Lonmin Reports Progress

REGULATORY RELEASE

27 August 2015

LONMIN REPORTS PROGRESS

Lonmin Plc ("Lonmin" or "the Company") today provides an update on the action it has already taken to deliver its programme of shaft closures and workforce reduction announced on 24th July. The programme is planned to further reduce Lonmin's cost base and underpin the Company's ability to sustain a depressed Platinum pricing environment over an extended period of time.

Lonmin's stoppage of high-cost production and the potential reduction of the workforce by a total of 6,000 is intended to reduce costs and capital expenditure. Over the next two years 100,000 ounces of high-cost production will have been eliminated but in the meantime the available resources of Hossy will be mined for value. By the end of 2017 production will have reduced by 100,000 ounces per annum. Management has the target of cutting fixed and overhead costs at the same time.

Progress so far:

· 1,400 employees have left the business.

· The Section 189 consultation process on the remainder of the significant downsizing is proceeding on schedule. 

· Labour relations continue on a positive and realistic basis.

· Against a cost guidance of R10,800 per PGM ounce, at the end of July year-to-date underlying cash costs on an unaudited basis were R10,499 per PGM ounce, emphasizing the focused management attention.

· Underlying cash costs for the full year are expected to remain below the cost guidance of R10,800 per ounce.

The Board and Management have set the clear objective of containing capital expenditure while cash-harvesting immediately available ore reserves from the Hossy and Newman shafts. 

To support the Board and Executive Management in delivering these objectives, Lonmin has appointed Ron Series, a leading finance specialist, as advisor.

Lonmin Chief Executive Ben Magara said: "We welcome the support Ron will provide with his specialist skills and his wealth of experience. This will enable our executive team to focus on running the business, cutting costs and ensuring the most efficient running of our operations."

South African born, Ron has extensive international experience of developing businesses and building value. He has an excellent financial background and has successfully worked with shareholders, banks and other significant stakeholders in public and private companies.

Lonmin's objective is to maximize cash in the short-term and preserve long-term value for shareholders and all stakeholders and ensure the business is put in the right position to take full advantage of any improvement in PGM prices from the currently depressed levels.

- ENDS -

ENQUIRIES

Investors / Analysts:

Lonmin

Tanya Chikanza (Head of Investor Relations) +44 20 7201 6007 / +2711 218 8358

Media:

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