Final Results

REGULATORY RELEASE

11 November 2013

2013 Final Results Announcement

Lonmin Plc, ("Lonmin" or "the Company"), the world's third largest primary Platinum producer, today publishes its Final Results for the year ended 30 September 2013.

HIGHLIGHTS

• Strong performance across the Company

o Lost Time Injury Frequency Rate (LTIFR) of 3.50, a 15.9% improvement on previous year, but sadly 3 fatalities

o Production ramp up achieved well ahead of Renewal Plan

o Highest Marikana underground tonnes hoisted in 6 years (11 million)

o 751,000 Platinum ounces in concentrate achieved, highest in 6 years and an 10.5% increase on last year

o Platinum sales of 696,000 ounces, exceeding guidance of 660,000 ounces; pipeline rebuilt

o Immediately available ore reserves at 3.8 million centares, up 14.7%

o Concentrator recoveries at record level at 87.0%

• Financial results

o Rights Issue of December 2012, raised net proceeds of $767 million

o Underlying profit before tax of $158 million ($57 million in 2012)

o Net cash of $201 million (net debt of $421 million in 2012)

o Cost of production per PGM ounce increase contained to 3.8% - exceeding guidance and lower than South African inflation

o Capital expenditure of $159 million (below guidance of $175 million - in line with guidance in Rand terms)

o Underlying Earnings per Share of 20.5 cents versus 3.9 cents in prior year (restated for impact of Rights Issue)

• Guidance and focus areas FY2014 onwards

o FY2014 guidance of Platinum sales in excess of 750,000 ounces

o Unit costs to increase by less than wage inflation

o Capital expenditure of $210 million for 2014 financial year

• Driving achievements through a focus on operational excellence and value optimisation

Lonmin Chief Executive Officer Ben Magara said: "These are strong results. Despite the constraints faced at the start of the financial year our ramp up was impressive and we met production expectations with costs well under control and with many areas of the business recording their best performance in years. Our top management team has been strengthened and we have the right people in place to take Lonmin forward. Our focus for the coming year will be on driving higher performance and delivery further and harder whilst continuing with cost control and working to bring that same focus to the business critical issues of employee relationships and social responsibility."

FINANCIAL HIGHLIGHTS

Footnotes:

ENQUIRIES

Investors / Analysts:

Lonmin

Media:

Cardew Group

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 found.

The Company creates value for shareholders through mining, refining and marketing PGMs and has a vertically integrated operational structure - from mine to market. 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

CONTENTS

This document contains the following sections:

· Chief Executive Officer's Review;

· Operational Review;

· Market Review;

· Reserves & Resources;

· Financial Review;

· Responsibility Statement of the Directors';

· Operating Statistics - 5 Year Review; and

· Financial Statements

CHIEF EXECUTIVE'S REVIEW

I was appointed Chief Executive of Lonmin Plc on 1 July this year. Under the interim leadership of our Chief Financial Officer, Simon Scott, Lonmin had been strengthening its position. Set against a continuingly tough market, and given the disruptions which defined the beginning of the period, our ramp up quickly exceeded the schedule which was maintained throughout the year. We continued to outperform and achieved 751,000 Platinum metal in concentrate ounces, and sales of 696,000 Platinum ounces by the end of the year.

Whilst proud of our operational achievements we regard our solid performance in 2013 as the foundation to build on. Our sustained hard work to improve relationships with our employees is yielding results, not least around labour relations, but I want to see a step change.

Our safety performance improved and I believe that our "zero harm" aspiration is achievable, that all injuries and fatalities are preventable and that this remains our goal.

We remember with great sadness the loss of our colleagues Elson Ngomane, Gil Macamo and Ayanda Dziliyana during 2013. Their deaths remind us of both the intrinsic dangers of mining and that we must redouble our efforts in this area.

My priority on joining the business was to meet as many employees and stakeholders as possible to begin the task of winning back hearts and minds in the wake of last year's events at Marikana.

To this end I visited our shafts, plants and the communities around them and went to the areas of South Africa from which most of our employees come. I also visited the families of those who lost their lives during the terrible Events at Marikana last year. All these groups of people expressed to me the shared wish of wanting Lonmin to succeed. This is important and encouraging, given that we regard the support of all our stakeholders as crucial in stripping uncertainty from our business and driving higher performance.

Whilst our hard work has begun to rebuild trust, demonstrated by the fact that we were able to sign a union recognition agreement and attend the Marikana commemoration, we still have much more to do in this regard.

Our stakeholder relationships are business critical. I reject any contention that these are "soft" issues, set against the "hard" issues of operations and finances.

My second step was to make a number of changes and additions to Lonmin's top executive team. We now have the team in place to focus our resources more strategically and achieve a steady improvement in value for our shareholders.

The Executive team is comprised of the following:

· Simon Scott -Chief Financial Officer

· Albert Jamieson - Chief Commercial Officer (to 31 December 2013)

· Abey Kgotle - Executive Vice President Human Resources

· Barnard Mokwena - Executive Vice President Transformation

· Lerato Molebatsi - Executive Vice President Communications and Public Affairs

· Mark Munroe - Executive Vice President Mining and Group Safety

· Thandeka Ncube - Shanduka Resources - Business Transformation Manager

· Natascha Viljoen- Executive Vice President Processing and Sustainability

Looking ahead, I have set out four management pillars for the future which will drive delivery of value to all of our shareholders and stakeholders. Overall they represent evolutionary improvements in those things we do well, and demand more rapid changes in areas where we have been slower to perform. These can be summarised as: continuing to reclaim our role as managers in our relationships with employees and stakeholders; operational credibility and excellence; management of value optimisation; and finally sustainability and social agenda. I will deal with each of these in turn.

Lonmin's relationships with its employees and stakeholders

As a labour-intensive industry our people are key to our success. In narrow tabular mining, where mechanisation will always be limited, people make the difference and should be a source of competitive advantage. This is absolutely not a "soft" issue. This year has seen significant and very welcome interventions from the South African Government in the context of employment and industrial relations. Lonmin's greater collaboration with Government and with our colleagues in the South African mining sector will enable steady progress to be made in establishing a renewed stability. Our challenge is to build on this positive start to create a long-term environment where performance increases through a more content and dedicated workforce, removing uncertainty from the business, and in which our success benefits our shareholders and all our stakeholders. This is fundamentally about rebuilding trust.

Operational credibility and excellence

We continue to be cautious about the near and medium-term markets for PGMs. It is vital, then, that we exploit our assets as safely and efficiently as possible. It is absolutely necessary that we only mine profitably and that we maintain a rigorous control over costs. I believe that such discipline is the only way in which to ensure that our shareholders benefit from the eventual improvement in the market when it comes; about which we remain confident. The Lonmin Renewal Plan, which was in operation when I arrived, has proved a success. It enabled us to hit targets and achieve ramp up ahead of expectations. In order to plan more effectively for Lonmin's future, we must now look strategically and holistically at all our assets and properties and prioritise investment to protect and enhance value accordingly. We will focus on fewer projects at a time. My initial review of our operations led us to decide that continuing to invest in our Saffy shaft is the best use of capital at this stage, optimising efficiencies and enabling growth at the right time. The majority of the investment in Saffy has already been made.

Value optimisation management (VOMA)

It is essential that our drive to work efficiently, profitably and strategically is underpinned by a coherent strategy. In the near-term we must: guarantee a return on the recent and historical investment at Marikana; maximise cash flow in order to self fund capital expenditure; improve profitability by margin focused mining and increased productivity; and continue to improve cost management. In the medium-term we must also ensure our mining plans and processing capacity are flexible enough to respond to an improving market and continue to work to identify value enhancing opportunities.

We will continue to assess the choices available to us, but already we see an opportunity to improve our commercial sales strategy in line with value optimisation. We are also advancing our exciting PGM Tailings Re-treatment project, where we expect to mine one of our old tailings dams hydraulically for the extraction of both PGMs and chrome. Re-treatment of old tailings is not new in mining and is a great source of medium-term value. This will allow us to tap into a low risk, low cost on surface asset to enhance our overall profitability.

Above all else, we will continue to maximise the conservation and generation of cash and maintain our relentless focus on overheads and fixed costs. Against these priorities, we have already made good progress but there is much more to do.

Sustainability and social agenda

Our relationships with our employees and the communities who live on and around our operations are key to our performance. Pre-eminent amongst the requirements is the need to improve housing, facilitate good health and education and continue to deliver on our environmental responsibilities.

The conversion or upgrade of hostels into family units and single private units is one of the measures we are judged against and to date, we have converted 107 hostel blocks. We expect to achieve completion in 2014.

All the conversion work thus far has been executed by Historically Disadvantaged South African (HDSA) Greater Lonmin Community (GLC) companies which are now able to manage and deliver multimillion Rand projects as a result.

We have also concluded research and scoping projects around Integrated Human Settlements as part of our long-term planning for housing development and supporting infrastructure at Marikana.

Post the year-end, we signed an agreement with the Provincial Department of Human Settlement, whereby, we contributed 50ha of serviced land for immediate development. This land contribution is an integral part of the integrated human settlement plan for the Marikana area and forms part of our commitment to support the Presidential initiatives to improve living conditions. In addition Lonmin will contribute at least R0.5 billion over the next five years towards employee accommodation and bulk services as part of its Social Labour Plan programme.

Social infrastructure cannot be delivered by business alone but this is an area in which Lonmin's involvement must be accelerated to produce a step change. By the same token, and again in partnership with Government, we will remain committed to our long-held objective of reaching "zero-harm" in everything that we do. We must also ensure that we minimise our use of power and water - both of which are limited.

Finally, this approach supports the goals and initiatives for the business set out by the Board in early 2013 which encompassed employee relations, empowerment, migrant and local labour, use of invested capital and infrastructure and housing and accommodation.

Black Economic Empowerment (BEE)

Our BEE and Mining Charter commitments require Lonmin to increase HDSA ownership in its prospecting and mining ventures by 31 December 2014 to at least 26%. By 30 September 2013, HDSA investors directly and indirectly owned 18% of the share capital of the Company's subsidiaries that own and operate Marikana and Limpopo and that participate in the Pandora joint venture, as well as 26% of the share capital of its subsidiary that owns Akanani.

We are now deeply engaged in examining ways in which the remaining 8% we need to achieve might be apportioned. There is clearly a balance to be struck between delivering this for our employees and communities and doing so in a way which is sustainable, fair and equitable to our present shareholders. Share ownership schemes are one area of our thinking, although not the only one, and our ability to explore those actively is facilitated by the signing of our recent union recognition agreement.

We have not yet finalised all our proposals, and any future transaction would need to be considered on its merits.

Dividend

A dividend is not proposed for the current financial year. However, Lonmin has confidence in the future demand for PGMs and our expectation is for prices to firm in the future. Our Renewal Plan anticipates positive free cash flow from the 2014 financial year onwards. The return to stronger earnings and cash flows will permit the resumption of dividends. When we do resume the payment of dividends, we would intend to follow the existing policy of declaring an ordinary final dividend at a rate which the Board expects can at least be maintained in subsequent years.

Conclusion

Overall, the longer-term fundamentals of the PGM markets remain robust, although we continue to be cautious about the market in the near and medium-term.

We will enhance value for our shareholders by leveraging our established operations and quality assets in the world's premier PGM deposit through:

§ Embedding our operational credibility and excellence;

§ Rebuilding our employee and stakeholder relationships;

§ Improving utilisation of our infrastructure, especially Saffy and processing;

§ Continued focus on cost control;

§ Cash conservation and funding capital from our operations; and

§ Driving our social and citizenship agenda through partnership.

Outlook

Given the prevailing labour landscape combined with an uncertain market outlook, we are maintaining sales guidance in excess of 750,000 Platinum ounces with capital spend estimate set at $210 million, in line with our Renewal Plan. Unit cost of production is guided to be less than wage inflation.

Colleagues

Finally, I would like to offer my thanks and congratulations to all our employees, contractors, communities and partners for their hard work throughout the year. Without their dedication we would not be reporting such positive achievements.

Ben Magara

Chief Executive Officer

10 November 2013

OPERATIONAL REVIEW

Safety

Our safety aim is simple - zero harm. However there still remains a lot to do.

Lonmin believes this objective is achievable, and that every injury or fatality is preventable.

Our Lost Time Injury Frequency Rate (LTIFR) in 2013 continued to improve, this time by 15.9% to reach 3.50. However, improvements become more and more difficult as safety achievements are made. Initially systems, protective equipment and working practices must be evaluated, where after a culture of safe working must be designed and implemented. But after this, safety increasingly rests on the behaviours and mind-sets of individuals which is a much harder challenge to overcome.

Some of our shafts remain industry leaders in safety. 4B/1B, for example, is deemed the safest shaft in the country, achieving seven million fall of ground fatality free shifts during the year. It won the prestigious JT Ryan trophy this year to mark it as South Africa's safest shaft of its type.

We were deeply saddened by the deaths of three colleagues in falls of ground during the financial period.

Our safety strategy rests on three pillars: fatality prevention; injury prevention; and safe production. Within each of these pillars the strategy focus is on leadership, simplifying systems, creating an enabling environment and creating a safety conscious culture.

We believe that keeping people safe is a team effort and that good working relationships lead to good working practices.

Another feature of our safety initiatives has been the continual empowerment of employees to exercise their right to withdraw from unsafe work areas. We report and analyse these incidents weekly and use the data to address shortcomings and drive improvement.

Finally, safety for Lonmin does not end at the gate to a mine. We work hard with employees, Non-Governmental Organisations and authorities to address concerns about crime, stress and substance abuse away from work.

Mining Division

Overview

In the financial year 2013, Marikana underground operations delivered their best performance in the last six years. Given the issues at the end of last year, this is a welcome achievement. We maintained the momentum established at the beginning of the financial year and achieved an impressive result, to mine a total of 11.7 million attributable tonnes during the year, an increase of 1.3 million tonnes from 2012.

Of this, 11.0 million tonnes were from Marikana underground operations, being a 12% increase from 2012.

It is important to read these results, however, within the context of the six week stoppage and early ramp up of late 2012, which affects year on year comparisons favourably for 2013.

K4 shaft was placed on care and maintenance at the beginning of the year and contributed 0.1 million tonnes in the prior year.

Productivity, measured as square metres per mining employee (Marikana mining) excluding opencast, W1 and ore purchased from our joint venture operations, improved by 6% year on year.

The impact of Section 54 stoppages, management induced safety stoppages and labour disruptions reduced to around 0.6 million tonnes compared to 2.4 million tonnes for the financial year 2012, which included the lengthy strike action and wider disruption at Marikana.

The reduced number of Section 54 stoppage figures also provides encouragement in terms of our relationship with the Department of Mineral Resources (DMR) at all levels.

Marikana Ore Reserves and Grades

Performance with respect to ore development was positive, resulting in the ore reserve position increasing by 14.7% from the level reported at the end of 2012 to 3.8 million centares. The most significant increase was at the Middelkraal operations and is almost entirely due to the increase at Saffy shaft where the ore reserve position increased by 108.7% from 2012. Westerns operations also delivered a significant year on year increase in ore reserves with a 36.6% increase at Rowland shaft. The overall improvements are in line with Lonmin's strategy of creating greater flexibility at these shafts. The ore reserve position remained largely unchanged but healthy at the Karee operations and decreased as planned at the Easterns operations.

Mining grades as delivered to the concentrators remained largely unchanged compared to 2012. The salient factors affecting the mining grades are:

§ Underground Merensky grade increased by 3.0% due to higher in situ grades;

§ UG2 reef grade was unchanged;

§ Stoping dilution was controlled as planned; and

§ The ratio of development ore to stoping ore decreased slightly, based on a less aggressive ore reserve growth.

Business Improvement Initiatives

De-Bottlenecking of Operations

A pilot project based on the Theory of Constraints management philosophy was carried out at Rowland Shaft during the year. The project has delivered promising results with the production output at Rowland increasing towards the end of the year to achieve an 11.4% increase from the last financial year. Our intention is that this philosophy will be integrated into the mining operating model and rolled out to all operations, starting with Saffy. The best practice teams have also undergone extensive training in this and will assist in the roll out.

Alternative Shift Cycle Configuration

A project was initiated as one of the Board's five initiatives to investigate alternatives to the current eleven day per fortnight shift cycle that is being worked. The brief was to explore alternative shift cycles that would be value accretive for all stakeholders in the business. A number of options have been investigated and explored and have been narrowed down to those that have the greatest probability of success at our operations. The remaining options will be further refined and consultations with the unions will follow during 2014. Implementation will be evaluated thereafter.

Technical and Leadership Skills Improvement

An increased emphasis is being placed on training and development of people across all levels of the Mining Division. A leadership development programme was introduced during the year with the aim of equipping all leaders with the necessary skills to face the challenges of the ever changing working environment. All mining crews attended a one day team training session during the year as a follow up to the three day training sessions that were held during 2012. Phase two of the team training programme has been developed and will be rolled out during 2014. Learnerships and skills development training in the form of mining, engineering and technical services learnership programmes as well as the learner official and graduate programmes have begun to deliver success as graduates of these programmes were appointed into vacancies in the organisation during the past year. Based on the successes to date, these programmes are set to continue and be further refined.

Best Practice / Optimisation Teams

The optimisation and best practice teams were strengthened during the year and have been deployed across the operations with the aim of assisting in identifying the causes of underperformance and to assist in implementing the appropriate corrective action. The process also involves coaching of supervisors in supervisory best practice and coaching the mining teams in best practice mining cycles and work practices.

Absenteeism Project

Unplanned absenteeism remains a challenge in the operations and a number of projects are underway to mitigate the reasons for key team members not being at work.

The inflationary cost pressures experienced by the platinum industry continue to be of great concern and productivity improvement programmes, as outlined above, play an important role in reducing the impact. Unit cost of production increases for mining operations, at 5.8% year on year, were successfully contained at levels below wage inflation.

Overview of Marikana mines

Karee

Karee operations, comprised of K3, 4B/1B and K4, mined 4.95 million tonnes during 2013, an increase of 12.9%. K3, our largest shaft, increased by 17.2% whilst the grade increased by 9.2% year on year mainly as a result of an increase in the Merensky grade as mining increased in the higher grade decline area.

Middelkraal

Hossy shaft increased tonnes hoisted by 21.6% to 1.05 million tonnes during 2013, despite continuing challenges relating to machine reliability, the availability of replacement parts and retention of trained artisans that have negatively affected the historical mechanisation of this shaft. The decision to introduce hybrid mining continues to deliver positive results. The roll out of the hybrid crews will be further pursued in 2014.

Importantly our investment and focus on Saffy has begun to yield positive rewards, as production for the year reached 1.15 million tonnes a 28.1% increase from last year as its ore reserve position increased by 108.7% year on year in line with plans to ramp up production at this shaft. Notwithstanding this encouraging increase in production, the ramp up at Saffy has been slower than planned as it continued to face poor ground conditions and follows a process of stringent roof support systems. The significant increase in available ore reserves however now provides the flexibility required to address these challenges. Additional stoping crews have been deployed from other shafts and more will be added to Saffy which gives us confidence that the further ramp up planned for 2014 can be realised. We expect Saffy to mine 200,000 tonnes per month when it reaches full capacity making this Lonmin's second largest shaft.

Westerns

Production from our Westerns operations, Rowland, Newman and W1, at 2.90 million tonnes increased in 2013 by 9.7%, or 256,000 tonnes from 2012. Rowland achieved 14 million fall of ground fatality free shifts - the best in the South African mining industry in 2013. The depletion of Newman continued as expected. Grades at both Rowland and Newman shafts remained unchanged during 2013 when compared to 2012.

Easterns

At our Easterns operations, performance for the year decreased from 1.0 million tonnes produced in 2012 to 0.9 million tonnes produced in 2013. This is in line with the planned depletion of E1. Grade at E1 shaft increased by 2.0% year on year as reef development reduced in line with the declining production profile. Grades increased at E2 shaft and E3 shaft by 3.6% and 6.2% year on year respectively as stoping moved to the higher grade lower levels of the shafts.

Opencast

Production at the Merensky opencast operation at Marikana increased from 0.4 million tonnes in 2012 to 0.5 million tonnes in 2013. We evaluate our options around opencast operations on a continuous basis especially in this relatively subdued price environment. It is currently planned to scale back on these operations in 2014 as production from other shafts increases.

Pandora Joint Venture

Footnotes:

1 Represents Lonmin's 42.5% share of the total tonnes mined.

2 Lonmin purchases 100.0% of the ore produced by the joint venture for onward processing.

The project to extend the mining footprint at E3 shaft by another two levels was completed at the end of 2013 with the newly developed 9 and 10 levels being commissioned.

Capital Spend

Capital expenditure in the Mining Division was limited to $99 million during 2013. The majority of the capital was spent on sustaining capital across the various shafts and central engineering. Only K3 Shaft UG2 Decline project, Saffy Shaft and Rowland Shaft were allocated capital funds to continue with ore reserve development projects that are currently in execution. K4 shaft will continue to be on care and maintenance for the duration of 2014. Key work on ore passes and critical infrastructure will take place during 2014. The restart of K4 is currently contemplated to take place in 2015 and its ramp up will be subject to market conditions.

Process Division

The Processing Division also had another good year.

During the financial year our total tonnes milled increased by 9.3% to 11.8 million tonnes. This was a commendable achievement which reflects the increase in tonnes mined in a challenging year. The total milled head grade improved to 4.54 grammes per tonne or 1.1% higher than the prior year period.

We saw a continued improvement in the concentrators' efficiency during the year, with an exceptional improved year on year recovery performance up from 86.1% to 87.0%. This was achieved against the backdrop of one plant being out of operation for an upgrade for the full year. We rationalised plant use and took the opportunity to upgrade the plant at the same time. The continued multi-year investment made in the concentrator operating assets, to secure higher sustainable run times over previous reporting periods, enabled this outstanding performance. We are particularly proud that all of our plants are achieving recoveries in excess of 80% for the first time.

The Eastern tailing treatment plant continued to show improved recoveries, whilst the Eastern concentrators also delivered an encouraging improvement in the reporting period. The continued impact of the concentrator improvements can be seen in sustainable, improved throughputs and efficiencies across the plants that were in operation in 2013.

For the financial year, we achieved 750,942 saleable ounces of Platinum in concentrate, up 10.5% and the highest amount since 2007 due to higher mined production and improved recoveries. Refined production of 709,029 Platinum ounces were lower as a result of refilling the pipeline and a stock lock up following the smelter incident at the Number Two furnace. Platinum sales of 695,803 ounces were achieved during 2013.

The strategy to increase the back up capacity at the smelter has proven to be successful, as production from the smelter for the full year did not suffer after the failure in April 2013 of the Number Two furnace roof. Whilst the smelter was able to process the backlog, some excess stock remained in the pipeline at the refineries at the year end. A full refurbishment of all the pyromet furnaces ancillary equipment was completed to improve the reliability of the back up capacity.

PGM ounces produced of 1,336,109 were down 13,693 or 1.0% compared to the prior year period. The difference in production of Platinum and PGMs is a reflection of the longer processing times for non-Platinum PGMs.

People development

Our mission directed works teams have gone from strength to strength this year. They are focused on vertical alignment but more importantly they are used to engage each employee in every aspect of the workplace. The level of innovation from the shop floor is impressive and contributing to the continuous improvement in results.

We have launched the first Processing learning programmes with ten employees passing the first phase on a MQF level 2. This is the first of its kind in the platinum industry.

Capital Spend

In 2013, the Process Division spent $52 million on capital compared to $121 million in 2012. The 2013 expenditure included the completion of the Number One shaft concentrator and the Number One furnace integrity optimisation. The prior year included the completion of the Tailings Treatment Project and the new Number Two furnace.

Labour Relations

Unions

The labour relations landscape changed significantly following the events at Marikana in August 2012. The Association of Mineworkers and Construction Union (AMCU) became the new majority union representing 66% of our total workforce. This significant increase in membership resulted in the National Union Mineworkers' overall membership declining to 14% of the total workforce.

We were legally obliged to terminate our existing union agreements and negotiate new ones as a result of these changes, most significantly in the year our new agreement with AMCU, as largest union. It is unfortunate that this process is formally called "derecognition" in South Africa - a term which is unhelpful and does not reflect events.

We are now actively engaging with minority unions as our view is that every employee's voice must be heard, regardless of which union, if any, they belong to.

Going forward, our primary focus will remain on rebuilding relations with our employees and strengthening bonds with the representative unions of their choice.

Employee Value Proposition

We have made a good start with the Employee Value Proposition initiative. The main focus of this initiative is to address the needs of our employees and as we work to rebuild relationships. It seeks to go beyond taking an interest in an employee only when he or she is at work and takes a holistic approach. An example of the kind of initiatives we want to see more of in this area is financial literacy training, aimed at addressing the high levels of debt among our employees. More than 11,000 employees participated in this training in the last twelve months and it has now been incorporated into the induction programme.

Judicial Commission of Inquiry

The Farlam Commission into the events of August 2012 at Marikana continues with our full participation. We continue to wholly support the inquiry and expect some of our employees to be asked to give evidence in early 2014.

MARKET REVIEW

Overview

In 2013 Lonmin sold 695,803 ounces of Platinum into the market. Platinum sales contributed 69% of our turnover. Palladium was the second highest contributor to the revenue basket with the 313,030 ounces sold constituting 15% of Lonmin's income. Combined sales of Rhodium, Ruthenium and Iridium contributed a further 8% and Gold and Base Metals made up the balance.

Autocatalyst production remains the largest end user of our products. The internal combustion engine is set to remain the dominant drivetrain for passenger and commercial vehicles for the foreseeable future, offering the best combination of fuel efficiency, purchase cost and running cost. Diesel engines for light duty vehicles, which are more highly platinum loaded than gasoline engines, retain their fuel efficiency advantage over gasoline at a time when reducing CO2 emissions is paramount for automakers. Of the two leading light duty diesel markets, Europe is mature while India still has significant growth potential. Increasing categories of non-road engines are now subject to emissions legislation in the US and Europe, resulting in growing platinum demand despite slowing vehicle production in Europe. Rising concerns over air quality in China and other growing markets is expected to see emissions legislation tightening for both on-road and non-road vehicles, despite ongoing efforts to substitute metals with less volatile price profiles. PGMs remain the most effective product for autocatalyst production.

Jewellery, driven by Chinese demand, which has taken advantage of periods of lower prices and strengthening local currency continues to grow at a steady pace and is forecast to contribute 37% to platinum demand in 2013.

The influence of primary production from South Africa on platinum prices is diminishing somewhat, in part due to the growth of recycling in the northern hemisphere which is having an increasing impact on primary supply.

PGM prices

The 2013 calendar year started with a platinum price rally on the back of supply fears and planned producer restructuring, with prices peaking at $1,725 per ounce in early February. Thereafter, investor concerns about excess capacity removed much of the upside momentum and the price retreated back towards $1,400 per ounce by the end of September, despite the purchase of 660,000 ounces of platinum by the Absa Exchange Traded Fund (ETF).

The gold price collapse in April pulled platinum down with it. At the beginning of April gold was trading at over $1,600 per ounce, but by the end of June had fallen to below $1,200 per ounce and has since recovered to over $1,300 per ounce.

Firming palladium demand supported a steady rise in the palladium price through the first half of the year, followed by a more volatile second half.

Rhodium is a small market and susceptible to price volatility from trading movements.

Supply

Primary South African supply is unlikely to grow over the next year as a result, primarily, of restructuring activities and there is mounting pressure on primary producers to reduce operating costs and raise operating efficiencies.

Platinum supply in the Rest of the World is forecast to remain flat in 2013, with growth in Zimbabwe offsetting lower production in Russia. Production in North America has been flat year on year. As outlined earlier the rate of recycling will compensate for the lower primary supply.

Demand

Autocatalyst PGM demand has inevitably been affected by the slow down in vehicle production, but was mitigated by the rise in Chinese jewellery demand.

Car production in Europe, diesel's largest car market and hence platinum's largest automotive market, is regarded by many in the industry to be close to a return to growth after several years. Despite the emergence of some very competitive gasoline cars, highly fuel efficient diesel took just short of 50% of light duty vehicle sales and we anticipate that this will continue.

Palladium automotive demand growth has excelled over the last five years, increasing by 1.91 million ounces mainly on the back of strong gasoline vehicle sales in emerging markets and the increasing substitution of platinum in diesel vehicles in Europe. Over the same period, however, the price has more than doubled leading to a drop in demand in other applications and encouraging further recycling. Net new metal demand growth was 480,000 ounces.

Jewellery

Jewellery remains the second major market for platinum. China continues to dominate the platinum jewellery market and indeed accounts for 24% of total platinum demand alone. Platinum is making headway in India, the largest market for gold jewellery. India is now the fourth largest market for platinum jewellery and is expected to move into second place over the next few years on the back of changing demographics.

Investment

Overall holdings in the principal platinum ETFs grew by just 22,000 ounces or 1.5% over the first four months of the year to 1,474,000 ounces. Absa's NewPlat ETF, launched in April, has added 660,000 ounces (to the end of September) and total holdings have increased by 516,000 ounces (35%) to 1,990,000 ounces.

Palladium ETFs started the year more strongly than platinum, adding 160,000 ounces in Quarter One, taking total holdings in the principal ETFs to 2.0 million. Over the last three months, the major ETF holdings have seen modest outflows of some 110,000 ounces, down to 1.75 million (to the end of September). Year to date palladium ETFs have lost 46,000 ounces (-2.6%). Absa is expected to launch a new palladium ETF by the 2013 calendar year end.

Rhodium ETF holdings have almost doubled this year, adding 41,000 ounces to total 95,000 ounces.

Outlook

PGM demand growth from autocatalysts is based on the expected growth in vehicle numbers and on more classes of vehicle becoming subject to tighter emissions legislation. Europe with Euro 6, and the US with LEV III, are leading the way. These regulations are likely to form the basis for legislation in all regions in future although the availability of sufficiently clean fuel, both diesel and gasoline, is a prerequisite for this. Increasingly driving emissions are found to be significantly higher than legislated standards, raising the prospect of even tighter standards, and hence PGM demand.

Consumers and retailers, particularly in China and increasingly in India, continue to grow the market for platinum jewellery. Platinum is increasingly seen as the bridal metal of choice. Retailers continue to expand their store networks to meet demand as disposable income rises outside the main metros in Asia.

The minor end uses of platinum - including chemical and petroleum catalysis, medical, glass fabrication and electronics - together make up around 20% of total demand. Most are highly dependent on the particular properties of platinum and face little risk from substitution, but significant recycling takes place too, reducing the need for new metal. Palladium and Rhodium are highly dependent on the autocatalyst market.

RESERVES & RESOURCES

· Revisions to the South African Mineral Resource estimates were confined to the Marikana and Pandora properties. The Akanani, Limpopo and Loskop Mineral Resources were unchanged during 2013.

o The Mineral Resources at Marikana (excluding tailings) increased by 3.9 Moz of 3PGE+Au in 2013. This increase is attributed to the extension of the Inferred Mineral Resources of 2.5 Moz and Indicated Mineral Resources of 2.0 Moz which was offset by a decrease of Measured Mineral Resources.

o Measured Mineral Resources decreased by 0.6 Moz 3PGE+Au. Mining depletion accounted for a decrease of 1.5 Moz which was offset by an increase of 0.9 Moz converted from Indicated Mineral Resources.

o There were no material changes in geological losses at Marikana.

o The decrease of 0.05 Moz 3PGE+Au to the Pandora Mineral Resource was due to mining depletion.

· No revisions were made to the Mineral Resources in Sudbury and Kenya during 2013.

· The following revisions to the Marikana Mineral Reserves were made in 2013, there being no changes to the Limpopo Reserves:

o The focus at Marikana in 2013 was on ore reserve management which resulted in an increase of 0.4 Moz 3PGE+Au Proved Mineral Reserves compared with 2012.

o The total UG2 Reef and Merensky Reef Mineral Reserves increased by 1.6 Moz to 42.9 Moz of 3PGE+Au due to an increase in the Probable Mineral Reserves at K4 Shaft Merensky Reef as well as the inclusion of 0.7 Moz 3PGE from the Eastern Platinum Number One tailings dam.

A summary of the changes to Lonmin's Mineral Resources and Mineral Reserves are shown in the following tables and should be read in conjunction with the Key Assumptions section of this report. Detailed breakdowns of these Mineral Resources and Mineral Reserves into their respective confidence categories can be found in the sections specific to the individual areas.

PGE Mineral Resources (Total Measured, Indicated & Inferred)1

Notes

1) All figures are reported on a Lonmin Plc attributable basis, the relative proportions of ownershipper project being shown in the Key Assumptions section of this report.Mineral Resources are reported Inclusive of Mineral Reserves.

2) Limpopo2 excludes Baobab shaft.

3) Loskop and Sudbury PGM JV exclude Rh, due to insufficient assays, and therefore 2PGE+Au are reported. Tailings Dam exclude Au, due to assay values below laboratory detection limit, and therefore are reported as 3PGE.

4) Quantities and grades have been rounded to one or two decimal places, therefore minor computational errors may occur.

PGE Mineral Reserves (Total Proved & Probable)1

Notes

1) All figures are reported on a Lonmin Plc attributable basis, the relative proportions of ownership per project being shown in the Key Assumptions section of this report.

2) Limpopo excludes Baobab shaft.

3) Tailings Dam exclude Au, due to assay values below laboratory detection limit, and therefore are reported as 3PGE.

4) Quantities have been rounded to one decimal place and grades have been rounded to two decimal places, therefore minor computational errors may occur.

Key assumptions pertaining to the 2013 Lonmin Mineral Resource and Mineral Reserve Statement

· Mineral Resources are reported inclusive of Mineral Reserves. Mineral Resources that are converted to Mineral Reserves are also included in the Mineral Resource statement.

· All Mineral Resources and Mineral Reserves quoted reflect Lonmin's attributable portion only. There have been no changes in the percentage attributable to Lonmin during the year. The following percentages were applied to the total Mineral Resource and Mineral Reserve for each property:

o Incwala Resources, Lonmin's BEE partner, owns 18% of both Western Platinum Limited and Eastern Platinum Limited, and 26% of Akanani. Lonmin's 23.56% holding in the share capital of Incwala does not factor in the calculations of its attributable interest.

o Limpopo includes Dwaalkop joint venture, which is a joint venture between Mvelaphanda Resources (50%) and Western Platinum (50%) that is managed by Lonmin.

o Eastern Platinum Limited has an attributable interest of 42.5% in the Pandora joint venture together with Anglo Platinum (42.5%), Mvelaphanda Resources (7.5%) and the Bapo Ba Mogale Mining Company (7.5%).

o Western Platinum Limited has an attributable interest of 50% in the Loskop joint venture together with Boynton Investments (50%).

o Lonmin's share of the Sudbury PGM joint venture is currently a nominal 50%, of the product from any PGE deposit developed on the participating properties. The agreement is that Lonmin will be allocated its pro-rata share in PGE's and Vale will be allocated its pro-rata share in Nickel, Copper, Cobalt, Gold and Silver. The exchange of metals will be governed by prevailing metal prices at the time of the refined metal production.

o Lonmin has a 49% attributable portion of the Bumbo Mineral Resource in terms of The West Kenya Earn-in and joint venture agreement between African Barrick Gold Limited and AfriOre International (Barbados) Limited, a wholly owned subsidiary of Lonmin Plc.

· Where grades are reported as 3PGE+Au these are a summation of the Platinum, Palladium, Rhodium and Gold grades. Modelling of available assay information, obtained from drillhole core, indicates that the proportion of 3PGE+Au contained in 5PGE+Au, which includes Ruthenium and Iridium, is approximately as follows:

· Where Nickel (Ni) and Copper (Cu) grade estimates are derived from sufficient reliable information for the various Mineral Resources, they are reported as average grades in percent. These grades represent acid soluble proportions. Acid soluble percentages of Ni and Cu are closely correlated to the metals present as sulphide minerals.

· Mineral Resources are reported as "in-situ" tonnes and grade and allow for geological losses such as faults, dykes, potholes and Iron Rich Ultramafic Pegmatite (IRUP).

· Mineral Resources are estimated using a minimum true width of at least 90 cm and therefore may include some diluting material.

· Proved and Probable Mineral Reserves are reported as tonnes and grade expected to be delivered to the mill, are inclusive of diluting materials and allow for losses that may occur when the material is mined.

· A Mineral Resource and Mineral Reserve estimate of the Eastern Platinum No 1 tailings dam has been included. The remaining tailing dams will be considered as and when the appropriate assessments take place.

· For economic studies and the determination of pay limits, consideration was made of both short and long term revenue drivers. The following long term global assumptions were used:

o Precious Metals (per Troy Ounce): Pt USD1,865, Pd USD888, Rh USD1,348, Ru USD95, Ir USD630, Au USD1,385.

o Base Metals (per metric tonne): Ni USD14,890, Cu USD7,233.

o Average exchange rate of USD1 to Rand 9.0.

· Dilutions are quoted as waste tonnes / (waste + ore tonnes) in percent.

· Bumbo Mineral Resources are reported using a cut-off grade of 0.7% copper equivalent.

· The copper equivalent formula for Bumbo was based upon commodity prices at the close of the market on 25th July 2011, namely:

o Copper: USD9633/tonne ($Cu)

o Zinc: USD2441/tonne ($Zn)

o Gold: USD1614/ounce ($Au)

o Silver: USD40/ounce ($Ag)

o The copper equivalent (CuEq) is as follows:

CuEq (%) = Cu% + (Zn%*($Zn/100)/($Cu/100)) + (Au g/t*($Au/31.1034768)/($Cu/100)) +

(Ag g/t*($Ag/31.1034768)/($Cu/100))

· Unless otherwise stated, the Lonmin Mineral Resources and Mineral Reserves estimates were prepared or supervised by various persons employed by Lonmin.

FINANCIAL REVIEW

Overview

The foundation for this year's financial performance was laid in the first half of the financial year when we strengthened our financial position with a successful refinancing and we achieved a better than anticipated production ramp up following the production disruption in 2012. The excellent operational performance continued into the second half of the year. This coupled with a consistent focus on cost containment and assisted by the weakening Rand resulted in a solid financial outcome for the year ended 30 September 2013.

The Group undertook a successful Rights Issue which was completed in December 2012. The Rights Issue was fully subscribed with just below 97% of the take up coming from existing shareholders and the remainder from the rump placement. Total net proceeds of $767 million after costs and foreign exchange movements were raised. In addition, the terms of our debt facilities were revised in conjunction with the successful Rights Issue. Details of the amendments to debt facilities are included below. This refinancing has resulted in a robust balance sheet with significantly improved funding flexibility.

The exceptional production performance during the year allowed us to replenish the metal in process pipeline which was depleted in order to protect liquidity in September 2012. Saleable metal in concentrate Platinum production reached its highest level in 6 years. However PGM sales volumes were lower compared to 2012 given lower opening stocks and the lock up in inventory as a result of the smelter incident in April 2013. The overall PGM pricing environment improved marginally which partially mitigated the effect of lower sales volumes but the net result was lower revenue for the year ended 30 September 2013 compared to 2012.

The Rand was significantly weaker during the year under review resulting in favourable exchange impacts. These, coupled with positive stock movements as a result of the metal in process replenishment, offset cost escalations yielding significantly improved profitability for the year ended 30 September 2013. Profit for the year attributable to equity shareholders amounted to $166 million (2012 - loss of $410 million) and the earnings per share were 31.2 cents compared to a loss per share of 107.7 cents in 2012 (note that the prior period loss per share has been recalculated, in accordance with accounting standards, to take into account the effects of the Rights Issue referred to above). It should also be noted that 2012 profitability was severely impacted by the disruptive events of last year and the impairment of Akanani, an exploration and evaluation asset.

The successful refinancing of the business, the return to profitability during the year under review and the revised strategy and streamlined capital investment programme have allowed us to repay all debt and end the year in a net cash position of $201 million.

Income Statement

The $97 million movement between the underlying operating profit of $67 million for the year ended 30 September 2012 and that of $164 million for the year ended 30 September 2013 is analysed below.

Revenue

Total revenue declined by $94 million from 2012 to $1,520 million for the year ended 30 September 2013.

As mentioned in the overview the PGM pricing environment improved only marginally over the last year and the impact on the average prices achieved during the year on the key metals sold is shown below:

The US Dollar basket price (excluding by-products) increased by 0.5% contributing $4 million to the movement in revenue. It should be noted that whilst the US Dollar basket price only increased by 0.5% from the 2012 financial year, in Rand terms the basket price increased by 17% impacted by the relatively weaker Rand.

PGM sales volume for the year to 30 September 2013 was 6% down on the year to 30 September 2012. The reduction in PGM volumes, mainly as a result of process inventory replenishment following last year's production disruption as well as some inventory lock up as a result of the smelter incident, contributed $90 million to the overall decrease in revenue. However, the mix of metals sold resulted in a positive impact of $3 million mainly due to a higher proportion of Platinum due to metal in process inventory timing differences. Base metal revenue was down $11 million as the 15% increase in Chrome volumes was more than offset by lower base metal prices and lower sales volumes of Nickel and Copper.

Operating Costs

Total underlying costs in US Dollar terms decreased by $191 million mainly due to positive metal stock and foreign exchange movements partially offset by the impact of increased production and cost escalations. A track of these changes is shown in the table below.

Marikana underground mining costs increased in the year by $150 million or 18%, mainly as a result of a 12% increase in production on the back of a successful ramp up following last year's seven week production disruption. This was compounded by the 14% wage increase incurred in October 2012. Marikana opencast mining costs increased by $27 million driven by a 19% increase in production as well as wage inflation which impacted on contractual mining rates.

Concentrating and processing costs increased from 2012 by $28 million or 8% as escalation effects, in particular from electricity costs were partially offset by reduced refined production due to smelter downtime.

Overheads increased by $13 million or 10% largely due to cost escalation effects.

In 2012, $120 million relating to fixed production overheads incurred during the strike for which there was no associated production was re-allocated to special costs.

Ore purchases increased by $29 million on the back of a 32% increase in tonnes purchased.

The year under review saw a replenishment of stock in process following last year's pipeline depletion. This has resulted in a $393 million positive impact on operating profit, excluding exchange impacts, arising from metal stock movements. The $393 million comprises of a $253 million increase in stock in 2013 and a $140 million stock decrease in 2012.

The Rand weakened substantially against the US Dollar during the year under review averaging Rand 9.24 to USD1 compared to an average of Rand 8.05 to USD1 in 2012 resulting in a $194 million positive impact on operating costs.

Depreciation, which is calculated on a units of production basis, increased during the year by $31 million as a direct result of increased production in both opencast and underground mining.

Cost of production per PGM Ounce

The C1 cost per PGM ounce produced for the year to 30 September 2013 was R8,832. This was an increase of 3.8% compared to 2012. The containment of unit costs in the face of cost escalation pressures (14% wage escalation and 12% power escalation) was achieved on the back of increased volumes, improved recoveries and our continued focus on cost control.

In the current year, we have introduced a more inclusive and transparent measure for unit costs, "Cost of production per PGM ounce". This measure differs from the C1 cost per PGM ounce produced in that it includes sales and marketing costs, as well as other management and shared services costs. This makes for a more easily understood cost comparison and benchmarking tool. The cost of production per PGM ounce in 2013 at R9,182 increased by 3.8% over 2012 which is in line with the C1 unit cost increase stated above. A trend analysis going back five years reveals a similar correlation between the two cost measures.

Further details of unit costs can be found in the Operating Statistics.

Special Operating Costs

Residual strike related costs arising from the Events at Marikana continue to be incurred. For the year ended 30 September 2013, these costs totalled $7 million and largely consisted of communication costs relating to reputational rebuild as well as costs related to the ongoing Farlam Commission. In addition $10 million was spent on the management restructuring exercise which formed part of the Lonmin Renewal Plan. The restructuring exercise was cost neutral in 2013 but is expected to yield savings of approximately R200 million per annum going forward.

In 2012 special operating costs of $769 million were charged. These related to the impairment of the Akanani exploration and evaluation asset ($602 million), strike related costs ($159 million) and other costs amounting to $8 million.

Impairment of Available for Sale Financial Assets

The $2 million impairment of available for sale financial assets represents the loss in value below the original cost price of one of our investments.

In 2012 the $6 million impairment represented the loss in value of one of our investments following the company's de-listing in December 2011.

Financing Costs

The total net finance costs of $9 million for the year ended 30 September 2013 represent a $25 million adverse movement compared to the total net finance income of $16 million for the year ended 30 September 2012.

Net bank interest and fees decreased from $27 million to $20 million for the year ended 30 September 2013 as the benefit of settling debt following the successful Rights Issue was partially offset by the unwinding of previously unamortised bank fees on settlement of the original loan facilities. Interest totalling $11 million was capitalised to assets (2012 - $26 million).

Following the retiring of debt after the Rights Issue, further periodic borrowings to fund the working capital cycle were largely incurred in Rand and benefited from the weakening of the Rand in relation to the US Dollar as the year progressed. Exchange gains for the year ended 30 September 2013 amounted to $8 million compared to a loss of $1 million in 2012.

Other finance costs largely relate to the unwinding of the discounting of site rehabilitation liabilities.

The interest rate swap entered into in 2011 to hedge against interest rate fluctuations was unwound after the underlying bank debt was settled. Fees amounting to $14 million were incurred as a result. The unwinding fees were partially offset by positive fair value movements amounting to $7 million upon the release of the cash flow hedge resulting from the interest rate swap.

The Historically Disadvantaged South Africans (HDSA) receivable, being the Sterling loan to a subsidiary of Shanduka Resources (Proprietary) Limited (Shanduka), increased by $18 million during the year to 30 September 2013 being $1 million of foreign exchange gains and $17 million of accrued interest. The $30 million increase in 2012 represented $14 million worth of exchange gains and $16 million of accrued interest. At 30 September 2013 the balance of the receivable stood at $399 million (2012 - $381 million) and is secured on shares in the Shanduka subsidiary whose only asset of value is its ultimate shareholding in Incwala Resources (Proprietary) Limited (Incwala). The value of the security, based on the value of Incwala, calculated based on discounted cash flows of Incwala's underlying investments in Western Platinum Limited (WPL), Eastern Platinum Limited and Akanani, currently marginally exceeds this amount. Should the value of security fall below the carrying amount of the receivable, an impairment charge would be effected.

In order to minimise the risk of the exposure to currency fluctuations on the Rand and Sterling proceeds expected, the Group entered into forward exchange contracts in synchronisation with the Rights Issue process. The US Dollar weakened over the offer period resulting in the Rand and Sterling proceeds received and translated at prevailing spot rates being more than that due under the forward exchange contracts. This resulted in the recognition of exchange losses under hedging arrangements of $11 million which was partially offset by a $1 million exchange gain on retranslation of advance proceeds of the Rights Issue.

Taxation

Reported tax for the current year was a credit of $58 million after the tax effects of special items of $85 million. The underlying tax charge is $27 million reflecting an effective rate of 17%. The underlying charge largely comprises deferred tax charges being recognised on accelerated capital allowances. The low underlying effective tax rate of 17% compared to a standard tax rate of 28% is largely driven by exchange effects on profits arising from a predominantly Rand tax base translated to the US Dollar functional currency.

Cash Generation and Net Debt

The following table summarises the main components of the cash flow during the year.

Cash flow generated from operations in the year ended 30 September 2013 at $53 million was lower than the $300 million recorded in 2012. The cash benefits of improved profitability were more than offset by adverse working capital movements, $189 million was attributable to the replenishment of the metal in process pipeline following last year's production stoppage as well as some lock up of the pipeline experienced as a result of the smelter incident. It should be noted that in 2012, working capital cash flows benefited from the reduction in stock levels at year end as well as from the revenue received in advance on the forward sale of gold.

Trading cash inflow for the year to 30 September 2013 amounted to $16 million (2012 - $263 million). The cash outflow on interest and finance costs increased by $6 million as the benefit of reduced debt levels was offset by amendment fees paid for revised debt facilities and the cost of unwinding the interest rate swap. Tax payments decreased by $6 million and represent provisional corporate tax payments which benefitted from unredeemed capital expenditure deductions. The trading cash inflow per share was 3.0 cents for the year ended 30 September 2013 against 69.1 cents for 2012. Note that the prior year trading cash inflow per share has been recalculated, in accordance with accounting standards, to take into account the effects of the Rights Issue referred to below.

Capital expenditure cash flow at $159 million was $249 million below prior year reflecting our revised strategy and capital investment programme. In Mining, the expenditure incurred was focused on sustaining capital across the various shafts as well as ore reserve development projects at K3 shaft UG2 decline, Saffy shaft and Rowland shaft. In the Process Division spend comprised the completion of work at the Number One shaft concentrator and the Number One furnace integrity optimisation project.

The Group undertook a successful Rights Issue which was completed in December 2012 and raised total net proceeds of $767 million after costs and foreign exchange charges. The proceeds of the Rights Issue were utilised to settle debt resulting in a net cash position at 30 September 2013 of $201 million compared to a net debt position of $421 million at 30 September 2012.

Key Financial Risks

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. This financial review focuses on financial risk management.

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, volatility 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 ongoing 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 for any material changes identified during the year, for example material acquisitions and disposals or changes in production forecasts. 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 year under review, the Group revised its debt facilities on the back of the successful Rights Issue. The amended US Dollar Facilities and amended Rand Facilities came into effect in December 2012. The proceeds of the Rights Issue were used to repay the Group's indebtedness under the original facilities, including (i) the repayment in full of amounts outstanding (amounting to $300 million plus accrued interest and applicable break fees) under the US Dollar Term Loan, which facility was cancelled; and (ii) the repayment of amounts outstanding under the US Dollar Revolving Credit Facility; and (iii) the repayment of amounts outstanding under the Rand Facilities Agreements.

The remaining facilities are summarised as follows:

· Revolving Credit Facility of $400 million at a Lonmin Plc level; and

· Three bilateral facilities of R660 million each at a WPL level.

The principal amendments to each of the original agreements were to remove the net debt/EBITDA and EBITDA/net interest covenants and to substitute these with the following financial covenants:

· consolidated tangible net worth will not be less than $2,250 million;

· consolidated net debt will not exceed 25 per cent of consolidated tangible net worth; and

· if:

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

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

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

Test Period Capital expenditure limit (Rand)

1 October 2012 to 31 March 2013 (inclusive) 800,000,000

1 October 2012 to 30 September 2013 (inclusive) 1,600,000,000

1 April 2013 to 31 March 2014 (inclusive) 1,800,000,000

1 October 2013 to 30 September 2014 (inclusive) 2,000,000,000

1 April 2014 to 31 March 2015 (inclusive) 3,000,000,000

1 October 2014 to 30 September 2015 (inclusive) 4,000,000,000

1 April 2015 to 31 March 2016 (inclusive 4,000,000,000

1 October 2015 to 30 September 2016 (inclusive) 4,000,000,000

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. These counter-parties comprise: BNP Paribas S.A., Citigroup Global Markets Limited, FirstRand Bank Limited, HSBC Bank Plc, Investec Bank Limited, J.P. Morgan Limited, Lloyds TSB Bank Plc, The Royal Bank of Scotland N.V., The Standard Bank of South Africa Limited and Standard Chartered Bank.

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 ongoing 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 shares, whose only asset of value is its shareholding in Incwala.

Interest Rate Risk

Given that all debt has been repaid, 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 majority of the Group's operating costs and taxes are paid in Rand. Most of the cash received in South Africa is in US Dollars. A majority 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.

During the year under review, Lonmin did not undertake any foreign currency hedging except in relation to Rights Issue proceeds as described above.

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 year 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 pre-paid 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 per ounce delivered.

Contingent Liabilities

The Group provided third party guarantees to Eskom as security to cover estimated electricity consumption for three months. At 30 September 2013 these guarantees amounted to $10 million (2012 - $12 million).

Simon Scott

Chief Financial Officer

10 November 2013

Responsibility Statement of the Directors in respect of the Annual Report and Accounts

We confirm that to the best of our knowledge:

· the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

· the Directors' report and Strategic report include a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

Roger Phillimore Simon Scott

Chairman Chief Financial Officer

10 November 2013

Operating statistics - 5 year review

Operating statistics - 5 year review

Operating statistics - 5 year review

Operating statistics - 5 year review

Footnotes:

Operating statistics - 5 year review