Lonmin PLC.

Published : May 17th, 2016

Half-year Report

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Half-year Report

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)