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Edited Transcript of IMP.J earnings conference call or presentation 5-Sep-19 10:30am GMT

Full Year 2019 Impala Platinum Holdings Ltd Earnings Call

Illovo Sep 20, 2019 (Thomson StreetEvents) -- Edited Transcript of Impala Platinum Holdings Ltd earnings conference call or presentation Thursday, September 5, 2019 at 10:30:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Gerhard S. Potgieter

Impala Platinum Holdings Limited - COO

* Johan Theron

Impala Platinum Holdings Limited - Group Executive of Corporate Affairs

* Kirthanya Pillay

Impala Platinum Holdings Limited - Group Executive of Corporate Development

* Lee-Ann N. Samuel

Impala Platinum Holdings Limited - Group Executive of People & Executive Director

* Mark Munroe

Impala Platinum Holdings Limited - Chief Executive of Impala Rustenburg Operations

* Meroonisha Kerber

Impala Platinum Holdings Limited - CFO & Executive Director

* Nicolaas Johannes Muller

Impala Platinum Holdings Limited - CEO & Executive Director

* Sifiso Sibiya

Impala Platinum Holdings Limited - Group Executive of Refining & Marketing

* Stanley Segula

Zimplats Holdings Limited - MD

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Conference Call Participants

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* Arnold Van Graan

Nedbank Capital, Research Division - Analyst

* Christopher Nicholson

Morgan Stanley, Research Division - Research Analyst

* Dominic O'Kane

JP Morgan Chase & Co, Research Division - Analyst

* Johann Steyn

Citigroup Inc, Research Division - MD and Head of South African Equity Research

* Nkateko Mathonsi

Investec Bank Limited (SA), Research Division - Resource Analyst

* Patrick Mann

BofA Merrill Lynch, Research Division - VP & Research Analyst

* René Carlo Hochreiter

NOAH Capital Markets (Pty) Ltd - Mining Analyst

* Steven Friedman

Renaissance Capital, Research Division - Associate

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Presentation

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Johan Theron, Impala Platinum Holdings Limited - Group Executive of Corporate Affairs [1]

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Good afternoon, ladies and gentlemen, and welcome to the Impala Results Presentation for Financial Year 2019. You would have seen that we've released our results this morning on SENS, both in short and long format. We have also released our MRM report today and a comprehensive analysis of our results. Today, this opportunity gives us the chance to present the results to you in person but also to take some questions and engage with investors. We've got people on the line new this year as well. We're also web streaming. So if you listen to us on the line and you want to click on, then you will get some visuals out of here as well.

So welcome to the presentation. I'm going to hand over to Nico, who will present. Afterwards, we will take some questions first from inside the room, but we will also give enough opportunity for people that are listening in, who will also pose some questions over the line.

So with that, Nico, can I hand over to you?

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Nicolaas Johannes Muller, Impala Platinum Holdings Limited - CEO & Executive Director [2]

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Thank you. Thank you, Johan. Obviously, at this point, I'm always glad that our results underpin my presentation skills. Nevertheless, here we are. I just want to welcome, in particular, our esteemed Chairperson, Dr. Mandla Gantsho, and 2 of our Board members, Alastair Macfarlane and Dawn Earp. And a warm welcome to you and to our results presentation for financial year 2019.

It's been a good year for the industry as we have seen a strong run in the palladium and rhodium dollar prices and similarly for the PGM basket price. But for Implats, in particular, it's been an exceptional year as we have been able to deliver very strong results into an improving market. And as a consequence, we have delivered an absolutely stellar set of financial results on its own right and particularly compared to previous years. And in particular, we are very, very happy about the marked improvement that Mark and his team has managed at Impala Rustenburg. And I'm hoping it will come out in the presentation, and they've achieved that through advancing many of the key outcomes of the strategic review that was conducted in 2017.

So our detailed results were published in the webcast earlier this morning. And so I'm just going to touch on a few key highlights. We after will open the floor to Q&A and for our team to respond to questions with myself. And so before we continue, I just want to draw your attention to our cautionary statement that pertains to any forward-looking statements that may be made here today.

So starting with the operational performance. As a company, one of our core philosophies and values is to reduce harm for the safety and health of our employees. So I'm very happy to report that we have continued with our year-on-year safety improvements. We have managed to reduce our number of work-related fatalities in the group from 7 to 5. And in that process, we have reduced our fatality injury frequency rate by 28% to 0.047 per million man-hours worked. We have similarly improved our lost time injury frequency rate by 12% to 5.30, and we achieved 1 million fatality-free shifts or more at 9 out of the 15 working sites within our portfolio.

The engine room of the company, which is the mining operations, continues to perform very strongly, and this is shown by the 1% improvement in tonnes milled from managed operations. And this was achieved despite the contracting footprint at Impala Rustenburg. Platinum and concentrate reduced by 5% to 1.498 million ounces.

And if I turn to the next waterfall slide, you can see that the key contributor to this is the reduction in third-party deliveries, which declined by 28% or 70,000 ounces. And that is attributed to the conclusion of a once-off toll refining contract that terminated at the end of 2018. The ounces in constructs from mine-to-market production was impacted by a reduction of 16,000 ounces at Two Rivers platinum, and this is attributed to the mining of the split reef that impacted on both grade as well as concentrator plant recoveries. This was fortunately made up by the marked improvement at Impala Rustenburg.

Gross refined PGM production benefited from the release of excess inventory and increased by 5% to 3.04 million ounces. So if I look at excess inventory, we started the year with 160,000 ounces of platinum in excess inventory, and there was an additional associated metals in the excess inventory. During the course of the year, we managed to process 70,000 ounces of platinum excess inventory from Impala Rustenburg but at the same time increased stock lockup at IRS by 13,000 ounces. So this resulted in a cumulative release of inventory of 57,000 ounces.

At the end of the year, we ended up with 103,000 ounces of excess inventory and at the metal prices that prevailed at the end of the year that was valued at ZAR 4.8 billion. This is scheduled to be released in more or less equal tranches over the next 2 financial years.

The operating cost was duly well managed at all operations within the group. And this resulted in a 4% increase in the unit cost per refined platinum ounce on a stock-adjusted basis, which increased to ZAR 23,942, which we believe is an industry-leading cost increase which is below inflation. If you look at the net unit cost increase that also benefited from the release of inventory, it actually declined by 8% to ZAR 22,673 per platinum ounce.

Capital expenditure in the group declined by 18% to ZAR 3.8 billion, and that's attributed to a reduction of ZAR 760 million at Impala. And that's as a consequence of the contracting footprint of the capital projects at 16 and 20 Shaft. We reduced capital expenditure at Zimplats by ZAR 110 million due to lower rates of fleet replacement. And then at Marula, we increased capital expenditure by ZAR 50 million -- ZAR 51 million, and that was as a consequence of our starting up the construction of a new tailings dam facility. So if we translate this into the financial performance, the refined platinum ounces sold that also benefited from the release of excess inventory, that increased by 12% to 1.515 million ounces. The revenue per platinum ounce received increased by 22% to ZAR 31,765 per platinum ounce. And that was as a consequence of an 11% increase in the dollar basket price as well as an 11% increase in the exchange rate.

So the increased sales volumes, combined with higher metal prices received, resulted in a 36% increase in total revenue to ZAR 48.63 billion. The cost of sales, which is not shown on the slide, that increased by 20% to ZAR 41.79 billion, and that was attributed to the lack of a credit associated with change in inventory compared to the previous year, the higher cost of metals purchased and an increase in operational cost. So the higher revenue, combined with the cost of sales, resulted in a gross profit of ZAR 6.8 billion, which compares very favorably to the gross profit of ZAR 1.1 billion that was achieved in the previous reporting period.

The group generated cash -- or free cash flow of ZAR 7.7 billion, and that contributed to a gross cash balance of ZAR 8.24 billion at the end of the financial period and a cash net of debt of ZAR 1.075 billion, which again compares very favorably to the net debt of ZAR 5.3 billion at the end of the previous reporting period.

So if you have a look at the slide, that shows on the right-hand side the total cost and revenue per platinum ounce achieved at each of our operations, and on the left-hand side, it shows the free cash flow contribution of all of our operations. So it is very gratifying for us to see that all of the operations within our portfolio contributed a positive free cash flow. And in particular, we are really pleased about Impala Rustenburg converted from a net cash outflow of ZAR 6.5 billion in 2018 to a positive cash flow of more than ZAR 1.8 billion in the 2019 financial year.

So if I turn my attention to our outlook for PGMs. There is growing uncertainty about the global economic growth rate. There are even talks about potential recessions. And this, of course, is fueled by the international trade wars as well as Brexit. But there are factors that have significantly improved the outlook for our primary products. And we believe that this is a strong hedge against this growing uncertainty. The change in emission standards, with increasingly stringent testing requirements as well as the heavier penalties associated with noncompliance, has driven the loadings and auto cat converters beyond expectation, particularly in the Asian and European auto markets. And this has resulted in growing deficits in particularly the palladium and rhodium markets. So these market imbalances have resulted in the conversation of substituting platinum back into gasoline engines to move from the meeting rooms into the R&D labs. And at Implats, we are really proud to be -- to have funded part of this research.

We also still believe in the latent Asian jewelry growth -- demand growth potential, but we do believe that there is a solution required to address the funding constraints that have prevented the PGI from liberating this potential growth in demand. Now for the first time in many years, the conversation has started to turn towards future supply. And we believe that there are a number of factors that constrained the ability of the industry to maintain and grow production from the current project pipelines. And these include, in the first instance, funding; secondly, processing capacity and particularly refining capacity in the Northern Hemisphere; and then thirdly, the lag impact of years of underinvestment by the industry.

So in the last 18 months, we have seen very strong upward revisions for demand expectations, and this has not been matched by similar upward revisions in supply. This is resulting in tightening of, in particular, initially the palladium and rhodium markets and very recently the platinum market as well. And we believe that there is a very strong outlook, a very robust outlook for the PGMs in the medium term.

So given this macro context in the company performance, there are 4 key focus areas for the group for the coming year. The first of them is to ensure business continuity and sustainability. As always, as part of this objective, we have to continue focusing on safety and health improvements, and we have to successfully navigate through the wage negotiations that's currently underway. And then there are 2 main key areas of focus. The one is that we have to manage and mitigate the impact of the Rustenburg restructuring on our employees, the communities as well as the general socioeconomic landscape of the greater Rustenburg area. And then secondly, we have to continue collaborating in a very constructive way with our business leaders in Zimbabwe as well as with the government of Zimbabwe to ensure the stability and sustainability of our business interest in Zimbabwe, on the one hand. And then on the other hand, we have to continue playing a constructive role in the economic development of Zimbabwe, which forms the jurisdiction in which we operate our businesses.

As the second main focus area, we have to continue advancing the Rustenburg strategic restructuring. So on this slide, the evolution of the journey from when we started in 2017 through to 2019 towards the stated end goal of 2022 is displayed in the vertical columns in the slide. And it's very pleasing for us to see that all of the metrics or most of them are tracking in the right direction. So if we do draw horizontal lines, we are going from 12 to 10 to 6 shafts. So it's all tracking in the right direction.

There is one anomaly, and that's the production. So we are in the process of contracting the footprint. We have closed 4 shaft. And before that, we closed 7, 8 shafts. But because of the improved productivity, the efficiency in Rustenburg, Mark and his team has managed to grow production from 651,000 to 688,000. Now you'll be reminded that when we made the original announcement, we guided that production will decline from a design capacity of 750,000 to 520,000 ounces. It appears that if we continue with this part of improvement, that we are in a position that exceeds the 522,000 -- or the 520,000 ounces, even if we center the business around these base assets.

Just before I move away from this, part of the restructuring included improvement of the internal operations. So if we look at the table in the middle, we've got a whole number of performance metrics. And again, I'm very pleased to say that the Rustenburg team has been able to make sure that all of those performance metrics are trending in a positive direction, which bodes very well for the future of Rustenburg.

So if I go to the third quadrant on the bottom right, our next key focus area for the year is to further strengthen the competitiveness of the portfolio. It consists of 2 approaches. The one is to make sure that this continual improvement is rolled out and reinforced across all operations within the portfolio. And then secondly, as a strategic imperative, we want to drive a bias towards low cost, low risk, mechanized mining operations, as we have communicated before. So in this regard, we are in the final stages of concluding the Waterberg definitive feasibility study. We will also be evaluating opportunities in Zimplats for replacement or expansion projects. And in addition to that, we will continue to be on the outlook for any value-accretive opportunity that promotes the strategic imperatives that I have stated.

The last priority for us is to continue ensuring effective capital allocation. So one of the historical strengths of Implats is that it's always continued to invest in stay-in-business capital even during the values in the commodity cycle. And that is not about to change. Because of our very strong financial performance during the past year, we have been able to significantly strengthen the balance sheet. We reduced debt of ZAR 2.2 billion. The team managed to initiate the early conversion of our U.S. dollar bond post the reporting period. We converted from a net debt to a net cash position, and we managed to increase the group headroom liquidity to ZAR 12.24 billion. And so we are very happy with where the balance sheet is moving towards.

The exceptional financial performance has, as a consequence, also accelerated our ambition towards returning shareholder value in the form of either growth opportunities or dare I say to reinitiate dividends or share buybacks in the next 12 to 24 months. And I guess that will be the topic of some questions as we get into the Q&A session.

So to conclude my presentation, I would like to provide guidance for financial year 2020. So if you look at the production guidance, it's very much aligned to the previous guidance and performance achieved during 2019. There are 1 or 2 notable exceptions. So firstly, if I -- if we look at the 2 Zimbabwean operations, Zimplats and Mimosa, the bottom margin of the guidance have been reduced by 5,000 ounces, and that is to account for the increasing risk of power shortages in the country. And secondly, the guidance for Two Rivers have been lowered, and that is to account for the impact of the mining of the split reef. So notwithstanding those 2 changes, if we look at the overall group guidance, we are still guiding that we will be producing around 1.5 million platinum ounces in 2020.

If you look at the group unit cost, that has been guided quite conservatively, even by an acknowledgment. It was based on our expected inflationary increases and also the conversion of the Zimbabwe operations' U.S. dollar-based operating cost that we converted into the South African currency at expected weaker exchange rates. The capital expenditure is set to increase to between ZAR 4.2 billion and ZAR 4.5 billion. And that's as a result of increases in 3 areas. Firstly, at Impala, we will invest an additional ZAR 350 million, and that is primarily because of 3 reasons. The one is additional funding for what we expect to be accelerated growth of 16 and 20 Shaft. And there is ZAR 80 million for infrastructure to ensure continuous compliance to emission standards at our refineries in Springs. And then lastly, it's about ZAR 60 million for a new tailings retreatment facility at our mill processing division in Rustenburg. In addition to that, there is ZAR 150 million additional capital spend at Marula, and that is to fund ZAR 100 million for the construction of the tailings dam and then an additional ZAR 50 million for fleet replacement.

That's the end of my presentation. I would now like to ask the team to come forward and to assist me in addressing questions and answers from the floor and the line. Thank you so much.

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Johan Theron, Impala Platinum Holdings Limited - Group Executive of Corporate Affairs [3]

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While the team comes up to the front here, we've got some roaming mics in the room. I know you're eager to ask questions. If I could just ask that you clearly state your name and question just for the benefit of people listening in on the call, so they also have the benefit of knowing who's the one who's asking the questions. So whoever is closest to a mic.

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Questions and Answers

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Johann Steyn, Citigroup Inc, Research Division - MD and Head of South African Equity Research [1]

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Johann Steyn from Citi. Nico, I'm just looking here at Slide 49, where you gave a little bit more detail about the lease. And it sounds like things have changed a little bit, which we understand, given the fact that prices have changed. I understand that. If I add up the numbers that you've got here, the labor numbers remain the same at 40,000 in 2018 versus '19. That does decrease into 36,000 in FY '20. Is that correct? Or is there a mistake on the slide? Because I know you mentioned that you've gone through a restructuring process in 2019.

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Nicolaas Johannes Muller, Impala Platinum Holdings Limited - CEO & Executive Director [2]

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Yes. So Johann, I think what you'll find is that the number of permanent employees have reduced. And you will find that, that has been supplemented by contractors. So as an example, at 1 Shaft, which we aimed to have closed by April, that has been extended because we believe that we are very close to a commercial solution to continue operating the shaft in an outsourced basis. So we have reduced the number of our own employees and have increased the number of contractors, and that may create a lower reduction in total employees at the least.

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Johann Steyn, Citigroup Inc, Research Division - MD and Head of South African Equity Research [3]

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Okay. And maybe you can just walk us through the new profile. There is a slide in the presentation that you didn't discuss. But just a little bit more detail about how do you see this production profile changing because, first of all, I would assume that in a higher price environment with a lot of these shafts making cash, you've got the flexibility to delay some of these closures, firstly. The second thing that you mentioned is that the long-term 520,000 ounce target can also be higher. Did I understand that correctly? The steady state operation can be a little bit higher.

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Nicolaas Johannes Muller, Impala Platinum Holdings Limited - CEO & Executive Director [4]

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Yes. So -- and I'm going to ask Mark to join in the conversation. So there are 2 reasons. Let us first talk about the change in performance and market conditions. I am often asked to what extent that affects our strategic direction with Rustenburg, and I think it's an important question. So Implats remains resolved that we will create profit-generating assets for all the assets that's part of our portfolio. So to that extent, we remain committed to the original message that we sent when we communicated the restructuring. But we cannot operate blindly. We have to acknowledge changes in either the macroeconomic environment, PGM pricing and performance of the operations. So that has both improved.

So we did come out in our previous results and communicated that we will -- we have got no problem to adopt a more flexible approach to the exact date and closes that we have communicated. So to the extent that we have seen performance improvements and improved price environment at, for instance, 12 Shaft, that is now being converted to a profit-generating shaft. There would be no benefit for the group or for the shareholders if we went and as a consequence of a commitment that was given a couple of years ago that we will actually go and close the shaft. So we are reminded that we don't want to operate in an environment where we change strategic direction as short-term fluctuations in the price environment happens, but I do think that it has provided -- these positive changes has provided us with flexibility.

So the production profile may change, Johann. It's possibly not easy for me to give you definitive answers because we adjust our flexibility as we go along, but it will change because of 2 reasons: one, the fact that Mark is producing from the existing assets more than what we have previously estimated. That's one contributing factor. And the other one is that we had earmarked 1 Shaft for closure. It probably will continue operating in an outsourced arrangement for the next 3 to 4 years. And 12 Shaft may not close down. So what we formally communicated is that we've shifted the formal closing date for 12 Shaft out by a year, and that is also to give us more chance to evaluate the performance of the market and the shaft over the next year, and we've made no revisions to 4 Shaft. So 9 Shaft will terminate because it's got depleted reserves. And so it actually physically cannot continue. 1 Shaft will continue operating for the next 3 or 4 years. 12 Shaft has been moved out by 1 year. So there's 2 contributing factors. One is performing better at existing shafts and the fact that some of the shafts may remain open for longer. And I think that we will adjust the profile in incremental steps as we navigate through this period.

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Johann Steyn, Citigroup Inc, Research Division - MD and Head of South African Equity Research [5]

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On your capital allocation going forward, you mentioned dividends, buybacks growth. One thing that wasn't on that slide is M&A. I know you're busy with the Waterberg project, but there's also always been this right next door to the lease, the option of Royal Bafokeng. And I would assume in an environment like this, a lot of these things become a lot more attractive. How do you guys think about that in terms of weighing a project that might be 5 years to build with likely execution risk and all of those kind of things versus acquisition of something where there might be a significant amount of synergies immediately?

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Nicolaas Johannes Muller, Impala Platinum Holdings Limited - CEO & Executive Director [6]

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I'm delighted that you'd asked that question because I think it is exciting times, and the fact that the company is in a different space than what it was 18 months ago does provide us with a different strength and resolve to evaluate these opportunities. And what I can say is that we have been actively looking at potentially attractive opportunities. And so we do favor opportunities that are cash generative, that are in production above long-lead, high-risk, large capital projects. That would be in our interest. I think the synergies between RBPlat and Implats was conceived even before we listed RBPlat -- before RBPlat got listed in 2010. So I think that will never fall away. And I think what is requirement -- what was required is for the stars align between the shareholders between the 2 companies. I think certainly Implats is positioned far better to offer a value proposition to shareholders in the other side because I think, historically, it would have been difficult to absorb or to converge the assets when you're sitting with an embattled and struggling asset of Implats under lease here. But I think we probably now offer a far better value proposition for a potential synergistic opportunity between those 2 parties.

And so I think that is something that we would continue to be interested in as Implats have been all along. And then there are 1 or 2 other opportunities that the company is also very interested in, which I probably would not be able to disclose today.

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Johan Theron, Impala Platinum Holdings Limited - Group Executive of Corporate Affairs [7]

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Thanks, Johann. And further questions, I just saw a couple of hands here as well. Can we maybe just bring that mic around this side?

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Patrick Mann, BofA Merrill Lynch, Research Division - VP & Research Analyst [8]

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It's Patrick Mann from Bank of America Merrill Lynch. I want to take Nico's bait on the dividend and the balance sheet. Maybe just in terms of -- I understand you've got wage negotiations now. You're doing the Waterberg DFS. I mean longer term, do you have a level at which you'd like the balance sheet to be at, where you'd feel comfortable that that's your free-to-cycle level? Or have we not got to that point yet? Because as you said a little bit earlier, no new shape, it does start to look a little lazy at some point if you're generating a lot of cash.

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Nicolaas Johannes Muller, Impala Platinum Holdings Limited - CEO & Executive Director [9]

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I would let my prudent CFO take all the answer.

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Meroonisha Kerber, Impala Platinum Holdings Limited - CFO & Executive Director [10]

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I think in light of the response that I gave, we need to see sustained cash generation before we get into a position where we would like to pay dividends. It's very important for us once we resume dividends that we don't -- we can continue that on a sustainable basis. The second -- well, for the second half of this calendar year, there are quite a few operational risks that are there. And we'd like to get through that period. I think you also need to bear in mind that if you look at last year, our results were hugely impacted by the buildup of stock. And we have one smelter that's down for rebuild at Zimplats, and we have one that's also going down for a rebuild in Q3. So all of these we factor in. But our ambition is to return to dividend paying on a sustainable basis going forward.

If you ask me what level of debt, we would like our debt to -- our net debt-to-EBITDA to be below 1. So it is a bit conservative, but you can see how highly geared we are to small changes in the macroeconomics. So we would never get to a 0 debt position, I don't think. But we need to be prudent in terms of being able to manage liquidity constraints in the short period.

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Nicolaas Johannes Muller, Impala Platinum Holdings Limited - CEO & Executive Director [11]

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So I just want to add to that. I mean I don't think it's too prudent of -- we should have 0 debt, no debt. I know it's a frequent discussion with them. And I think as a single commodity in a highly volatile market, we are very averse to high debt levels. And I think -- I mean I think Meroonisha and her team have done very well to manage that. But we do have ZAR 599 million of debt over at Implats that we paid at the end of this year and then another circa ZAR 900 million debt in June next year. In addition to that, as of right now, there is the potential funding structure for Waterberg should that come. And then to Johann's point, to the extent that an opportunity presents itself that attracts the company and we want to leverage into that, it will be useful at this particular juncture to have some strength in the balance sheet to allow the company to pursue that.

So I mean I do think that we are approaching the time where a return to dividends is -- will be strongly considered. But -- so these opportunities combined with the wage negotiation and restructuring. We just have to navigate through the next period and make sure that we are correctly positioned for that. And then I think that will allow the path towards a return to dividends.

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Patrick Mann, BofA Merrill Lynch, Research Division - VP & Research Analyst [12]

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And maybe can you update us on the wage negotiations? Just on that point.

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Lee-Ann N. Samuel, Impala Platinum Holdings Limited - Group Executive of People & Executive Director [13]

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I'm sure you'll appreciate that we can't share too much information when it comes to the wage negotiations. But we are in our second month, and we've already had a fair amount of discussions with AMCU. And I must say that it's been very constructive and very cordial. We haven't come to a point where we have sticky issues that cannot be resolved. So we remain cautiously optimistic that we'll be able to conclude very soon. But it all depends on AMCU at the moment given that they are leading up to the national elective conference that takes place at the end of September. But we are confident that we've built really good relations with AMCU. It's very strong at the moment. We've both worked hard at the partnership over the last 18 months. So, so far, so good.

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Nkateko Mathonsi, Investec Bank Limited (SA), Research Division - Resource Analyst [14]

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It's Nkateko from Investec, and congratulations on the good set of numbers. My first question is on the reserves. If it's possible, if you can talk on the reserves or the life of mine on Shaft 12 and Shaft 6, especially if the current basket price is sustainable, how much left can you still get out from Shaft 12 and also Shaft #6? If also you can comment on Shaft #14 and why it has remained unprofitable even at current basket price, that would help. And then my last question is on your long-term outlook on 3E. And I'm asking in relation to the Waterberg project, which virtually does not have any rhodium. It's palladium dominant and less of platinum.

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Gerhard S. Potgieter, Impala Platinum Holdings Limited - COO [15]

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Okay. Let's start with the reason why Shaft 12 is doing so much better. 12 Shaft is a purely UG2 producer. So when the UG2 price goes up, it gets quite a kick from UG2. While 14 Shaft does a mix of UG2 and Merensky. And as a matter -- the quality of the UG2 at 14 Shaft is also not so great. So it's much more difficult for 14 Shaft to just climb out of a hole quickly by increasing palladium and rhodium price. In the 12 Shaft, we've only added 1 year, which means this year and next year, for it to be in production, still based on that performance. And it's based on what the prices do. It's not based on anything else. It can -- if prices remain, it can probably do another 10 to 15 years, depending on whether you do further development or not. 6 Shaft is a different story. 6 Shaft has got 0 reserves left. 6 Shaft is mining UG2 under royalty from the neighbors. So it's purely in existence because of the good UG2 price at this point in time and because of 6 Shaft always having been a very low-cost producer because it's a fairly shallow shaft. But 6 Shaft, in our lease, it has got nothing left to mine. Sorry, what was the next question?

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Mark Munroe, Impala Platinum Holdings Limited - Chief Executive of Impala Rustenburg Operations [16]

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6 Shaft will stay in production for about 3, 4 years.

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Gerhard S. Potgieter, Impala Platinum Holdings Limited - COO [17]

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Yes. Sorry. Yes. So there is not that much left. The second part of your question was about the 3E prices.

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Nkateko Mathonsi, Investec Bank Limited (SA), Research Division - Resource Analyst [18]

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Your long-term outlook on the 3E matters.

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Gerhard S. Potgieter, Impala Platinum Holdings Limited - COO [19]

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Now we all look at each other. We're looking for Sifiso.

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Nicolaas Johannes Muller, Impala Platinum Holdings Limited - CEO & Executive Director [20]

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Of course, we've got expert views, but we got even better views...

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Sifiso Sibiya, Impala Platinum Holdings Limited - Group Executive of Refining & Marketing [21]

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Thank you, Nkateko, for the questions. Sifiso here. In terms of the future outlook, platinum remains muted, but like we expect a reintroduction into gasoline systems to be positive for prices. And in terms of palladium, we expect the market to remain in a deficit, and rhodium will be moving into a deficit in the short to medium term. And this is mainly on the back of China 6 and Part 6, which will require additional rhodium loading for NOx control. So it does look good. But in terms of production and the projects that we currently have, they are mainly focused on like Waterberg on palladium. And in terms of quantities, more revenue can be received in terms of palladium.

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Christopher Nicholson, Morgan Stanley, Research Division - Research Analyst [22]

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It's Chris Nicholson from RMB Morgan Stanley. I have 3 questions, if I can. I'll just go through them maybe one at a time. Could you help me just -- I'll ask each in turn, I think. Just on the Waterberg project, could you maybe just help me understand how the deal works? Because I do know that there's a cost to buy in [to 50 plus 1%]. And then it also -- there was mention of a commitment to $120 million of development funding for the mine. How does that work? If you do buy in that 50.1%, are you then committed to do the -- to start the actual project? Or how does that funding flow under that deal?

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Meroonisha Kerber, Impala Platinum Holdings Limited - CFO & Executive Director [23]

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So in terms of the Waterberg, we have -- first, there's a $30 million that needs to be paid, and that will get us up to, I think, it's 12%. But once that option has been exercised, to be able to earn in to the 50%, we need to spend about ZAR 1.9 billion, ZAR 2 billion, but that would be spent as the project is being executed. So in terms of guidance around how to -- impacting cash flows, the 500 million is likely to be spent in 2020. And then the remaining portion of that will be spent over -- Kirthanya, is it 2 -- depending on the bulk...

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Kirthanya Pillay, Impala Platinum Holdings Limited - Group Executive of Corporate Development [24]

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$130 million as per the capital expenditure profile in the DFS.

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Christopher Nicholson, Morgan Stanley, Research Division - Research Analyst [25]

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Sorry, just to follow up. So does that then commit you to actually doing the project? That's really what I'm asking.

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Nicolaas Johannes Muller, Impala Platinum Holdings Limited - CEO & Executive Director [26]

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Yes. So we originally paid $30 million for the first 15%. Then, on the conclusion of the definitive feasibility study, we are then compelled to make a decision about whether we want to participate, and we will have 90 days, 90 working days. Should we elect to participate, we then firstly acquire an additional 12% of equity through the payment of an additional $34 million, okay? Thereafter, we fund $130 million through a buy-in, through funding of the project.

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Gerhard S. Potgieter, Impala Platinum Holdings Limited - COO [27]

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Just to explain that in breaking up that -- the makeup of the $130 million is 65-65. You pay $65 million of the 50% of your own capital, and the other $65 million is the earn-in of your partner's capital. That's how the $130 million is derived. So the first $130 million of capital is all to be sponsored by us if we decide to carry on with the project, where after each partner then pays us in capital.

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Nicolaas Johannes Muller, Impala Platinum Holdings Limited - CEO & Executive Director [28]

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Chris, and then maybe just to touch the specific question that you're asking. We -- so the first additional $34 million, we -- there's a straight payment for an additional equity. And in that respect, I think you can elect to invest that, notwithstanding whether the project continues or not because that's just an equity purchase. The remaining $130 million is associated with an initiation of the project because that is an earn-in. So to the extent that a decision is made not to immediately initiate the project, there may be a violation, a further investment of $34 million to acquire equity and you may then elect not to invest the remaining $130 million until you are ready to release the project. So that's by election.

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Johan Theron, Impala Platinum Holdings Limited - Group Executive of Corporate Affairs [29]

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I have to say that on the line, we've got a similar question, [in terms of logistics], how far are you with the feasibility study? And are you going to exercise your option?

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Gerhard S. Potgieter, Impala Platinum Holdings Limited - COO [30]

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I'll force it down. We got a [man there] for the second part of the question. But the first part of the question is that the feasibility study is ostensibly finished. It's being written up and packaged. We'll probably receive our official feasibility study documentation in the next 2 weeks. But there are other components to the implementation of a project like this. Outstanding would still be licensing. We still haven't got a mining right, still haven't got an EIA and then all of those other things that need to be in place. Indications are that, that might happen early in 2020. But the feasibility study will be finished having to await then the licensing for the project to start.

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Nicolaas Johannes Muller, Impala Platinum Holdings Limited - CEO & Executive Director [31]

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Maybe I can answer the second part of the question. And I want to start off by saying that we are very excited about the Waterberg project. I mean it's a fantastic orebody. It does lend itself to mechanized bulk, mechanized mining. It probably will end up being low cost as predicted. So we are definitely excited. But then also just a caution, there are a number of stars that have to be aligned in order for the company to elect to proceed with the project and take this equation. We have to be -- we have to have a strong conviction not about the medium-term PGM outlook. We have to have a long-term outlook which supports the project. It does have to meet the company's hurdle rates for greenfields projects. And let's be honest, we don't have, as a mining industry, a global reputation of bringing projects online, on time and within budget. So we have to factor the risk associated with the greenfields long lead significant capital project.

And then internally, we always believe that the company has to be in a great financial position with a strong balance sheet in order to at least fund part of the project from cash. We don't want to fund everything that we do through equity or debt. And I think -- so at least that part is developing in the right area. So will we exercise our option? We will evaluate that according to all of these metrics when we have reviewed the feasibility study. And also on that, there will be a feasibility study. It has been executed by our partner, and we will have to exercise our own views on some of the internal elements of that project. So we may not agree with every single element that is contained [within] so we will [put that] and then exercise an election on whether to continue or not.

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Christopher Nicholson, Morgan Stanley, Research Division - Research Analyst [32]

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So then the second question I wanted to ask was just so 1 Shaft is continuing to be operated and an outsourced contract of energy rights. Do you have a perk on that? Those -- is there a perk on that to IRS? Will you be putting those answers to IRS now? Okay. So we should model that for the next 4 to 5 years as a kind of a third-party material then.

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Nicolaas Johannes Muller, Impala Platinum Holdings Limited - CEO & Executive Director [33]

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Yes. So I'd personally be quite cautious because -- so I might be giving many signals now. So there's a reason why we have gone to the outsourced option, and that is not to expose the company to economic risk associated with the activities on the Shaft. So I think what Mark and the team has done is wonderful. They're giving that asset a lease of life and there's continued employment opportunities. But it is subject to continuing making a contribution, a positive contribution, to the group. So under current conditions and with the improved performance, yes, it will be there. So I probably will do a risk adjustment for 1 Shaft and not account for everything because, I mean, conditions may change. So I would just be really cautious in our model.

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Mark Munroe, Impala Platinum Holdings Limited - Chief Executive of Impala Rustenburg Operations [34]

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I think just to add onto that, Nico, we haven't concluded any agreements yet. So we're still in the process of that. Nothing is agreed and finalized until it is agreed and finalized.

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Christopher Nicholson, Morgan Stanley, Research Division - Research Analyst [35]

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And then one more, one more question. The last one is just on Two Rivers. Your JV partner there has been talking to potentially expanding the concentrator. But I do notice from what you've talked about there, you haven't really flagged up any CapEx or additional ounces. So maybe if you can just take us through kind of what we should expect from Two Rivers.

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Nicolaas Johannes Muller, Impala Platinum Holdings Limited - CEO & Executive Director [36]

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Okay. Sorry, can I just go before you go? Because I mean you are the expert. He's just won an award [and whatever] but -- so it has not been flagged because the capital for an expanded -- a plant expansion lies beyond the guidance of financial year 2020. They're in the process of doing a tailings dam extension. And that has -- and then there will be a feasibility study on the potential plant expansion. And so that will probably be only concluded in the latter part of the financial year 2020. And on the back end of that, we will have clarity on capital and ounces. Sorry, I didn't want to speak...

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Gerhard S. Potgieter, Impala Platinum Holdings Limited - COO [37]

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Now that he's stolen all my thunder, I'll try and -- I think there's 2 things to sort of pick up from the results that us and our partners have been giving on Two Rivers for. It's not the first year that we've been telling the market about the split reef. But we thought that it will fix itself over time if we develop more and get a bigger footprint and so forth. I think the realization has now been -- that the split reef is there to stay. And you've got to align the mine to mining the split reef. And the solution for that is to increase the plant capacity and take a lower grade through. We discussed that the feasibility study has been done. Unfortunately, we need -- to expand the plant capacity, you need more tailings dam capacity, which Two Rivers doesn't have. But it's currently building a new tailings dam. So even spending capital to fix this can only, as Nico said, happen the year after this coming year. Otherwise, you will have a plant expansion, nowhere to put the materials. So yes, our partners are leading the process. We're very much part of it, but we will probably be more accurate on our reporting once that feasibility study and the timing of it has been completed.

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Johan Theron, Impala Platinum Holdings Limited - Group Executive of Corporate Affairs [38]

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Just conscious of time, so I just want to check for questions on the line, and we'll come back to the room here as well. Just if there's any questions on the line, now is the time to queue. I'll allow one more question here while people queue in -- on the line.

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Arnold Van Graan, Nedbank Capital, Research Division - Analyst [39]

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It's Arnold Van Graan from Nedbank. My question relates to 16 and 20 Shaft. You continue to face operational challenges there. So my question is, will you -- are you still on track to achieve your efficiencies that you initially set out to achieve there because that will obviously have an impact on the longer-term cost?

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Mark Munroe, Impala Platinum Holdings Limited - Chief Executive of Impala Rustenburg Operations [40]

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The productivities and efficiencies have actually been doing very well. That is not the challenge of 16 or 20. They are there and thereabouts. There are still some improvement that we do expect to reach the final efficiencies as we continue, as face length flexibility improves. The challenge that we've had on both of those shafts has been the generation of face length. As we mentioned, 20 Shaft, the actual capital construction is completed. So now it is just about creating face length. At 16 Shaft, we are still working on some ore prices, and there is still some capital work to be done in terms of more [changeover offers] and I said the ore prices. So I think -- I mean we are also focused on face lengths. So really, our focus has been, is and will continue to be on generating face length as we ramp up that business. And hence, I remember saying a year ago, we're going to ease off on sending crews there and ensure that we can actually ramp that up.

That's something -- with having the flexibility around 1 Shaft or extension of 12 Shaft, yes, we definitely have more options available on how to manage the ramp-up of 16 and 20. But in short, yes, we will get those efficiencies and productivities.

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Arnold Van Graan, Nedbank Capital, Research Division - Analyst [41]

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So I have a follow-up on this. So I mean there's obviously a lot of reasons that led to the challenges that you've had now. And I understand, once you get your face lengths, you'll have the flexibility. But won't some of the issues that have impacted you up to now impact you when it comes to mining these additional faces? So I'm basically saying the same challenges you faced in building this mine, you might face in mining this orebody.

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Mark Munroe, Impala Platinum Holdings Limited - Chief Executive of Impala Rustenburg Operations [42]

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Yes. You're 100% correct. Specifically, that's at 20 Shaft. So I think the orebody has proved to be slightly more challenging than what was originally anticipated. And yes, we believe that can be offset by having more flexible face length, more face length available to give you that flexibility to maintain your production efficiencies. That extra development does come at an extra cost that we are now investing and putting in. So we are developing more and creating that flexibility. And then there's a question of maintaining the net extraction at 20 Shaft is actually in line with what was originally anticipated. So you don't lose any orebody necessarily.

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Johan Theron, Impala Platinum Holdings Limited - Group Executive of Corporate Affairs [43]

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I see we've got one question on the line from Dominic O'Kane. So maybe we can just hear from Dominic.

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Dominic O'Kane, JP Morgan Chase & Co, Research Division - Analyst [44]

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Just a quick one. Thank you very much for the update around the progress of the restructuring. But just interested, given the potential to run these assets for longer in the current pricing environment, are you considering at all entering into hedging to support longer positive cash flow for the Impala Group?

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Meroonisha Kerber, Impala Platinum Holdings Limited - CFO & Executive Director [45]

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So in terms of -- Implats has typically not -- it's not been part of our policy to hedge. If you look at palladium specifically, you'll see the market is in significant backwardation. So to agree to take a hedge out on that is -- given the current spot prices, is a little bit -- it is a bit difficult to justify. In terms of protecting the Rustenburg operations, definitely, on the exchange rate side, we do look at it. So on the commodity price, typically, we've not looked to hedge those prices. But on the rand-dollar, because of the sensitivity of Impala to the rand basket price, in the previous financial year, we have taken out certain -- some foreign exchange collars, too. And really, the intention there was to give Rustenburg sort of a cushion on the strengthening of the rand. So at this stage, we're comfortable with that level of protection. And at this stage, we're not contemplating taking out any commodity hedging.

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Johan Theron, Impala Platinum Holdings Limited - Group Executive of Corporate Affairs [46]

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Thanks, Dominic. There's nothing on the line, so we can take a couple more in. [Renee,] do you have a mic? You've got a mic, so go ahead.

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Unidentified Analyst, [47]

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It's [Liram Renee] from HSBC. My first question is an extension of Johann's question, especially for you, Nico, having been involved in developing an asset in your previous role. How do you sort of weigh up developing versus buying in the current market given the prices at the moment? And then my second question is, what are your parameters that you use when considering investment opportunities in terms of returns? Or do you have certain prices at which you need to achieve certain returns?

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Nicolaas Johannes Muller, Impala Platinum Holdings Limited - CEO & Executive Director [48]

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Look, I'll answer this in 2 bits. And maybe we can just give the mic to Kirthanya. She's our business development executive. She can add on the financial part, the criteria. So I am a strong believer in acquisitions of cash-generating assets other than building long lead high-risk projects. If we enter into projects such as those, like Waterberg, we have to be really confident about the design, the schedule, the costs. So they have typically risks associated with them. So I would feel a lot more comfortable if we buy into an asset that is very far advanced or in a cash-generating mode. But we are -- and this starts bridging the question to the second one, like what are the criteria that we apply to evaluate opportunities. There are a number of financial metrics and hurdle rates and so forth that Kirthanya or Meroonisha can talk to.

But first and foremost, it has to meet the strategic imperative of the company in terms of the kind of assets that we are looking at. We strongly favor, as I've said before, shallower, mechanizable, low-risk mining assets. That's the kind of company that we would like to be and that we will be pursuing. So in terms of financial metrics and hurdle rates, I'm not sure if you want to talk about it. And just before they give the financial answer, I am personally much more in favor of projects regardless of IRR, NPV and so on that have got a really, really short payback period. I am very risk averse to large funding requirements with extended payback periods. I favor something that will get into the money fairly quickly. That's just a personal attack maybe with the company financial position.

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Kirthanya Pillay, Impala Platinum Holdings Limited - Group Executive of Corporate Development [49]

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[Liram], maybe just to add to that, I think we are working on strengthening our capital allocation policy in light of Waterberg, how we'd look at a development project which is 5 to 6 years out in terms of cash flow to Nico's point around payback versus looking at something that could generate cash immediately, so we are looking at -- well, what we use as the basic metrics. We have a defined WACC internal rate for our current operations. We put a premium on that for the development projects, typical -- or specific to whether the project is here, if it's in Zimbabwe, what's the ramp-up, et cetera. We'd look at your IRR of the project, including the funding solutions and how that would impact the IRR to shareholders. I think we're quite sensitive on that point. And then, importantly, the payback period, making sure that if you are looking at a development project, there's obviously going to be a longer payback period, what does that look like and what's that -- how does that fit into our views on the market prices going forward? And if we had to compare that to our cash generating asset, obviously, we'd want a shorter payback period that gets us our money back over a -- or has fast, stronger return if you are getting a cash flow up immediately.

I think overarching to all of that is obviously that it meets our strategic objectives or fits in with our strategic objectives of the type of portfolio we want to build.

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Nicolaas Johannes Muller, Impala Platinum Holdings Limited - CEO & Executive Director [50]

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What I have seen is that we have a very small team, so we can make any project work basically. If the financial returns don't work out, we just improve our outlook on the PGMs. And then it meets all the potential financial metrics. And we've learned from the [best PGM players] in the mining industry.

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Johan Theron, Impala Platinum Holdings Limited - Group Executive of Corporate Affairs [51]

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We must be approaching the hour mark, I can sense that. But not you actually -- I end up with (inaudible), you've got a follow-up.

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Unidentified Analyst, [52]

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Just in terms of your price outlook, is it fair to just look at your reserve assumptions and assume that that's what you're applying? Or would you change or vary those when you're assessing investments?

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Nicolaas Johannes Muller, Impala Platinum Holdings Limited - CEO & Executive Director [53]

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Sorry, I'm not sure that I follow...

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Unidentified Analyst, [54]

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Your reserve price assumptions. Should we assume that, that is your long-term outlook on commodity prices? Or would you apply different prices for different projects?

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Nicolaas Johannes Muller, Impala Platinum Holdings Limited - CEO & Executive Director [55]

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I think we -- I mentioned that we would vary our price assumptions depending on the project that we look at. We have a house view on each of the metals and the exchange rate, and that's what we apply as we are looking at the projects that we are evaluating. And I think your reflection on looking at reserves, I think that would be -- if you want to follow that approach, it would be probably the best approach to get an internal view on pricing.

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Johan Theron, Impala Platinum Holdings Limited - Group Executive of Corporate Affairs [56]

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René?

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René Carlo Hochreiter, NOAH Capital Markets (Pty) Ltd - Mining Analyst [57]

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Nico, it's René from NOAH. Well done again on your results. Just a comment really, maybe a personal question. The comment is if you paid out 100% of your free cash flow in dividends, my estimate is you could have paid out maybe ZAR 7 or ZAR 8 per share this year. It's just a comment. Secondly...

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Johan Theron, Impala Platinum Holdings Limited - Group Executive of Corporate Affairs [58]

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As a shareholder or a nonshareholder?

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René Carlo Hochreiter, NOAH Capital Markets (Pty) Ltd - Mining Analyst [59]

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Secondly, what -- a personal question, Nico, and we can talk about it later if you don't want to answer now. But what sort of legacy would you like to leave behind for Impala? You've been in the job now for 2 years. Would you like to be known as a fixer upper of Implats? Or would you like to be known as maybe a grower of Implats into one of the biggest platinum producers in the world?

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Nicolaas Johannes Muller, Impala Platinum Holdings Limited - CEO & Executive Director [60]

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So I mean that is a very personalized question. I think the ambition that we have for the company is not really driven by size. I think it will be really attractive if we could leave a company that has got the ability to sustain very attractive profits regarding of prices, that is diversified in terms of value chain, that -- I think we have some challenges to grow into that position, and so it would be to have a company that does not do damage to the health and safety of employees, environmental impacts, that has a legacy of responsible off-rate energies in whatever jurisdictions it operates and that is robust and can withstand economic cycles and a [place] of a wide enough front to have a diversified strength as a company. And if size is part of it, that's great, but that's not essentially what I believe to be the only recipe for success in this environment.

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Johan Theron, Impala Platinum Holdings Limited - Group Executive of Corporate Affairs [61]

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I was waiting for him to use value over volume, but he resisted. I think we've got time for one more question. I see there's a question there.

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Steven Friedman, Renaissance Capital, Research Division - Associate [62]

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Nico, it's Steve Friedman from Renaissance Capital. Just another question on the M&A side, what's your view on disposals at this point in the cycle, specifically now around Marula and Two Rivers, where you've got a JV partner that, as you said, looking to potentially expand? Would you look at disposals of your -- some of your businesses and then look in deploying that capital elsewhere?

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Nicolaas Johannes Muller, Impala Platinum Holdings Limited - CEO & Executive Director [63]

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Yes. So I think Implats is always open for business. And it's quite strange that when we did try to sell Marula a couple of years ago, we had no interested parties. And I think -- so we have seen a return of interest in parts of the assets there. There has been an expression of interest at Marula specifically. There's been an expression of interest at Afplats. And I think to the extent that assets have not been core for long term, so to the extent that they are not low cost, low risk, mechanized operations, I think you'll find a more receptive audience. And I'm not saying that any of our assets, in particular, do not match that. That, for instance, for us to -- a disposal for a Zimplats or a Two Rivers would be harder than to consider the disposal of an Afplats, as an example [if you compare those 2]. So yes, we are open to business, both from an acquisition point of view as well as a disposal point of view.

You -- sorry, could I ask one question? It's actually not a question. I mean you've got -- so I think the unsung hero today -- because we've given a lot of praise rightly so to Rustenburg but I think our leadership in Zimbabwe has done a tremendous job in navigating through the challenges of the country. And Alex couldn't join us today because, again, he is participating with the government of his country in Australia, representing them to create some investment interest. But we got Stanley in his place. And I really want to just ask Stanley, can you say 2 words about the challenges that you have faced and what has created the success so far in your ability to create stability and continuity for Zimplats?

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Stanley Segula, Zimplats Holdings Limited - MD [64]

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Okay. Thank you, Mr. Muller. But I think we all know that the Zimbabwean landscape is a very challenging landscape, but the company have managed to remain profitable and add value to the group. I think the main thing I need to mention also is, as a company, Zimplats is a respected company in terms of -- on the outlook on the Zimbabwean landscape because of the significant contribution that it does to the economy. If I look [all that's discussed, we can't proceed] even as a taxpayer. But also it's part of the strategy as a company approved by the Board. We have also partnered government in a number of areas, especially on driving the economy, trying to assist the government to turn around the economy. And one of the areas which we are really moving together with the government is on industrialization projects, which [we have to swing] and there were a couple of them. We are looking at probably setting up a significantly big livestock and dairy project in the company -- in the country, obviously, in partnership with other stakeholders. We have also gone a long way in partnering government in terms of establishing or buttressing power supply or power utility infrastructures.

So because of the contribution that the company is making in terms of helping government turn around the economy, we are normally viewed in good light, especially when we dialogue and we engage with the authorities to such an extent that despite some of the policies, whether it's financial and other policies which are tough on paper, but because of the status which we have as a company, we normally would get a good ear from the authorities, which is quite positive for us. And over and above that, also the other challenge is power. I'm sure we've had -- we talked about power in Zimbabwe despite the desperate situation. Most of our power should come from Kariba which, at full capacity, should generate probably 2/3 of the power, about 1,050 megawatts. But the situation is quite dire at the moment. Kariba dam is almost running empty, and they stock that probably by November. We might stop generating from there.

But also as a company, because of our capacity to import and pay for power in U.S. dollars, that has really gone a long way in making us survive these challenges. And the good news is, despite all you have heard in terms of load shedding and the likes, as a company, we have not experienced any of that, which is quite positive. But also, we need to be more proactive because you can stand out as the only probably prevailing company in the middle of poverty, and we need to be cognizant of that. In terms of managing the power supply risk, we are also looking at going solar. Our Board has given us a green light on that. If DFS was finalized and we are [waiting] with a partner, with the potential to generate around 160 megawatts which, during the day, we can also feed back into the grid, which will be well received and positive even for the authorities.

So despite the difficult landscape, I think at Zimplats, we stand out as the solid corporate [fixer] whom government always look up to our system, managed the economy out of the quite [minute] initiatives at the moment.

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Johan Theron, Impala Platinum Holdings Limited - Group Executive of Corporate Affairs [65]

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Thank you very much. Well, that brings us to the end of our presentation and question-and-answer time. And we have some snacks on the outside. The team is available. So there's a further opportunity for the people here in Joburg to ask some further questions on the outside. For the people on the line, thanks for joining us. We will be on the road over the next couple of weeks. I'm sure we'll meet up with you as well. And then I'm sure there will be further questions. So thank you very much. That then concludes our event here.