Banking counterparties are approved by the Board and consist of the ten banks that participate in Lonmin's bank debt facilities.

Trade Receivables

The Group is exposed to significant trade receivable credit risk through the sale of PGMs to a limited group of customers.

This risk is managed as follows:

· aged analysis is performed on trade receivable balances and reviewed on a monthly basis;

· credit ratings are obtained on any new customers and the credit ratings of existing customers are monitored on an on-going basis;

· credit limits are set for customers; and

· trigger points and escalation procedures are clearly defined.

It should be noted that a significant portion of Lonmin's revenue is from two key customers. However, both of these customers have strong investment grade ratings and their payment terms are very short, thereby reducing trade receivable credit risk significantly.

HDSA Receivables

HDSA receivables are secured on the HDSA's shareholding in Incwala Resources (Pty) Limited which, at 31 March 2016, was valued at $95 million. Refer to note 8 in the financial statements for details on the valuation of this security.

Interest Rate Risk

Given the amended debt facilities, this risk is not considered to be high at this point in time. The interest position is kept under constant review in conjunction with the liquidity policy outlined above and the future funding requirements of the business.

Foreign Currency Risk

The Group's operations are predominantly based in South Africa and the majority of the revenue stream is in US Dollars. However, the bulk of the Group's operating costs and taxes are paid in Rand. Most of the cash received in South Africa is in US Dollars. Most of the Group's funding sources are in US Dollars.

The Group's reporting currency is the US Dollar and the share capital of the Company is based in US Dollars.

Other than the hedging of Rights Issue proceeds, there was no other foreign currency hedging undertaken during the period under review. Therefore fluctuations in the Rand to US Dollar exchange rate can have a significant impact on the Group's results.

Commodity Price Risk

Our policy is not to hedge commodity price exposure on PGMs, excluding gold, and therefore any change in prices will have a direct effect on the Group's trading results.

For base metals and gold, hedging is undertaken where the Board determines that it is in the Group's interest to hedge a proportion of future cash flows. The policy allows Lonmin to hedge up to a maximum of 75% of the future cash flows from the sale of these products looking forward over the next 12 to 24 months. The Group did not undertake any hedging of base metals under this authority in the period under review and no forward contracts were in place in respect of base metals at the end of the period.

In respect of gold, Lonmin entered into a prepaid sale of 75% of its current gold production for the next 54 months in March 2012. In terms of this contract Lonmin will deliver 70,700 ounces of gold over the period with delivery on a quarterly basis and in return received an upfront payment of $107 million. The upfront receipt was accounted for as deferred revenue on our balance sheet and is being released to profit and loss as deliveries take place at an average price of $1,510/oz delivered.

Contingent Liabilities

The Group provided third party guarantees tothe Department of Mineral Resources for an amount of $40 million. At 31 March 2016, total guarantees amounted to $41 million which included $1 million provided to various other third parties.

Simon Scott

Chief Financial Officer

Operating Statistics for the 6 months to 31 March 2016

			Units	6 months to 31 March 2016	6 months to 31 March 2015
Tonnes mined	Generation 2	K3 shaft	kt	1,318	1,336
		Rowland shaft	kt	807	926
		Saffy shaft	kt	990	830
		4B/1B shaft	kt	769	821
		Generation 2	kt	3,884	3,914
	Generation 1	Hossy shaft	kt	334	533
		Newman shaft	kt	245	399
		W1 shaft	kt	88	90
		East 1 shaft	kt	70	74
		East 2 shaft	kt	154	193
		East 3 shaft	kt	23	32
		Pandora (100%)	kt	265	310
		Generation 1	kt	1,179	1,632
	Generation 3	K4 shaft	kt	0	23
		Total underground	kt	5,063	5,569
		Opencast	kt	10	108
	Lonmin (100%)	Total tonnes mined (100%)	kt	5,073	5,677
		% tonnes mined from UG2 reef (100%)	%	76.2%	76.1%
	Lonmin (attributable)	Underground & Opencast	kt	4,940	5,512
Ounces Mined	Lonmin excluding Pandora	Pt ounces	oz	303,367	338,545
	Pandora (100%)	Pt ounces	oz	18,060	21,115
	Lonmin	Pt ounces	oz	321,427	359,660
	Lonmin excluding Pandora	PGM ounces	oz	582,085	648,818
	Pandora (100%)	PGM ounces	oz	35,425	41,612
	Lonmin	PGM ounces	oz	617,510	690,430
Tonnes milled	Marikana	Underground	kt	4,725	5,485
		Opencast	kt	50	206
		Total	kt	4,775	5,691
	Pandora	Underground	kt	265	328
	Lonmin Platinum	Underground	kt	4,989	5,813
		Opencast	kt	50	206
		Total	kt	5,040	6,020
Milled head grade	Lonmin Platinum	Underground	g/t	4.57	4.57
		Opencast	g/t	2.77	3.07
		Total	g/t	4.55	4.52
Concentrator	Lonmin Platinum	Underground	%	86.8	87.0
recovery rate		Opencast	%	83.9	85.2
		Total	%	86.8	87.0

Operating Statistics for the 6 months to 31 March 2016 (continued)

			Units	6 months to 31 March 2016	6 months to 31 March 2015
Metals-in-	Marikana	Platinum	oz	301,119	356,525
concentrate		palladium	oz	140,126	164,187
		Gold	oz	7,223	8,414
		Rhodium	oz	43,649	52,867
		Ruthenium	oz	70,991	85,390
		Iridium	oz	13,984	16,527
		Total PGMs	oz	577,092	683,909
	Pandora	Platinum	oz	18,060	22,210
		palladium	oz	8,421	10,298
		Gold	oz	53	81
		Rhodium	oz	2,990	3,819
		Ruthenium	oz	4,920	6,188
		Iridium	oz	981	1,174
		Total PGMs	oz	35,425	43,770
	Lonmin Platinum before	Platinum	oz	319,179	378,736
	concentrate purchases	palladium	oz	148,547	174,485
		Gold	oz	7,275	8,494
		Rhodium	oz	46,640	56,685
		Ruthenium	oz	75,912	91,578
		Iridium	oz	14,965	17,700
		Total PGMs	oz	612,517	727,679
	Concentrate purchases	Platinum	oz	2,265	3,249
		palladium	oz	811	996
		Gold	oz	9	11
		Rhodium	oz	301	413
		Ruthenium	oz	473	545
		Iridium	oz	121	169
		Total PGMs	oz	3,980	5,383
	Lonmin Platinum	Platinum	oz	321,444	381,984
		palladium	oz	149,358	175,481
		Gold	oz	7,284	8,505
		Rhodium	oz	46,941	57,099
		Ruthenium	oz	76,385	92,123
		Iridium	oz	15,086	17,870
		Total PGMs	oz	616,497	733,062
		Nickel	MT	1,564	1,838
		Copper	MT	945	1,127

Operating Statistics for the 6 months to 31 March 2016 (continued)

			Units	6 months to 31 March 2016	6 months to 31 March 2015
Refined production	Lonmin refined metal production	Platinum	oz	346,763	261,807
		palladium	oz	155,097	120,080
		Gold	oz	9,528	6,670
		Rhodium	oz	53,770	36,898
		Ruthenium	oz	78,423	60,922
		Iridium	oz	20,441	11,903
		Total PGMs	oz	664,022	498,280
	Toll refined metal production	Platinum	oz	2,121	496
		palladium	oz	499	186
		Gold	oz	20	9
		Rhodium	oz	135	26
		Ruthenium	oz	565	1,946
		Iridium	oz	36	513
		Total PGMs	oz	3,376	3,176
	Total refined PGMs	Platinum	oz	348,885	262,303
		palladium	oz	155,597	120,267
		Gold	oz	9,547	6,679
		Rhodium	oz	53,906	36,924
		Ruthenium	oz	78,988	62,868
		Iridium	oz	20,476	12,416
		Total PGMs	oz	667,399	501,456
	Base metals	Nickel	MT	1,743	1,357
		Copper	MT	1,012	786
Sales	Lonmin Platinum	Platinum	oz	361,882	265,940
		palladium	oz	162,744	124,248
		Gold	oz	10,645	7,050
		Rhodium	oz	61,161	31,189
		Ruthenium	oz	82,094	73,600
		Iridium	oz	20,742	12,720
		Total PGMs	oz	699,269	514,747
		Nickel	MT	1,781	1,501
		Copper	MT	1,078	784
		Chrome	MT	752,979	767,413
Average prices		Platinum	$/oz	905	1,187
		palladium	$/oz	551	784
		Gold	$/oz	1,363	1,510
		Rhodium	$/oz	689	1,182
		Basket price of PGMs	$/oz	697	916
		Basket price of PGMs	$/oz	736	988
		Basket price of PGMs	R/oz	10,394	10,449
		Basket price of PGMs	R/oz	10,962	11,263
		Nickel	$/MT	6,946	12,263
		Copper	$/MT	4,464	6,084
Capital			Rm	403	745
expenditure			$m	27	65
Employees and	as at 31 March	Employees	#	25,543	28,462
contractors	as at 31 March	Contractors	#	7,088	9,398

Operating Statistics for the 6 months to 31 March 2016 (continued)

				Units	6 months to 31 March 2016	6 months to 31 March 2015
Productivity	m per mining employee (shaft head)		K3 shaft	m/person	5.7	5.9
(Generation 2)			4B/1B shaft	m/person	7.5	6.8
			Rowland shaft	m/person	5.4	5.7
			Saffy shaft	m/person	5.4	4.4
			Generation 2	m/person	5.9	5.7
	m per stoping & white area crew		K3 shaft	m/crew	286.3	306.4
			4B/1B shaft	m/crew	386.2	323.5
			Rowland shaft	m/crew	318.5	327.1
			Saffy shaft	m/crew	278.1	226.5
			Generation 2	m/crew	308.2	295.1
Exchange rates	Average rate for period			R/$	15.02	11.48
				£/$	1.47	1.55
	Closing rate			R/$	14.71	12.13
				£/$	1.44	1.48
Underlying cost	PGM operations		Mining	$m	(297)	(406)
of sales	segment		Concentrating	$m	(51)	(75)
			Smelting and refining	$m	(46)	(57)
			Shared services	$m	(26)	(42)
			Management and marketing services	$m	(8)	(15)
			Ore and concentrate purchases	$m	(17)	(30)
			Limpopo mining	$m	(1)	(1)
			Royalties	$m	(3)	(5)
			Share based payments	$m	(10)	(5)
			Inventory movement	$m	(37)	124
			FX and Group charges	$m	18	19
	Total PGM Operations segment			$m	(479)	(492)
			Exploration - excluding FX	$m	(3)	(4)
			FX	$m	(4)	(4)
	Total underlying cost of sales			$m	(486)	(500)
	PGM operations segment		Mining	Rm	(4,424)	(4,662)
			Concentrating	Rm	(753)	(855)
			Smelting and refining	Rm	(681)	(653)
			Shared services	Rm	(384)	(468)
			Management and marketing
			services	Rm	(120)	(159)
		Ore and concentrate purchases		Rm	(259)	(343)
		Limpopo mining		Rm	(8)	(12)
		ESOP & Community trust donations			(2)	-
		Royalties		Rm	(45)	(47)
		Share based payments		Rm	(152)	(56)
		Inventory movement		Rm	(351)	2,152
		FX and group charges		Rm	(1,017)	(871)
				Rm	(8,196)	(5,974)

Operating Statistics for the 6 months to 31 March 2016 (continued)

			Units	6 months to 31 March 2016	6 months to 31 March 2015
Shaft head unit costs -	Rand per tonne	K3 shaft	R/T	(868)	(838)
underground		4B/1B shaft	R/T	(724)	(745)
operations		Rowland shaft	R/T	(954)	(809)
excluding K4		Saffy shaft	R/T	(847)	(898)
		Generation 2	R/T	(852)	(824)
		Hossy shaft	R/T	(965)	(849)
		Newman shaft	R/T	(852)	(746)
		East 1 shaft	R/T	(1,010)	(1,025)
		East 2 shaft	R/T	(928)	(813)
		East 3 shaft & ore purchases	R/T	(921)	(903)
		W1 shaft	R/T	(914)	(877)
		Generation 1	R/T	(925)	(840)
		Total Underground excl. K4	R/T	(869)	(829)
	Rand per PGM oz	K3 shaft	R/oz	(7,270)	(7,183)
		4B/1B shaft	R/oz	(7,028)	(7,085)
		Rowland shaft	R/oz	(7,576)	(6,136)
		Saffy shaft	R/oz	(6,755)	(7,077)
		Generation 2	R/oz	(7,158)	(6,869)
		Hossy shaft	R/oz	(7,526)	(7,643)
		Newman shaft	R/oz	(6,529)	(5,319)
		East 1 shaft	R/oz	(7,739)	(7,297)
		East 2 shaft	R/oz	(6,988)	(6,067)
		East 3 shaft & ore purchases	R/oz	(6,970)	(6,637)
		W1 shaft	R/oz	(6,653)	(7,024)
		Generation 1	R/oz	(7,056)	(6,552)
		Total Underground excl. K4	R/oz	(7,132)	(6,771)

Operating Statistics for the 6 months to 31 March 2016 (continued)

			Units	6 months to 31 March 2016	6 months to 31 March 2015
Cost of production	Cost	Mining	Rm	(4,424)	(4,662)
(PGM operations		Concentrating	Rm	(753)	(855)
segment)		Smelting and refining	Rm	(681)	(653)
		Shared services	Rm	(384)	(468)
		Management and marketing services	Rm	(120)	(159)
			Rm	(6,362)	(6,796)
	PGM saleable ounces	Mined ounces excluding ore purchases	oz	582,085	648,818
		Metals-in-concentrate before concentrate purchases	oz	612,517	727,679
		Refined ounces	oz	667,399	501,456
		Metals-in-concentrate including concentrate purchases	oz	616,497	733,062
	Cost of production	Mining	R/oz	(7,601)	(7,186)
		Concentrating	R/oz	(1,230)	(1,175)
		Smelting and refining	R/oz	(1,020)	(1,302)
		Shared services	R/oz	(623)	(638)
		Management and marketing services	R/oz	(194)	(216)
			R/oz	(10,668)	(10,516)
	% change in cost of production	Mining	%	(5.8)%	n/a
		Concentrating	%	(4.7)%	n/a
		Smelting and refining	%	21.6%	n/a
		Shared services	%	2.3%	n/a
		Management and marketing services	%	10.3%	n/a
			%	(1.4)%	n/a

Footnotes:

1	Reporting of shafts are in line with our operating strategy for Generation 1 and Generation 2 shafts.
2	Pandora underground tonnes mined represents 100% of the total tonnes mined on the Pandora joint venture of which 42.5% for October and November 2014 and 50% thereafter is attributable to Lonmin.
3	Ounces mined have been calculated at achieved concentrator recoveries and with Lonmin standard downstream processing recoveries to present produced saleable ounces.
4	Tonnes milled exclude slag milling.
5	Lonmin purchases 100% of the ore produced by the Pandora joint venture for onward processing which is included in downstream operating statistics.
6	Head Grade is the grammes per tonne (5PGE + Au) value contained in the tonnes milled and fed into the concentrator from the mines (excludes slag milled).
7	Recovery rate in the concentrators is the total content produced divided by the total content milled (excluding slag).
8	Metals-in-concentrate have been calculated at Lonmin standard downstream processing recoveries to present produced saleable ounces.
9	Corresponds to contained base metals-in-concentrate.
10	Nickel is produced and sold as nickel sulphate crystals or solution and the volumes shown correspond to contained metal. Copper is produced as refined product but typically at LME grade C. Chrome is produced in the form of chromite concentrate and volumes shown are in the form of chromite.
11	Basket price of PGMs is based on the revenue generated in Rand and Dollar from the actual PGMs (5PGE + Au) sold in the period based on the appropriate Rand / Dollar exchange rate applicable for each sales transaction.
12	As per footnote 11 but including revenue from base metals.
13	Capital expenditure is the aggregate of the purchase of property, plant and equipment and intangible assets (includes capital accruals and excludes capitalised interest).
14	Exchange rates are calculated using the market average daily closing rate over the course of the period.
15	Comprises of Smelting and Refining costs as well as direct Process Operations shared costs and group security costs.
16	It should be noted that with the implementation of the revised operating mode, cost allocation between business units has been changed and, therefore, whilst the total is on
	a like-for-like basis, individual line items are not totally comparable.

RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE INTERIM FINANCIAL REPORT

We confirm that to the best of our knowledge:

· the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU, and

· the interim management report includes a fair review of the information required by:

(a) DTR4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the enterprise during that period; and any changes in the related party transactions described in the last annual report that could do so.

Brian Beamish Simon Scott

Chairman Chief Financial Officer

13 May 2016

INDEPENDENT REVIEW REPORT TO LONMIN PLC

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2016 which comprises the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity, consolidated statement of cash flows and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the Disclosure and Transparency Rules ('the DTR') of the UK's Financial Conduct Authority ('the UK FCA'). Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reportingas adopted by the EU.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Reviewof Interim Financial Information Performed by the Independent Auditor of the Entityissued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2016 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.

Adrian Wilcox

for and on behalf of KPMG LLP

Chartered Accountants

15 Canada Square

London E14 5GL

13 May 2016

Consolidated income statement

for the 6 months to 31 March 2016

		6 months to 31 March 2016	Special items	6 months to 31 March 2016	6 months to 31 March 2015	Special items	6 months to 31 March 2015	Year ended 30 September 2015	Special items	Year ended 30 September 2015
		Underlying	(note 3)	Total	Underlying	(note 3)	Total	Underlying	(note 3)	Total
	Notes	$m	$m	$m	$m	$m	$m	$m	$m	$m
Revenue	2	515	-	515	508	-	508	1,293	-	1,293
EBITDA / (LBITDA)	2	29	7	36	8	(14)	(6)	21	(73)	(52)
Depreciation, amortisation and impairment		(51)	-	(51)	(78)	-	(78)	(155)	(1,811)	(1,966)
Operating loss	2	(22)	7	(15)	(70)	(14)	(84)	(134)	(1,884)	(2,018)
Finance income	4	14	19	33	7	9	16	16	20	36
Finance expenses	4	(16)	(21)	(37)	(12)	(36)	(48)	(20)	(255)	(275)
Share of loss of equity accounted investments		(2)	-	(2)	(2)	-	(2)	(5)	-	(5)
Loss before taxation		(26)	5	(21)	(77)	(41)	(118)	(143)	(2,119)	(2,262)
Income tax credit	5	15	-	15	9	24	33	35	328	363
Loss for the period		(11)	5	(6)	(68)	(17)	(85)	(108)	(1,791)	(1,899)
Attributable to:
- Equity shareholders of Lonmin Plc		(7)	3	(4)	(61)	(18)	(79)	(94)	(1,567)	(1,661)
- Non-controlling interests		(4)	2	(2)	(7)	1	(6)	(14)	(224)	(238)
Loss per share	6			(1.8)c			(164.6)c			(3,439.9)c
Diluted loss per share	6			(1.8)c			(164.6)c			(3,439.9)c

Footnotes:

i	Underlying results are based on reported results excluding the effect of special items as defined in note 3.
ii	EBITDA / (LBITDA) is operating (loss) / profit before depreciation, amortisation and impairment of goodwill, intangibles and property, plant and equipment.
iii	Operating (loss) / profit is defined as revenue less operating expenses before impairment of available for sale financial assets, finance income and expenses and share of loss of equity accounted investments.
iv	The income tax credit substantially relates to overseas taxation and includes exchange gains of $5 million (6 months to 31 March 2015 - exchange gains of $21 million and year ended 30 September 2015 - exchange gains of $48 million) as disclosed in note 5.
v	Diluted (loss) / earnings per share is based on the weighted average number of ordinary shares in issue adjusted by dilutive outstanding share options.

Consolidated statement of comprehensive loss

for the 6 months to 31 March 2016

		6 months to 31 March 2016	6 months to 31 March 2015	Year ended 30 September 2015
	Note	$m	$m	$m
Loss for the period		(6)	(85)	(1,899)
Items that may be reclassified subsequently to the income statement
- Changes in fair value of available for sale financial assets	8	(1)	(1)	(4)
- Foreign exchange loss on retranslation of equity accounted investments		(1)	(4)	(8)
Total other comprehensive expenses for the period		(2)	(5)	(12)
Total comprehensive loss for the period		(8)	(90)	(1,911)
Attributable to:
- Equity shareholders of Lonmin Plc		(6)	(84)	(1,672)
- Non-controlling interests		(2)	(6)	(239)
		(8)	(90)	(1,911)

Consolidated statement of financial position

as at 31 March 2016

		As at 31 March 2016	As at 31 March 2015	As at 30 September 2015
	Notes	$m	$m	$m
Non-current assets
Goodwill		-	40	-
Intangible assets		94	455	94
Property, plant and equipment		1,455	2,874	1,477
Equity accounted investments		25	28	26
Royalty prepayment		38	39	38
Other financial assets	8	18	25	19
Deferred tax assets		8	-	-
		1,638	3,461	1,654
Current assets
Inventories		243	496	281
Trade and other receivables		85	75	71
Tax recoverable		-	2	1
Other financial assets	8	95	310	102
Cash and cash equivalents	9	264	60	320
		687	943	775
Current liabilities
Trade and other payables		(143)	(215)	(208)
Provisions		-	-	(39)
Interest bearing loans and borrowings	9	-	(80)	(505)
Deferred revenue		(14)	(26)	(23)
Tax payable		(1)	-	-
		(158)	(321)	(775)
Net current assets		529	622	-
Non-current liabilities
Interest bearing loans and borrowings	9	(150)	(262)	-
Deferred tax liabilities		-	(342)	(9)
Deferred royalty payment		(3)	(4)	(3)
Deferred revenue		-	(14)	-
Provisions		(119)	(131)	(122)
		(272)	(753)	(134)
Net assets		1,895	3,330	1,520
Capital and reserves
Share capital		586	583	586
Share premium		1,816	1,448	1,448
Other reserves		88	88	88
(Accumulated loss) / retained earnings		(484)	1,087	(493)
Attributable to equity shareholders of Lonmin Plc		2,006	3,206	1,629
Attributable to non-controlling interests		(111)	124	(109)
Total equity		1,895	3,330	1,520

Consolidated statement of changes in equity

for the 6 months to 31 March 2016

	Equity shareholders' funds
	Called up share capital $m	Share premium account $m	Other reserves $m	Retained earnings/ (Accumu-lated loss) $m	Total $m	Non- controlling interests $m	Total equity $m
At 1 October 2014	570	1,411	88	1,164	3,233	149	3,382
Loss for the period	-	-	-	(79)	(79)	(6)	(85)
Total other comprehensive expense:	-	-	-	(5)	(5)	-	(5)
- Change in fair value of available for sale financial assets	-	-	-	(1)	(1)	-	(1)
- Foreign exchange loss on retranslation of equity accounted investments	-	-	-	(4)	(4)	-	(4)
Transactions with owners, recognised directly in equity:	13	37	-	7	57	(19)	38
- Share-based payments	-	-	-	7	7	-	7
- Share capital and share premium recognised on the BEE transactions	13	37	-	-	50	-	50
- Dividends	-	-	-	-	-	(19)	(19)
At 31 March 2015	583	1,448	88	1,087	3,206	124	3,330
At 1 April 2015	583	1,448	88	1,087	3,206	124	3,330
Loss for the year	-	-	-	(1,582)	(1,582)	(232)	(1,814)
Total other comprehensive expense:	-	-	-	(6)	(6)	(1)	(7)
- Change in fair value of available for sale financial assets	-	-	-	(3)	(3)	-	(3)
- Foreign exchange loss on retranslation of equity accounted investments	-	-	-	(3)	(3)	(1)	(4)
Transactions with owners, recognised directly in equity:	3	-	-	8	11	-	11
- Share-based payments	-	-	-	8	8	-	8
- Shares issued on exercise of share options	3	-	-	-	3	-	3
At 30 September 2015	586	1,448	88	(493)	1,629	(109)	1,520

Consolidated statement of changes in equity (continued)

for the 6 months to 31 March 2016

	Equity shareholders' funds
	Called up share capital $m	Share premium account $m	Other reserves $m	Accumu-lated loss $m	Total $m	Non- controlling interests $m	Total equity $m
At 1 October 2015	586	1,448	88	(493)	1,629	(109)	1,520
Loss for the period	-	-	-	(4)	(4)	(2)	(6)
Total other comprehensive expense:	-	-	-	(2)	(2)	-	(2)
- Change in fair value of available for sale financial assets	-	-	-	(1)	(1)	-	(1)
- Foreign exchange loss on retranslation of equity accounted investments	-	-	-	(1)	(1)	-	(1)
Transactions with owners, recognised directly in equity:	-	368	-	15	383	-	383
- Share-based payments	-	-	-	15	15	-	15
- Share capital and share premium recognised on equity issuance	-	395	-	-	395	-	395
- Equity issue costs charged to share premium	-	(27)	-	-	(27)	-	(27)
At 31 March 2016	586	1,816	88	(484)	2,006	(111)	1,895

Footnotes:

i	Other reserves at 31 March 2016 represent the capital redemption reserve of $88 million (31 March 2015 and 30 September 2015 - $88 million).
ii	(Accumulated loss) / retained earnings include $1 million of accumulated debits in respect of fair value movements on available for sale financial assets (31 March 2015 - $3 million credits and 30 September 2015 - $nil) and a $18 million debit of accumulated exchange on retranslation of equity accounted investments (31 March 2015 - $13 million and 30 September 2015 - $17 million).
iii	Non-controlling interests represent a 13.76% effective shareholding in Eastern Platinum Limited, Western Platinum Limited and Messina Limited and a 19.87% effective shareholding in Akanani Mining (Proprietary) Limited.
iv	Refer to note 10 for more detail regarding the Rights Issue.

Consolidated statement of cash flows

for the 6 months to 31 March 2016

		6 months to 31 March 2016	6 months to 31 March 2015	Year ended 30 September 2015
	Notes	$m	$m	$m
Loss for the period		(6)	(85)	(1,899)
Taxation		(15)	(33)	(363)
Share of loss of equity accounted investments		2	2	5
Finance income	4	(33)	(16)	(36)
Finance expenses	4	37	48	275
Non-cash movement on deferred revenue		(9)	(10)	(27)
Depreciation, amortisation and impairment		51	78	1,966
Change in inventories		38	(124)	92
Change in trade and other receivables		(11)	1	6
Change in trade and other payables		(65)	(31)	(38)
Change in provisions		(47)	(15)	3
Share-based payments		15	7	15
Loss on disposal of property, plant and equipment		-	3	3
BEE charge		-	13	13
Cash (outflow) / inflow from operations		(43)	(162)	15
Interest received		5	3	3
Interest and bank fees paid		(16)	(11)	(27)
Tax paid		-	-	(3)
Cash outflow from operating activities		(54)	(170)	(12)
Cash flow from investing activities
Contribution to joint venture		(2)	(2)	(7)
Purchase of property, plant and equipment		(27)	(64)	(134)
Purchase of intangible assets		-	(1)	(2)
Cash used in investing activities		(29)	(67)	(143)
Cash flow from financing activities
Dividends paid to non-controlling interests		-	(19)	(19)
Proceeds from current borrowings	9	-	-	391
Repayment of current borrowings	9	(505)	-	(60)
Proceeds from non-current borrowings	9	150	180	-
Proceeds from equity issuance		395	-	-
Costs of issuing shares		(27)	-	-
Gains on retranslation and forward exchange contracts on equity issuance		5	-	-
Issue of other ordinary share capital		-	-	3
Cash inflow from financing activities		18	161	315
(Decrease) / increase in cash and cash equivalents	9	(65)	(76)	160
Opening cash and cash equivalents	9	320	143	143
Effect of exchange rate changes	9	9	(7)	17
Closing cash and cash equivalents	9	264	60	320

Notes to the accounts

1 Statement on accounting policies

Basis of preparation

Lonmin Plc (the Company) is a Company domiciled in the United Kingdom. The condensed consolidated interim financial statements of the Company as at and for the six months to 31 March 2016 comprise the Company and its subsidiaries (together referred to as the Group) and the Group's interests in equity accounted investments.

These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 - Interim Financial Reporting, as adopted by the EU. The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRSs), as adopted by the EU. As required by the Disclosure and Transparency Rules of the Financial Conduct Authority, the condensed set of financial statements have been prepared applying the accounting policies and presentation that were applied in the preparation of the Company's published consolidated financial statements for the year ended 30 September 2015, except as noted below. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 September 2015.

The comparative figures for the financial year ended 30 September 2015 are not the Group's full statutory accounts for that financial year. Those accounts have been reported on by the Group's auditors and delivered to the registrar of companies. The report of the auditors was (i) unqualified, (ii) included a reference to a matter to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The consolidated financial statements of the Group as at and for the year ended 30 September 2015 are available upon request from the Company's registered office at 4 Grosvenor Place, London, SW1X 7YL.

These condensed consolidated interim financial statements were approved by the Board of Directors on 13 May 2016.

These condensed consolidated interim financial statements apply the accounting policies and presentation that will be applied in the preparation of the Group's published consolidated financial statements for the year ending 30 September 2016.

Going concern

In determining the appropriate basis of preparation of the financial statements, the Directors are required to consider whether the Group can continue in operational existence for the foreseeable future.

The financial performance of the Group is dependent upon the wider economic environment in which the Group operates. Factors exist which are outside the control of management which can have a significant impact on the business, specifically, volatility in the Rand / US Dollar exchange rate and PGM commodity prices. The subdued PGM pricing environment has had an adverse impact on the Group's profitability. The Board and executive management have a Business Plan in place structured to enable the Group to be able to deal effectively with the effects of a continuation of the current low PGM price environment. Key elements of the Business Plan are the reduction of fixed cost expenses, removal of high cost production and the minimising of capital expenditure while preserving the ability of the business to increase production when PGM markets improve.

The Group strengthened its balance sheet during the period through a revised capital structure achieved by a successful Rights Issue in December 2015 and amendment and extension of bank debt facilities (refer to notes 9 and 10). This platform has allowed the Group to implement the Business Plan.

The Directors have prepared cash flow and covenant forecasts for a period in excess of twelve months and have concluded that the capital structure, after the successful Rights Issue and amendment of debt facilities, provides sufficient head room to cushion against controllable downside operational risks and minimises the risk of breaching new covenants.

As a result, the Directors believe that the Group will continue to meet its obligations as they fall due and comply with its financial covenants and accordingly have formed a judgement that it is appropriate to prepare the financial statements on a going concern basis. Therefore, these financial statements do not include any adjustments that would result if the going concern basis on preparation is inappropriate.

New standards and amendments in the period

The following IFRS's have been adopted in these condensed consolidated financial statements. The application of these IFRS's have not had any material impact on the amounts reported for the current and prior periods.

- Annual Improvements to IFRSs 2010-2012 cycle and 2011-2013 cycle - amendments to IFRS 1, 2, 3, 8 and 13 and IAS 16, 24, 38 and 40.

There were no other new standards, interpretations or amendments to standards issued and effective for the period which materially impacted the Group.

New standards that are relevant to the Group but not yet effective

There are no new standards, interpretations or amendments to standards issued, but not yet effective for the period, which are expected to materially impact the Group's financial statements.

2 Segmental analysis

The Group distinguishes between three reportable operating segments being the Platinum Group Metals (PGM) Operations segment, the Evaluation segment and the Exploration segment.

The PGM Operations segment comprises the activities involved in the mining and processing of PGMs, together with associated base metals, which are carried out entirely in South Africa. These operations are integrated and designed to support the process for extracting and refining PGMs from underground. PGMs move through each stage of the process and undergo successive levels of refinement which result in fully refined metals. The Chief Executive Officer, who performs the role of Chief Operating Decision Maker (CODM), views the PGM Operations segment as a single whole for the purposes of financial performance monitoring and assessment and does not make resource allocations based on margin, costs or cash flows incurred at each separate stage of the process. In addition, the CODM makes his decisions for running the business on a day to day basis using the physical operating statistics generated by the business as these summarise the operating performance of the entire segment.

The Evaluation segment covers the evaluation through pre-feasibility of the economic viability of newly discovered PGM deposits. Currently all of the evaluation projects are based in South Africa.

The Exploration segment covers the activities involved in the discovery or identification of new PGM deposits. This activity occurs on a worldwide basis.

No operating segments have been aggregated. Operating segments have consistently adopted the consolidated basis of accounting and there are no differences in measurement applied. The Other segment covers mainly the results and investment activities of the corporate Head Office. The only intersegment transactions involve the provision of funding between segments and any associated interest.

	6 months to 31 March 2016
	PGM Operations Segment $m	Evaluation Segment $m	Exploration Segment $m	Other $m	Intersegment Adjustments $m		Total $m
Revenue (external sales by product):
Platinum	327	-	-	-	-		327
palladium	90	-	-	-	-		90
Rhodium	42	-	-	-	-		42
Gold	15	-	-	-	-		15
Ruthenium	3	-	-	-	-		3
Iridium	11	-	-	-	-		11
PGMs	488	-	-	-	-		488
Nickel	12	-	-	-	-		12
Copper	5	-	-	-	-		5
Chrome	10	-	-	-	-		10
	515	-	-	-	-		515
Underlying :
EBITDA / (LBITDA)	36	2	(3)	(6)	-		29
Depreciation, amortisation and impairment	(51)	-	-	-	-		(51)
Operating (loss) / profit	(15)	2	(3)	(6)	-		(22)
Finance income	15	-	-	28	(29)		14
Finance expenses	(37)	-	-	(8)	29		(16)
Share of loss of equity accounted investments	(2)	-	-	-	-		(2)
(Loss) / profit before taxation	(39)	2	(3)	14	-		(26)
Income tax credit	15	-	-	-	-		15
Underlying (loss) / profit after taxation	(24)	2	(3)	14	-		(11)
Special items (note 3)	17	-	-	(12)	-		5
(Loss) / profit after taxation	(7)	2	(3)	2	-		(6)
Total assets	2,210	6	3	1,800		(1,694)		2,325
Total liabilities	(1,755)	(131)	(59)	(179)		1,694		(430)
Net assets / (liabilities)	455	(125)	(56)	1,621		-		1,895
Share of net assets of equity accounted investments	25	-	-	-	-		25
Additions to property, plant, equipment and intangibles	(27)	-	-	-	-		(27)
Material non-cash items - share-based payments	14	-	-	1	-		15

	6 months to 31 March 2015
	PGM Operations Segment $m	Evaluation Segment $m	Exploration Segment $m	Other $m	Intersegment Adjustments $m		Total $m
Revenue (external sales by product):
Platinum	316	-	-	-	-		316
palladium	97	-	-	-	-		97
Rhodium	37	-	-	-	-		37
Gold	11	-	-	-	-		11
Ruthenium	4	-	-	-	-		4
Iridium	7	-	-	-	-		7
PGMs	472	-	-	-	-		472
Nickel	18	-	-	-	-		18
Copper	5	-	-	-	-		5
Chrome	13	-	-	-	-		13
	508	-	-	-	-		508
Underlying :
EBITDA / (LBITDA)	16	3	(3)	(8)	-		8
Depreciation, amortisation and impairment	(78)	-	-	-	-		(78)
Operating (loss) / profit	(62)	3	(3)	(8)	-		(70)
Finance income	6	-	-	10	(9)		7
Finance expenses	(15)	-	-	(6)	9		(12)
Share of loss of equity accounted investments	(2)	-	-	-	-		(2)
(Loss) / profit before taxation	(73)	3	(3)	(4)	-		(77)
Income tax credit	9	-	-	-	-		9
Underlying (loss) / profit after taxation	(64)	3	(3)	(4)	-		(68)
Special items (note 3)	11	-	-	(28)	-		(17)
(Loss) / profit after taxation	(53)	3	(3)	(32)	-		(85)
Total assets	3,864	275	2	1,656		(1,393)		4,404
Total liabilities	(2,029)	(183)	(52)	(203)		1,393		(1,074)
Net assets / (liabilities)	1,835	92	(50)	1,453		-		3,330
Share of net assets of equity accounted investments	28	-	-	-	-		28
Additions to property, plant, equipment and intangibles	71	-	-	-	-		71
Material non-cash items - share-based payments	7	-	-	-	-		7

	Year ended 30 September 2015
	PGM Operations Segment $m	Evaluation Segment $m	Exploration Segment $m	Other $m	Intersegment Adjustments $m	Total $m
Revenue (external sales by product):
Platinum	823	-	-	-	-	823
palladium	250	-	-	-	-	250
Rhodium	92	-	-	-	-	92
Gold	29	-	-	-	-	29
Ruthenium	8	-	-	-	-	8
Iridium	16	-	-	-	-	16
PGMs	1,218	-	-	-	-	1,218
Nickel	39	-	-	-	-	39
Copper	12	-	-	-	-	12
Chrome	24	-	-	-	-	24
	1,293	-	-	-	-	1,293
Underlying :
EBITDA / (LBITDA)	40	7	(5)	(21)	-	21
Depreciation, amortisation and impairment	(155)	-	-	-	-	(155)
Operating (loss) / profit	(115)	7	(5)	(21)	-	(134)
Finance income	17	-	-	13	(14)	16
Finance expenses	(48)	-	-	14	14	(20)
Share of loss of equity accounted investments	(5)	-	-	-	-	(5)
(Loss) / profit before taxation	(151)	7	(5)	6	-	(143)
Income tax credit	34	-	-	1	-	35
Underlying (loss) / profit after taxation	(117)	7	(5)	7	-	(108)
Special items (note 3)	(1,380)	(173)	-	(238)	-	(1,791)
Loss after taxation	(1,497)	(166)	(5)	(231)	-	(1,899)
Total assets	2,117	60	3	1,724	(1,475)	2,429
Total liabilities	(1,800)	(134)	(56)	(394)	1,475	(909)
Net assets / (liabilities)	317	(74)	(53)	1,330	-	1,520
Share of net assets of equity accounted investments	26	-	-	-	-	26
Additions to property, plant, equipment and intangibles	159	2	-	-	-	161
Material non-cash items - share-based payments	14	-	-	1	-	15

Revenue by destination is analysed by geographical area below:

	6 months to 31 March 2016 $m	6 months to 31 March 2015 $m	Year ended 30 September 2015 $m
The Americas	61	128	260
Asia	106	109	240
Europe	236	166	559
South Africa	112	105	234
	515	508	1,293

The Group's revenues are all derived from the PGM Operations segment. This segment has two major customers who contributed 43% ($221 million) and 18% ($94 million) of revenue in the six months to 31 March 2016, 55% ($279 million) and 21% ($107 million) in the six months to 31 March 2015 and 58% ($505 million) and 16% ($204 million) in the year ended 30 September 2015.

Metal sales prices are based on market prices which are denominated in US Dollars. The majority of sales are also invoiced in US Dollars with the exception of certain sales in South Africa which are invoiced in South African Rand based on exchange rates determined in accordance with the contractual arrangement.

Non-current assets (excluding financial instruments and deferred tax assets) of $1,612 million (31 March 2015 - $3,436 million and 30 September 2015 - $1,635 million) are all situated in South Africa.

Footnotes:

i	Underlying results are based on reported results excluding the effect of special items as defined in note 3.
ii	EBITDA / (LBITDA) and operating (loss) / profit are the key profit measures used by management.
iii	Debt refinancing costs of $10 million and net finance expenses of $2 million (including gains of $5 million on retranslation and forward exchange contracts relating to the Rights Issue) are included as special items under the 'Other' segment. The remaining special items per note 3 form part of the PGM Operations segment.
iv	The assets under the 'Other' segment include the HDSA receivable of $95 million (31 March 2015 - $310 million, 30 September 2015 - $102 million) and intercompany receivables of $1,694 million (31 March 2015 - $1,323 million, 30 September 2015 - $1,475 million). Available for sale financial assets of $6 million (31 March 2015 - $10 million, 30 September 2015 - $7 million) form part of the 'Other' segment and the balance of $4 million (31 March 2015 - $4 million, 30 September 2015 - $4 million) forms part of the PGM Operations segment.

3 Special items

'Special items' are those items of financial performance that the Group believes should be separately disclosed on the face of the income statement to assist in the understanding of the financial performance achieved by the Group and for consistency with prior periods.

	6 months to 31 March 2016	6 months to 31 March 2015	Year ended 30 September 2015
	$m	$m	$m
Operating profit / (loss):	7	(14)	(1,884)
- BEE transaction
BEE charge	-	(13)	(13)
Consulting fees	-	(2)	(1)
- Restructuring and reorganisation costs	22	-	(59)
- Debt refinancing costs	(10)	-	-
- Share-based payments	(5)	-	-
- Impairment of non-financial assets
Impairment of goodwill	-	-	(40)
Impairment of intangibles	-	-	(358)
Impairment of property, plant and equipment	-	-	(1,413)
- Other	-	1	-
Net finance expenses:	(2)	(27)	(235)
- Interest accrued from HDSA receivable	14	9	20
- Foreign exchange loss on HDSA receivable	(21)	(36)	(28)
- Impairment of HDSA receivable	-	-	(227)
- Gain on retranslation and forward exchange contracts in respect of the Rights Issue (note 10)	5	-	-
Profit / (loss) on special items before taxation	5	(41)	(2,119)
Taxation related to special items (note 5)	-	24	328
Special profit / (loss) before non-controlling interests	5	(17)	(1,791)
Non-controlling interests	(2)	(1)	224
Special profit / (loss) for the period attributable to equity shareholders of Lonmin Plc	3	(18)	(1,567)

Footnotes:

i	The planned restructuring of the business was achieved at a lower cost due to the reskilling and redeployment of employees combined with a greater proportion of contractors departing as well as natural attrition. This resulted in the reversal of the remainder of the provision for redundancy costs.
ii	Costs were incurred to amend the debt facilities with the banks. Refer to note 9 for detail on the amended facilities.
iii	The employee share option schemes were revised as a result of the Rights Issue. This resulted in the accelerated vesting of the share-based payment expenses per IFRS 2. These accelerated share-based payment costs were treated as special costs.
iv	During the year ended 30 September 2010 the Group provided financing to assist Lexshell 806 Investments (Proprietary) Limited, a subsidiary of Pembani Group (Proprietary) Limited (Pembani), to acquire a majority shareholding in Incwala, Lonmin's Black Economic Empowerment partner. This financing gave rise to foreign exchange movements and the accrual of interest. Refer to note 8 for details regarding the HDSA receivable.

4 Net finance expenses

	6 months to 31 March 2016	6 months to 31 March 2015	Year ended 30 September 2015
	$m	$m	$m
Finance income:	14	7	16
- Interest receivable on cash and cash equivalents	4	2	3
- Dividend received from investment	1	1	1
- Foreign exchange gains on net cash / (debt)	9	4	12
Finance expenses:	(16)	(12)	(20)
- Interest payable on bank loans and overdrafts	(10)	(9)	(20)
- Bank fees	(2)	(4)	(8)
- Unamortised bank fees realised on settlement of old loan facility	(1)	-	-
- Capitalised interest	1	6	19
- Other finance expenses	-	-	(1)
- Unwind of discounting on provisions	(4)	(5)	(10)
Special items (note 3):	(2)	(27)	(235)
- Interest on HDSA receivable	14	9	20
- Foreign exchange loss on HDSA receivable	(21)	(36)	(28)
- Impairment of HDSA receivable	-	-	(227)
- Gain on retranslation and forward exchange contracts in respect of the Rights Issue (note 10)	5	-	-
Net finance expenses	(4)	(32)	(239)

Footnotes:

i	Dividends received relate to dividends accruing from our investment in Petrozim Line (Private) Limited which were remitted during the year. The investment in Petrozim Line (Private) Limited has a $nil carrying value as it has been fully impaired.
ii	Net cash / (debt) as defined by the Group comprises cash and cash equivalents, bank overdrafts repayable on demand and interest bearing loans and borrowings less unamortised bank fees, unless the unamortised bank fees relate to undrawn facilities in which case they are treated as other receivables.
iii	Interest expenses incurred have been capitalised on a Group basis to the extent that there is an appropriate qualifying asset. The weighted average interest rate used by the Group for capitalisation in the period was 1.9% (6 months to 31 March 2015 - 3.8%, year ended 30 September 2015 - 3.8%).

5 Taxation

	6 months to 31 March 2016 $m	6 months to 31 March 2015 $m	Year ended 30 September 2015 $m
Current tax charge (excluding special items):
United Kingdom tax expense
- Current tax expense at 21% (March 2015 - 21%, September 2015 - 20.5%)	-	-	-
Overseas current tax expense at 28% (2015 - 28%)	4	-	4
- Corporate tax expense - current year	4	-	4
Deferred tax credit (excluding special items):
Deferred tax credit - UK and overseas	(19)	(9)	(39)
- Origination and reversal of temporary differences	(19)	(9)	(39)
Deferred tax credit on special items - UK and overseas (note 3):	-	(24)	(328)
- Exchange on deferred taxation	(5)	(21)	(48)
- Tax on special items impacting profit before tax	5	(3)	(280)
Actual tax credit	(15)	(33)	(363)
Tax credit excluding special items (note 3)	(15)	(9)	(35)
Effective tax rate	71%	(28%)	16%
Effective tax rate excluding special items (note 3)	58%	(12%)	24%

A reconciliation of the standard tax credit to the actual tax credit was as follows:

	6 months to 31 March 2016	6 months to 31 March 2016	6 months to 31 March 2015	6 months to 31 March 2015	Year ended 30 September 2015	Year ended 30 September 2015
	%	$m	%	$m	%	$m
Tax credit on loss at standard tax rate	28	(6)	28	(33)	28	(626)
Tax effect of:
- Unutilised losses	5	(1)	(14)	17	(1)	27
- Foreign exchange impacts on taxable profits	(24)	5	16	(19)	2	(37)
- Disallowed expenditure	43	(9)	(18)	21	(15)	316
- Expenses not subject to tax	(5)	1	(2)	2	-	5
- Foreign exchange revaluation on deferred tax	24	(5)	18	(21)	2	(48)
Actual tax credit	71	(15)	28	(33)	16	(363)

The Group's primary operations are based in South Africa. The South African statutory tax rate is 28% (2015 - 28%). Lonmin Plc operates a branch in South Africa which is subject to a tax rate of 28% on branch profits (2015 - 28%). The aggregated standard tax rate for the Group is 28% (2015 - 28%). The dividend withholding tax rate is 15% (2015 - 15%). Dividends payable by the South African companies to Lonmin Plc are subject to a 5% withholding tax benefitting from double taxation agreements.

Footnotes:

i	Effective from 1 April 2017 the United Kingdom tax rate will change from 20% to 19% and from 19% to 18% from 1 April 2020. This does not materially impact the Group's recognised deferred tax liabilities.
ii	Overseas tax charges are predominantly calculated in Rand as required by the local authorities. As these subsidiaries' functional currency is US Dollar this leads to a variety of foreign exchange impacts being the retranslation of current and deferred tax balances and monetary assets, as well as other translation differences. The Rand denominated deferred tax balance in US Dollars at 31 March 2016 is $39 million (31 March 2015 - $250 million, 30 September 2015 - $177 million).
iii	Unutilised losses reflect losses generated in entities for which no deferred tax asset is provided as it is not thought probable that future profits can be generated against which a deferred tax asset could be offset or previously unrecognised losses utilised.

6 Loss per share

Loss per share (LPS) has been calculated on the loss for the period attributable to equity shareholders amounting to $4 million (6 months to 31 March 2015 - loss of $79 million, year ended 30 September 2015 - loss of $1,661million) using a weighted average number of 217.2 million ordinary shares in issue for the 6 months to 31 March 2016 (6 months to 31 March 2015 - 48 million ordinary shares, year ended 30 September 2015 - 48.3 million ordinary shares).

During November 2015 the Group undertook a capital raising by way of a Rights Issue. As a result the LPS figures have been adjusted retrospectively as required by IAS 33 - Earnings Per Share. On 20 November 2015, 26,997,717,400 ordinary shares were issued with 46 new ordinary shares issued for every existing ordinary share held. For the calculation of the LPS, the number of shares held prior to 20 November 2015 has been adjusted by a factor of 0.08 to reflect the bonus element of the Rights Issue.

Diluted loss per share is based on the weighted average number of ordinary shares in issue adjusted by dilutive outstanding share options in accordance with IAS 33 - Earnings Per Share. In the 6 months to 31 March 2016 outstanding share options were anti-dilutive and so were excluded from diluted loss per share in accordance with IAS 33 - Earnings Per Share.

	6 months to 31 March 2016			6 months to 31 March 2015 (restated)			Year ended 30 September 2015 (restated)
	Loss for the period	Number of shares	Per share amount	Loss for the period	Number of shares	Per share amount	Loss for the year	Number of shares	Per share amount
	$m	millions	cents	$m	millions	cents	$m	millions	cents
Basic LPS	(4)	217.2	(1.8)	(79)	48.0	(164.6)	(1,661)	48.3	(3,439.9)
Share option schemes	-	-	-	-	-	-	-	-	-
Diluted LPS	(4)	217.2	(1.8)	(79)	48.0	(164.6)	(1,661)	48.3	(3,439.9)

	6 months to 31 March 2016			6 months to 31 March 2015 (restated)			Year ended 30 September 2015 (restated)
	Loss for the period	Number of shares	Per share amount	Loss for the period	Number of shares	Per share amount	Loss for the year	Number of shares	Per share amount
	$m	millions	cents	$m	millions	cents	$m	millions	cents
Underlying LPS	(7)	217.2	(3.2)	(61)	48.0	(127.1)	(94)	48.3	(194.6)
Share option schemes	-	-	-	-	-	-	-	-	-
Diluted Underlying LPS	(7)	217.2	(3.2)	(61)	48.0	(127.1)	(94)	48.3	(194.6)

Underlying (loss) / earnings per share have been presented as the Directors consider it important to present the underlying results of the business. Underlying (loss) / earnings per share are based on the (loss) / earnings attributable to equity shareholders adjusted to exclude special items (as defined in note 3) as follows:

	6 months to 31 March 2016			6 months to 31 March 2015 (restated)			Year ended 30 September 2015 (restated)
	Loss for the period	Number of shares	Per share amount	Loss for the period	Number of shares	Per share amount	Loss for the year	Number of shares	Per share amount
	$m	millions	cents	$m	millions	cents	$m	millions	cents
Basic LPS	(4)	217.2	(1.8)	(79)	48.0	(164.6)	(1,661)	48.3	(3,439.9)
Special items (note 3)	(3)	-	(1.4)	18	-	37.5	1,567	-	3,245.3
Underlying LPS	(7)	217.2	(3.2)	(61)	48.0	(127.1)	(94)	48.3	(194.6)

Headline loss and the resultant headline loss per share are specific disclosures defined and required by the Johannesburg Stock Exchange.

These are calculated as follows:

	6 months to 31 March 2016	6 months to 31 March 2015	Year ended 30 September 2015
	$m	$m	$m
Loss attributable to ordinary shareholders (IAS 33 earnings)	(4)	(79)	(1,661)
Add back loss on disposal of property, plant and equipment	-	3	3
Add back impairment of assets (note 3)	-	-	1,811
Tax related to the above items	-	(1)	(261)
Non-controlling interests	-	-	(224)
Headline loss	(4)	(77)	(332)

	6 months to 31 March 2016			6 months to 31 March 2015 (restated)			Year ended 30 September 2015 (restated)
	Loss for the period	Number of shares	Per share amount	Loss for the period	Number of shares	Per share amount	Loss for the year	Number of shares	Per share amount
	$m	millions	cents	$m	millions	cents	$m	millions	cents
Headline LPS	(4)	217.2	(1.8)	(77)	48.0	(160.4)	(332)	48.3	(687.4)
Share option schemes	-	-	-	-	-	-	-	-	-
Diluted Headline LPS	(4)	217.2	(1.8)	(77)	48.0	(160.4)	(332)	48.3	(687.4)

7 Dividends

No dividends were declared during the period (6 months to 31 March 2015 and year ended 30 September 2015 - $nil).

No advance dividends were made by WPL, a subsidiary to Lonmin Plc, to Incwala Platinum (Proprietary) Limited (IP) during the period under review (6 months to 31 March 2015 - $19 million (R228 million) and for the year ended 30 September 2015 - $19 million (R228 million). IP is a substantial shareholder in the Company's principal operating subsidiaries. Total advance dividends made between 2009 and 2016 amount to $135 million (R1,309 million). IP has authorised WPL to recover these amounts by reducing future dividends that would otherwise be payable to all shareholders.

These advance dividends are adjusted for in the non-controlling interest of the Group.

8 Other financial assets

	Restricted cash	Available for sale	HDSA receivable	Total
	$m	$m	$m	$m
At 1 October 2015	8	11	102	121
Interest accrued	-	-	14	14
Movement in fair value	-	(1)	-	(1)
Foreign exchange differences	-	-	(21)	(21)
At 31 March 2016	8	10	95	113

	Restricted cash	Available for sale	HDSA receivable	Total
	$m	$m	$m	$m
At 1 April 2015	11	14	310	335
Interest accrued	1	-	11	12
Movement in fair value	-	(3)	-	(3)
Foreign exchange differences	(4)	-	8	4
Impairment loss	-	-	(227)	(227)
At 30 September 2015	8	11	102	121

	Restricted cash	Available for sale	HDSA receivable	Total
	$m	$m	$m	$m
At 1 October 2014	12	15	337	364
Interest accrued	-	-	9	9
Movement in fair value	-	(1)	-	(1)
Foreign exchange differences	(1)	-	(36)	(37)
At 31 March 2015	11	14	310	335

		6 months to 31 March 2016	6 months to 31 March 2015	Year ended 30 September 2015
Current assets
Other financial assets		95	310	102
Non-current assets
Other financial assets		18	25	19

Footnotes:

i	Restricted cash deposits are in respect of rehabilitation obligations.
ii	Available for sale financial assets include listed investments of $6 million (31 March 2015 - $10 million and 30 September 2015 - $7 million) held at fair value using the market price on 31 March 2016.
iii	On 8 July 2010, Lonmin entered into an agreement to provide financing of £200 million to Lexshell 806 Investments (Proprietary) Limited, a subsidiary of Pembani Group (Proprietary) Limited, to facilitate the acquisition, at fair value, of 50.3% of shares in Incwala Resources (Proprietary) Limited from the original HDSA shareholders. The terms of the financing provided by Lonmin Plc to the Pembani subsidiary include the accrual of interest on the HDSA receivable at a fixed rate based on a principal value of £200 million which is repayable on demand, including accrued interest.

The Company holds the HDSA receivable at amortised cost. The receivable is secured on shares in the HDSA borrower, Lexshell 806 Investments (Proprietary) Limited, whose only asset of value is its holding in Incwala Resources (Pty) Limited (Incwala). Incwala's principal assets are investments in Western Platinum Limited (WPL), Eastern Platinum Limited (EPL) and Akanani Mining (Pty) Limited (Akanani), all subsidiaries of Lonmin Plc. One of the sources of income to fund the settlement of the receivable is the dividend flow from these underlying investments. Given the current state of the PGM industry, there have not been any substantial dividends declared by these Lonmin subsidiaries in recent years.

An impairment assessment has been performed as at 31 March 2016. This assessment has been made based on the value of the security, which is primarily driven by the value of Incwala's underlying investments in WPL, EPL and Akanani. The same valuation models for the Marikana and Akanani CGU's that were prepared to assess impairment of non-financial assets were used as the basis for determining the value of Incwala's investments. Thus, similar judgements apply around the determination of key assumptions in those valuation models. The value of the security at 31 March 2016 was $95 million (March 2015 - $310 million, 30 September 2015 - $102 million) which was in line with the carrying amount of the HDSA receivable. Any movements in the key assumptions would affect the value of the security which would lead to further impairment or reversal of a previous impairment of the receivable as follows.

Assumption	Movement in assumption	Reversal in impairment / (further impairment) of receivable
Metal prices	+/-5%	$44m / ($15m)
ZAR:USD exchange rate	-/+5%	$37m / ($8m)
Discount rate	-/+100 basis points	$31m / $nil

9 Analysis of net cash / (debt)

	As at 1 October 2015	Cash flow	Foreign exchange and non-cash movements	Transfer of unamortised bank fees to other receivables	As at 31 March 2016
	$m	$m	$m	$m	$m
Cash and cash equivalents	320	(65)	9	-	264
Current borrowings	(506)	505	1	-	-
Non-current borrowings	-	(150)	-	-	(150)
Unamortised bank fees	1	-	-	(1)	-
Net (debt) / cash as defined by the Group	(185)	290	10	(1)	114

	As at 1 April 2015 $m	Cash flow $m	Foreign exchange and non-cash movements $m	Transfer of unamortised bank fees to other receivables $m	As at 30 September 2015 $m
Cash and cash equivalents	60	236	24	-	320
Current borrowings	(81)	(331)	(94)	-	(506)
Non-current borrowings	(263)	180	83	-	-
Unamortised bank fees	2	-	(1)	-	1
Net debt as defined by the Group	(282)	85	12	-	(185)

	As at 1 October 2014	Cash flow	Foreign exchange and non-cash movements	Transfer of unamortised bank fees to other receivables	As at 31 March 2015
	$m	$m	$m	$m	$m
Cash and cash equivalents	143	(76)	(7)	-	60
Current borrowings	(87)	-	6	-	(81)
Non-current borrowings	(88)	(180)	5	-	(263)
Unamortised bank fees	3	-	(1)	-	2
Net debt as defined by the Group	(29)	(256)	3	-	(282)

Footnotes:

i	Net cash / (debt) as defined by the Group comprises cash and cash equivalents, bank overdrafts repayable on demand and interest bearing loans and borrowings less unamortised bank fees, unless the unamortised bank fees relate to undrawn facilities in which case they are treated as other receivables.
ii	Current cash and cash equivalents to the value of $6 million will be treated as restricted cash to be utilised for rehabilitation obligations (30 March 2015 - $7 million, 30 September 2015 - $6 million). The reduction in value is due to foreign exchange movements.
ii	As at 31 March 2016 unamortised bank fees of $4 million relating to undrawn facilities were included in other receivables (31 March 2015 - $2 million and 30 September 2015 - $1 million of unamortised bank fees relating to drawn facilities were offset against net debt).
Bank debt facilities were amended effective 15 December 2015. Following the amendment, the Group's debt facilities are summarised as follows:
· Revolving credit facilities totalling $75 million and a $150 million term loan, at a Lonmin Plc Level, which mature in May 2020 (assuming Lonmin exercises its option to extend the term up until this date). · Revolving credit facility totalling R1,980 million, at a Western Platinum Limited level, which matures in May 2020 (assuming Lonmin exercises its option to extend the term up until this date).
The following financial covenants apply to these facilities:
· The consolidated tangible net worth of the Group will not be at any time less than $1,100 million.
· The consolidated debt of the Group will not at any time exceed an amount equal to 35% of consolidated tangible net worth of the Group.
· The liquidity of the Group will not, for any week from 1 January 2016, be less than $20,000,000.
· The capital expenditure of the Group (excluding any Bulk Tailings Agreement) shall not exceed the limits set out in the table below. The Company shall also have the option to carry forward or back up to 10% of the limits set out in the table below:

Financial Year	Capex Limit
1 October 2015 - 30 September 2016 (inclusive)	ZAR 1,338 million
1 October 2016 - 30 September 2017 (inclusive)	ZAR 1,242 million
1 October 2017 - 30 September 2018 (inclusive)	ZAR 2,511 million
1 October 2018 - 30 September 2019 (inclusive)	ZAR 3,194 million
1 October 2019 - 31 May 2020 (inclusive)	ZAR 4,049 million

There is also additional limit on capital expenditure in relation to any Bulk Tailings Agreement as set out below:

Financial Year	Bulk Tailings Capex Limit
1 October 2015 - 30 September 2016 (inclusive)	ZAR 370 million
1 October 2016 - 30 September 2017 (inclusive)	ZAR 182 million
The limit on capital expenditure in relation to any Bulk Tailings Agreement after 30 September 2017 will be zero.
As at 31 March 2016, Lonmin had net cash of $114 million, comprising of cash and cash equivalents of $264 million and borrowings of $150 million (31 March 2015 - net debt of $282 million and 30 September 2015 - net debt of $185 million). Undrawn facilities amounted to $210 million at 31 March 2016 (31 March 2015 - $219 million and on 30 September 2015 - $40 million undrawn facilities).

10 Rights Issue

On 9 November 2015, Lonmin announced a fully underwritten 46 for 1 Rights Issue of 26,997,717,400 new shares at £0.01 per new share for shareholders on the London Stock Exchange and at ZAR 0.214 per new share for shareholders on the Johannesburg Stock Exchange. In the prospectus, Lonmin anticipated raising $407 million of total proceeds which, net of fees and expenses relating to the Rights Issue of $26 million would raise funds of $381 million.

The offer period commenced on 20 November 2015 and closed for acceptance on 10 December 2015. The issue was successful with a take up of just below 71% and the remaining 29% raised through a rump placement. All new shares issued were paid for. The Company raised total net proceeds of $368 million which was slightly below expectations given in the prospectus as a result of exchange differences between the prospectus exchange rate and the achieved ($11 million) as well as fees and expenses being $1 million more than anticipated.

Accounting for the Rights Issue

The Rights Issue proceeds were received over the offer period and initially credited to a 'shares to be issued' account at the prevailing spot exchange rates on the dates of receipt resulting in the recognition of cash inflow of $396 million before the impact of hedging arrangements. The retranslation of these receipts at the spot rate on closing resulted in a $1 million exchange gain recognised through finance income as a special item.

Share capital and share premium of $26,998 and $395 million respectively were recognised on the statement of financial position using the spot exchange rate on the date of issuance being 10 December 2015. Share issue costs of $27 million were also recognised and charged against share premium. Therefore the total net increase in share capital and share premium was $368 million.

In order to minimise the risk of the exposure to currency fluctuations on the Rand and Pound Sterling proceeds expected, the Group entered into forward exchange contracts in synchronisation with the Rights Issue process. The Rand weakened while the Pound Sterling strengthened against the Dollar over the offer period resulting in the net proceeds received and translated at forward exchange rate being more than those accounted for at spot rate. This resulted in the recognition of exchange gains of $4 million. This $4 million forward exchange gain cannot be accounted for in equity (which it was effectively hedging for economic purposes) as, under IFRS, hedge accounting can only be applied to cash flows which ultimately affect profit and loss. The gain on forward exchange contracts has therefore been reported as a special item in finance income in the income statement.

A summary of the above transaction is shown below:

	$m
Cash proceeds received at spot rates	396
Foreign exchange gain on retranslation of advance cash proceeds	(1)
Gross increase in share capital and share premium	395
Cost of issue charged to share premium	(27)
Net increase in share capital and share premium	368
Gain on settlement of forward exchange contracts	4
Total	372

11 Impairment of non-financial assets

At each financial reporting date, the Group assesses whether there is any indication that non-financial assets are impaired. If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of the impairment (if any). Recoverable amount is the higher of fair value less costs to sell and value in use.

For impairment assessment, the Group's net assets are grouped into CGUs being the Marikana CGU, Akanani CGU, Limpopo CGU and Other. The Marikana and Limpopo CGU's relate to the PGM segment and the Akanani CGU relates to the Evaluation segment.

The Marikana CGU is located in the Marikana district to the east of the town of Rustenburg in the North West Province of South Africa. It contains a number of producing underground mines, various development properties, concentrators, tailings storage facilities and smelting and refining operations.

The Akanani CGU is an evaluation asset and is located on the Northern Limb of the Bushveld Igneous Complex in the Limpopo Province of South Africa. A pre-feasibility study was completed in 2012.

The Limpopo CGU is located on the Northern Sector of the Eastern Limb of the Bushveld Igneous Complex in the Limpopo Province of South Africa and comprises two resource blocks (Baobab and Baobab east). The CGU includes mines which were placed on care and maintenance in 2009 and a concentrator complex.

For Marikana and Akanani, the recoverable amounts were calculated using a value in use valuation. The key assumptions contained within the business forecasts and management's approach to determine appropriate values in use are set out below:

Key Assumption	Management Approach
PGM prices	Projections are determined through a combination of the views of the Directors, market estimates and forecasts and other sector information. Our long term assumptions on PGM prices have not been reviewed and are the same as those used at 30 September 2015, while the short to medium term price assumptions have been adjusted downwards in light of recent market forecasts. The position will be reviewed at 30 September 2016. The Platinum price is projected to be in the range of $921 to $1,536 per ounce in real terms over the life of the mine. palladium and Rhodium prices are expected to range between $552 and $842 and $722 and $2,244 respectively per ounce in real terms over the same period.
Production volume	Projections are based on the capacity and expected operational capabilities of the mines, the grade of the ore, and the efficiencies of processing and refining operations.
Production costs	Projections are based on current cost adjusted for expected cost changes as well as giving consideration to specific issues such as the difficulty in mining particular sections of the reef and the mining method employed.

Key Assumption	Management Approach
Capital expenditure requirements	Projections are based on the operational plan, which sets out the long-term plan of the business and is approved by the Board.
Foreign currency exchange rates	Spot rates as at the end of the reporting period are applied.
Reserves and resources of the CGU	Projections are determined through surveys performed by Competent Persons and the views of the Directors of the Company.
Discount rate	The discount rate is based on a Weighted Average Cost of Capital (WACC) calculation using the Capital Asset Pricing Model grossed up to a pre-tax rate. The Group uses external consultants to calculate an appropriate WACC.

For impairment testing management projects cash flows over the life of the relevant mining operation which is significantly greater than 5 years. For the Marikana CGU a life of mine spanning until 2058 was applied. For the Akanani CGU the life of mine spans until 2049.

The risk-adjusted pre-tax discount rate applied for impairment testing in the Marikana CGU for 31 March 2016 was 15.6% real (30 September 2015 - 15.6% real).

At 31 March 2016, the recoverable amount of the Marikana CGU was the same as its carrying value. In preparing the financial statements, management has considered whether a reasonably possible change in the key assumptions on which management has based its determination of the recoverable amount would cause the carrying amount to exceed the recoverable amount. A reasonably possible change in any of the assumptions used to value the Marikana CGU will lead to a reduction or increase in the impairment charge as follows:

Assumption	Movement in assumption	Reversal of impairment/(Further impairment)
Metal prices	+/-5%	$472m/($218m)
ZAR:USD exchange rate	-/+5%	$372m/($142m)
Discount rate	-/+100 basis points	$315m/($30m)

The Akanani asset was fully impaired at 30 September 2015. There have been no significant changes since that date to lead us to believe that the valuation of this asset is different. Therefore no full assessment has been performed at 31 March 2016 as we do not expect a reversal of impairment at this stage.

The non-financial assets of the Limpopo CGU were also fully impaired at 30 September 2015. As for Akanani, no full assessment has been performed at 31 March 2016 as we do not expect a reversal of impairment at this stage.