Anpario Regulatory News (ANP)

11 Feb 2008 07:00

Anglo Platinum Limited11 February 2008 Anglo Platinum Limited and its Subsidiaries("Anglo Platinum") (Incorporated in the Republic of South Africa) (Registrationnumber 1946/022452/06) JSE Codes: AMS; AMSP ISIN: ZAE000013181; ZAE000054474A member of the Anglo American plc group MAIN FEATURES• Rand basket price per Pt oz increased by 31,2%• Refined Pt production of 2,47 million oz• Headline earnings of R12.3 billion ABRIDGED FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2007 CONSOLIDATED INCOME STATEMENT Audited Audited Year ended Year ended 31 December % 31 DecemberR millions 2007 Change 2006------------------------------------------------------------------------------GROSS SALES REVENUE 46 961 19,3 39 356 ---------- ----------Mined 40 749 34 979Purchased metals 6 212 4 377 ---------- ----------Commissions paid (345) (201) ---------- ----------NET SALES REVENUE 46 616 19,1 39 155COST OF SALES (27 519) (22,1) (22 531) ---------- ---------- GROSS PROFIT ON METAL SALES 19 097 16 624 ---------- ----------Mined 18 470 16 284Purchased metals 627 340 ---------- ----------Other net expenditure (119) (130)Market development and promotionalexpenditure (324) (236) ---------- ----------OPERATING PROFIT 18 654 16 258Interest expensed (182) (154)Interest received 403 180Income from associates 448 430 ---------- ----------PROFIT BEFORE TAXATION 19 323 16 714Taxation (6 656) (4 782) ---------- ----------PROFIT FOR THE YEAR 12 667 6,1 11 932 ---------- ---------- Attributable to: ---------- ----------Equity holders of the company 12 330 11 917Minority shareholders' interest 337 15------------------------------------------------------------------------------ RECONCILIATION BETWEEN NET PROFIT AND HEADLINE EARNINGSNet profit 12 330 11 917Less: Deemed dividend to preference shareholders (16) - Less:Declared and undeclared cumulativepreference share dividends and related STC (15) (237) ---------- ----------Basic earnings attributable to ordinary shareholders 12 299 5,3 11 680Adjustments (after tax where applicable):Profit on disposal of conversion rights - (22)Cost on disposal of 15% interest in Union section - 105Profit on disposal and scrapping of property, plant and equipment (5) (7) ---------- ----------Headline earnings attributable to ordinary shareholders 12 294 11 756Add:Declared and undeclared cumulativepreference share dividends and related STC 15 237Add: Deemed dividends to preference shareholders 16 - ---------- ----------Headline earnings 12 325 2,8 11 993 ---------- ---------- Number of ordinary shares in issue (millions) 236,4 229,6 Weighted average number of ordinary shares in issue (millions) 234,7 218,8Attributable earnings per ordinary share (cents) - Basic 5 241 5 339- Diluted 5 203 5 317Attributable headline earnings per ordinary share (cents) - Headline 5 239 5 374- Diluted 5 201 5 352Dividends per ordinary share (cents) 5 200 5 300 ---------- ----------- Interim 2 900 1 400- Final 2 300* 3 900 ---------- ----------Dividends per preference share (cents) 638 638Dividend cover per ordinary share (headline earnings) 1,0 1,0------------------------------------------------------------------------------*Proposed ordinary dividend GROUP STATEMENT OF RECOGNISED INCOME AND EXPENSE Audited Audited Year ended Year ended 31 December 31 DecemberR millions 2007 2006------------------------------------------------------------------------------INCOME AND EXPENSE RECOGNISED DIRECTLY IN THE INCOME STATEMENT PROFIT AFTER TAXATION 12 667 11 932Less: Taxation recognised directly in equity - (79) --------- --------- 12 667 11 853 --------- ---------Attributable to:Equity holders of the company 12 330 11 838Minority shareholders interest 337 15 --------- --------- 12 667 11 853 --------- --------- CONSOLIDATED BALANCE SHEET Audited Audited Year ended Year ended 31 December 31 DecemberR millions 2007 2006------------------------------------------------------------------------------ASSETSNON-CURRENT ASSETS 36 964 31 137 --------- ---------Property, plant and equipment 20 697 20 872Capital work-in-progress 15 561 9 128Investment in associates 391 944Investments held by environmental trusts 120 -Other financial assets 116 110Other non-current assets 79 83 --------- ---------CURRENT ASSETS 14 832 15 176 --------- ---------Inventories 6 370 5 300Accounts receivable 4 246 4 605Other assets 134 278Derivative financial assets 3 5Cash and cash equivalents 4 079 4 988 --------- ---------Assets classified as held for sale 2 254 - --------- ---------TOTAL ASSETS 54 050 46 313 --------- --------- EQUITY AND LIABILITIESSHARE CAPITAL AND RESERVESShare capital and premium 9 319 5 591Accumulated profits 18 988 22 590Minority shareholders' interest 466 511 --------- ---------SHAREHOLDERS' EQUITY 28 773 28 692NON-CURRENT LIABILITIES 10 108 8 466 --------- ---------Deferred taxation 8 748 7 168 --------- ---------Environmental obligations 840 530Employees' service benefit obligations 30 293Obligations due under finance leases 490 475 --------- ---------CURRENT LIABILITIES 14 012 9 155 --------- ---------Interest-bearing borrowings 7 465 100Accounts payable 3 508 4 173Other liabilities 2 212 1 856Share-based payment provision 474 318Taxation 353 2 708 --------- ---------Liabilities directly associated with assetsclassified as held for sale 1 157 - --------- ---------TOTAL EQUITY AND LIABILITIES 54 050 46 313 --------- --------- CONSOLIDATED CASH FLOW STATEMENT Audited Audited as at as at 31 December 31 DecemberR millions 2007 2006------------------------------------------------------------------------------CASH FLOWS FROM OPERATING ACTIVITIESCash from operations 20 665 18 405Interest received/(paid) (net of interestcapitalised) 5 (125)Taxation paid (6 821) (1 274) --------- ---------Net cash from operating activities 13 849 17 006 --------- ---------CASH FLOWS USED IN INVESTING ACTIVITIESPurchase of property, plant and equipment(includes interest capitalised) (10 653) (6 525)Proceeds from sale of plant and equipment 81 30Investment in associates (11) (34)Proceeds from sale of conversion rights - 77Net proceeds on sale of 15% interest in UnionSection - 385(Increase)/decrease in investments held byenvironmental trusts (120) 11Interest received 379 165Growth in environmental trusts 24 15Dividends received 279 148Advances made - (70) --------- ---------Net cash used in investing activities (10 021) (5 798) --------- ---------CASH FLOWS USED IN FINANCING ACTIVITIESProceeds from the issue of ordinary share capital 100 169Proceeds/(repayment) of interest-bearingborrowings 7 575 (3 705)Ordinary and preference dividends paid (12 276) (4 851)Dividends paid to minorities (382) - --------- ---------Net cash used in financing activities (4 983) (8 387) --------- ---------Net (decrease)/increase in cash and cashequivalents (1 155) 2 821Cash and cash equivalents at beginning of year 4 988 2 167Transfer to assets held for sale 246 - --------- ---------Cash and cash equivalents at end of year 4 079 4 988 --------- ---------MOVEMENT IN NET (DEBT)/CASH**Net cash/(debt) at beginning of year 4 413 (2 293)Net cash from operating activities 13 849 17 006Net cash used in investing activities (10 021) (5 798)Other (12 117) (4 502) --------- ---------Net (debt)/cash at end of year (3 876) 4 413 --------- --------- ** Net debt comprises interest-bearing liabilities and obligations under financeleases net of cash and cash equivalents. NOTES TO THE ABRIDGED RESULTS 1. This abridged report complies with International Accounting Standard 34 -Interim Financial Reporting and South African Statement of Generally AcceptedAccounting Practice, AC127, with the same title as well as with Schedule 4 ofthe South African Companies Act and the disclosure requirements of the JSELimited's Listings Requirements. 2. The abridged report has been prepared using accounting policies that complywith South African Statements of Generally Accepted Accounting Practice andInternational Financial Reporting Standards. The accounting policies areconsistent with those applied in the financial statements for the year end 31December 2006, except for the following changes: • Adoption of IFRS 7 - Financial Instruments: Disclosure;• Adoption of the amendment of IAS 23 - Borrowing Costs;• Change in method of valuation of stores and materials from a weighted average basis to a First-in-First-Out basis; and• Change the measurement of the costs and liability arising on the leasing of metal. For full details of the impact of these changes, please refer to the annualreport. ------------------------------------------------------------------------------ Year ended Year ended 31 December 31 DecemberR millions 2007 2006------------------------------------------------------------------------------ 3. CommitmentsMining and process property, plant and equipmentContracted for 4 224 4 866Not yet contracted for 13 085 9 563 --------- ---------Authorised by the directors 17 309 14 429 --------- ---------OtherOperating lease rentals - buildings 575 603 --------- ---------Due within one year 47 44Due within two to five years 213 197More than five years 315 362 --------- ---------Information Technology Service Providers 569 165 --------- ---------Due within one year 147 74Due within two to five years 411 91More than five years 11 - --------- --------- These commitments will be funded from existing cash resources, future operatingcash flows, borrowings and any other funding strategies embarked on by theGroup.------------------------------------------------------------------------------ 4. CONTINGENT LIABILITIES Letters of comfort have been issued to financial institutions to cover certainbanking facilities. There are no encumbrances of Group assets, other than thehouses held under finance leases by the Group. Aquarius Platinum (South Africa) (Proprietary) Limited holds a put option to puttheir interest in the Kroondal pooling on sharing arrangement to the Group inthe case of termination of that relationship. The probability of the optionbeing exercised is considered remote. The amount of such an obligation isdependant on a discounted cash flow valuation of their interest at that point intime. The Group is the subject of various claims, which are individually immaterial.The expected outcomes of these individual claims are varied, but on aprobability weighting the amount is estimated at R70 million (2006: R73million). The Group has in the case of some of its mines provided the Department ofMinerals and Energy with guarantees that cover the difference between closurecost and amounts held in the environmental trusts. At 31 December 2007 theseguarantees amounted to R1 939 million (2006: R159 million). The Group has provided Lexshell 36 General Trading (Pty) Ltd (a company owned bythe Bakgatla-Ba-Kgafela traditional community) with a facility that covers theirdebt repayments should that company not be able to meet the repayments. Thefacility is limited to Union Section's cash flows and a call on this facility isconsidered a remote possibility. Rustenburg Platinum Mines Limited ("RPM") has granted a R2 billion loan facilityto Royal Bafokeng Resources (Pty) Ltd ("RBR") for the purpose of funding itscontributions to the BRPM Joint Venture. The loan is repayable in full on 11August 2012. The RBR has ceded and pledged its interest in the BRPM JointVenture to RPM as security for the loan. RPM also has the right to register anotarial bond and a mortgage bond over RBR's undivided share of the assets ofthe BRPM Joint Venture. 5. CHANGES IN ACCOUNTING ESTIMATE - Metal inventories During the year, the Group changed its estimate of the quantities of inventorybased on the outcome of a physical count of in process metals. The Group runs atheoretical metal inventory system based on inputs, the results of previousphysical counts and outputs. Due to the nature of in process inventories beingcontained in weirs, pipes and other vessels, physical counts only take placeonce per annum. This change in estimate has had the effect of increasing the value of inventorydisclosed in the financial statements by R148 million (2006: R102 million). This results in the recognition of an after-tax gain of R105 million (2006: R72 million). The amount of the effect in future periods has not been disclosed becauseestimation is impracticable. 6. COMPARATIVE FIGURES The interest received and interest paid figures for 2006 have been restated byR39 million each due to the incorrect elimination of intergroup interest in theprior year. Consequently, interest received and interest paid are now reflectedat R165 million and R196 million respectively. Amounts in cash investments held in the environmental trusts of R264 million in2006 that meet the definition of cash and cash equivalents have beenreclassified from non-current assets to cash and cash equivalents. The cash flowstatement has been amended accordingly. 7. POST BALANCE SHEET EVENTS Formation and Approval of Group Employee Share Option Scheme Anglo Platinum is finalising its plans for a broad based share scheme foremployees who do not currently participate in any other share scheme. The schemewill be presented to shareholders for approval at a general meeting to be heldin this financial year. A circular containing full details of the proposedtransaction, including pro-forma financial effects, will be posted toshareholders once the terms are finalised. Proposed Revision to Conversion Price As the ordinary dividend cover in respect of the 2007 dividends is less than 1.4times, it is necessary to adjust the conversion price to be used whenconvertible preference shares are converted into ordinary shares. Currently theconversion price is R284.24 or 35.18154 ordinary shares for each 100 convertiblepreference shares converted. The revised ratio will be based on the volumeweighted average traded price of Anglo Platinum ordinary shares on the JSELimited for the five business days ended Friday, 7 March 2008 and will bepublished on SENS and in the press once this has been determined. 8. CORPORATE GOVERNANCE The Board is of the view that the Company and its subsidiaries are compliantwith the recommendations as set out in the Code of Corporate Practices andConduct contained in King II. 9. AUDIT OPINION The auditors, Deloitte & Touche, have issued their opinion on the Group'sfinancial statements for the year ended 31 December 2007. The audit wasconducted in accordance with International Standards on Auditing. They haveissued an unqualified audit opinion. A copy of their audit report is availablefor inspection at the Company's registered office. These abridged financialstatements have been derived from the Group financial statements and areconsistent in all material respects, with the Group financial statements. COMMENTARY 1. FINANCIAL RESULTS Anglo Platinum achieved record headline earnings in 2007. Factors contributingto the increase were higher US dollar prices realised on metals sold and a rand/ US dollar exchange rate that was on average weaker during 2007. This wasoffset by lower sales volumes on the back of reduced production from miningoperations. Headline earnings and headline earnings attributable to ordinary shareholdersincreased to R12.3 billion with headline earnings per ordinary share decreasing3% to 5,239 cents as a result of an increased weighted average number of sharesin issue in 2007. A final dividend of 2,300 cents per ordinary share has beendeclared, maintaining a dividend cover ratio of 1. Gross sales revenue increased by R7.61 billion to R47.0 billion. The increasewas the result of higher US dollar metal prices achieved on all metals sold,contributing R8.28 billion of the increase and a weaker average rand / US dollarexchange rate of R7.04, compared to R6.82 achieved in 2006, increasing revenueby R1.59 billion. This was offset by lower volumes of metals sold, which reducedrevenue by R2.26 billion. Refined platinum sales for the year ended 31 December2007 amounted to 2.48 million ounces. The average prices achieved on platinum, palladium and nickel sales for the yearwere US$1,302 per ounce, US$355 per ounce and US$17.04 per pound respectively.The average price achieved on rhodium sales for the year was US$4,344 per ounceaffected by existing long term contractual arrangements with some customers tosupport and develop the rhodium market. Anglo Platinum is at an advanced stageof negotiations to achieve mutual recognition with its relevant customers ofstructural changes to the rhodium market affecting the US dollar price of themetal. The objective of the negotiations is to move towards a contractual pricefor rhodium that is market related. Cost of sales increased by R4.99 billion to R27.5 billion, because: • the cost of purchases of metal increased by 40% to R5.54 billion. This was due to higher prices paid for metals, contributing R1.05 billion of the increase, and an increase in the volume of metals purchased from the Marikana and Mototolo joint ventures, contributing a further R541 million.• cash mining, smelting and refining costs rose 22% to R18.5 billion with cash operating cost per equivalent refined platinum ounce rising by 34% to R8,181. The increase in unit costs is attributable to reduced production, substantial inflationary pressures including above inflation increases in wages, diesel, tyres, chemicals and steel grinding media, costs associated with the safety intervention, increased support costs and ramp-up costs at Mototolo and Marikana. In addition, a higher labour complement to support a planned increase in production at mining operations in 2007 further contributed to the increase in unit costs.• depreciation increased by 14% or R336 million mainly as a result of the capital expenditure programme and increased utilisation of new operating assets. During 2007 Anglo Platinum revised its depreciation method for capitalised shaft and development costs which are now depreciated on a unit of production basis.• the value of metals in inventory increased by R957 million during 2007. Despite a net volume decrease in pipeline stock, the value of metal in stock rose as a result of the increase in the cost at which metal inventories are valued. The Group's taxation charge increased to R6.66 billion. Higher dividends paid in2007 resulted in a higher STC charge in respect of the final 2006 dividend andthe interim dividend for 2007. The increased STC resulted in an effective taxrate of 34.4% compared to 28.6% in 2006. The Group's net debt position at 31 December 2007 amounted to R3.88 billion,compared to the R4.41 billion net cash position at the end of 2006 and is inline with Anglo Platinum's intention of introducing gearing onto its balancesheet. 2. SAFETY Anglo Platinum remains committed to the principle of zero harm and hasimplemented a major shift in its approach to safety. The Board has implementedsteps to align Anglo Platinum's approach to employee safety to that adopted bythe Anglo American Group. The creation of a culture in which safety standards are paramount, witheffective learning from safety incidents to ensure 'no repeats', underlies thisnew approach. This includes a visible, felt commitment from leadership toeliminate harm and increase capacity to manage safety risks wherever they mayoccur. Safety as the overriding priority, clarity of personal and collectiveresponsibilities and rigid and consistent application of standards lie at theheart of the new approach. This approach to safety is being implemented at allAnglo Platinum operations. A significant deterioration in safety performance occurred in the first half of2007 with 18 fatalities, 12 of which occurred at the Rustenburg mine. A decisionwas taken to suspend production at all Rustenburg shafts on a staggered basis,with the aim of: • ensuring that every employee fully understands the principles and accountability underlying all safety standards initiatives;• implementing programmes to identify and address any factors that may have contributed to the deterioration; and• recognising that safety is the overriding priority. The intervention provided invaluable insight into all operational areas andfurther improved the implementation of the new approach to safety. Following the temporary closure of Rustenburg, senior management and otherrelevant stakeholders developed a comprehensive enhanced safety improvement planfor the Group, which is being implemented over the next three years. In the second half of 2007, following the initial intervention, there was amarked improvement in safety performance with the lost time injury frequencyrate at managed operations reducing to 1.71 compared to 2.37 in the first halfof the year. Regrettably, 25 fatalities occurred at Anglo Platinum's managed operations in2007. 3. OPERATIONS Equivalent refined platinum production (equivalent ounces are mined ouncesconverted to expected refined ounces) from the mines managed by Anglo Platinumand its joint venture partners for 2007 decreased by 167,200 ounces or 6% whencompared to 2006. The intervention aimed at achieving a significant improvementin employee safety as well as reduced production efficiency in 2007 as a resultof a shortage of skilled labour, competition for labour at all levels, strikeaction at joint ventures, the unsettled labour situation associated with wagenegotiations and lower grades at Potgietersrust contributed to the decrease inproduction. In addition, UG2 as a percentage of total tons milled has increasedto 59% in 2007 further reducing grades across all underground operations. Refined platinum production for 2007 decreased by 12% to 2.47 million ounces.The decrease is attributed to the reduced production experienced in 2007 as wellas the once-off release of 112,000 ounces from the process pipeline in 2006attributable to the effect of the shutdown of the Polokwane smelter in late2005. Mining operations Increased production volumes were recorded at: • Mototolo: The joint venture delivered its first production in the last quarter of 2006. In 2007 the operation contributed 95,200 ounces of equivalent refined platinum production of which 47,600 ounces were attributable to Anglo Platinum with the balance purchased in concentrate from the joint venture partner.• Marikana: Equivalent refined platinum production attributable to Anglo Platinum increased by 81% or 10,400 ounces. Marikana remains in ramp-up and is expected to continue increasing production with steady state production of 74,000 equivalent refined platinum ounces.• Twickenham: Reported separately for the first time in 2007, mining at Twickenham produced 9,300 equivalent refined platinum ounces, compared to 6,400 ounces produced in the comparative period of 2006.• Western Limb Tailings Retreatment: Equivalent refined platinum production increased to 45,300 ounces with an improvement in the concentrator recovery due to increased stability of the ultra fine grinding circuit. Lower production was recorded at: • Rustenburg: The mine experienced increased fatalities in 2007 resulting in an increase in unplanned remedial work stoppages. Following the spate of fatalities in the first half of 2007, a decision was taken to 'stop and fix' Rustenburg. This entailed the stopping of production at each of the five shafts on the lower mine for a period of five days. The ramp-up in production following the shaft closures took longer than anticipated and consequently production levels reduced during the second half of the year. Labour disputes amongst contractors during the first half of the year and high labour turnover and the employment of novice workers resulted in a marked reduction in labour efficiencies, which impacted on production. A decision was also taken during November to suspend operations at Turffontein shaft and rehabilitate some of the shaft steel work. Consequently this shaft will not be producing until the second quarter of 2008. Output from UG2 ore sources increased from 63% to 69%, impacting negatively on 4E built-up head grades which reduced to 3.98 g/t from 4.26 g/t reported in 2006. This resulted in a 20% or 167,800 ounce decrease in equivalent refined platinum production and a significant decrease in primary development which prevented the planned improvement in key underground metrics. • Amandelbult: Equivalent refined platinum production decreased by 3% or 18,500ounces. The decrease in ounces is attributable to lower grades as a consequenceof an increase in the UG2 component of tonnes milled and the continued lowgrades encountered in the transition zone on the Merensky horizon. Thestockpiles of UG2 ahead of the concentrator, as reported at the half year, havebeen depleted with stockpiles currently running at normal levels. • Union: Equivalent refined platinum production decreased by 2% or 7,300 ounces. The lower output was caused by power and labour disruptions, safety stoppages associated with re-organising of mining activities at the declines following the replacement of contractors during the first half of the year and stoppages for safety training as part of the Group safety intervention programme. • Potgietersrust: Mining at the new PPRust North pit, which commenced in December 2006, continued in 2007. In the area mined during 2007 the effect of oxidised material negatively impacting process recovery was more extensive than initially anticipated. Unscheduled mill and crusher maintenance resulted in lower volumes milled which, together with the impact of the oxidized material on recoveries, reduced refined output at Potgietersrust in 2007 to 163,500 ounces. The increase in tonnes mined from the PPRust North Pit and the commissioning of the new mill at the end of the first quarter of 2008 are expected to result in an increase in refined platinum production in 2008 with the mine expected to reach full capacity in 2009. • Bafokeng-Rasimone: Mill breakdowns during the second quarter, strike action of contractor employees, difficult ground conditions and safety work stoppages resulted in equivalent refined platinum production decreasing by 11% or 24,200 ounces. • Lebowa: Equivalent refined platinum production decreased by 11% or 11,300 ounces. This lower output was due to power outages, high labour turnover and resultant labour inefficiencies. • Modikwa: Labour unrest experienced during the first quarter of 2007, which included a protected strike that lasted 25 days, severely hampered production during the first half of 2007 resulting in the decrease of equivalent refined platinum production by 13% or 17,500 ounces compared to 2006. • Kroondal: Total equivalent platinum ounce production at the Kroondal mine, a joint venture with Aquarius Platinum South Africa (Pty) Ltd, declined by 5% to 130,200 ounces due to labour disruptions, safety stoppages, lack of skilled resources to maintain mechanised equipment and a lower built-up head grade. Process operations The focus on continuous business improvement and the implementation of proactiveperformance monitoring of concentrator operations has resulted in a furtherimprovement in concentrator recoveries in 2007. This was achieved despite a 5%decrease in built-up head grade as a result of an increase in the ratio of UG2and Platreef ore to total ore treated, both of which have a lower recoverypotential than Merensky ore. Smelting operations performed well over the period with a satisfactory solutionto furnace cooling at the Polokwane smelter being implemented. As previouslyreported the scheduled re-build of the Waterval No. 1 furnace was completedsuccessfully with full output achieved in June 2007. The slag cleaning furnacefailure at the Waterval complex has been repaired and was fully operational inAugust 2007. The increase in pipeline stocks that built up as a result of thefailure were processed in the second half of 2007 with pipeline stocks at theslag cleaning furnace returning to normal levels. Refining operations performed well over the period with improved recoveries atthe Precious Metals Refinery. The smelting and refining operations unit costs were impacted by the lowerrefined production. An increase in the costs of key inputs, including chemicalsand steel grinding media, increased energy, labour and maintenance costs furthercontributed to the cash smelting and refining cost per refined platinum ounceincreasing by 25%. 4. PROJECTS Anglo Platinum remains confident of continued robust demand for platinum and iscontinuing with its expansion programme. The rate of expansion is reviewed on anongoing basis against Anglo Platinum's growth strategy. The long term outlookfor metal prices remains positive and consequently studies evaluating theramping up of various projects continue. In 2007 the Board approved projects totalling R10.7 billion, in 2007 moneyterms. Included in these approvals are the expansion of the Base MetalsRefinery, the Rustenburg Townlands ore replacement project and the MainstreamInert Grind projects on various operations. The R1.9 billion Base Metals Refinery project is to expand the capacity of theexisting plant to 33ktpa of contained nickel by the end of 2010. The R1.0 billion Rustenburg Townlands ore replacement project will replace70,000 ounces of refined platinum per annum from 2014 with production expectedfrom the new Merensky and UG2 areas at the Rustenburg Townlands shaft. Thisproject is considered to be an important component of Rustenburg's strategy andbusiness plan. The R1.4 billion Mainstream Inert Grind projects were approved in November 2007.These projects will improve mineral liberation and metallurgical performancewithin the process flow of the current concentrators, and will result in anincrease in PGM recovery. The R1.7 billion Lebowa Middelpunt Hill phase 3 125ktpm UG2 project was approvedin May 2007 prior to conclusion of the Transaction Framework Agreement betweenAnglo Platinum and Anooraq Resources in September 2007. In light of the recentlyannounced major black economic empowerment transaction capital expenditure onthe project has been deferred. The PPRust North expansion project, which will mill an additional 600,000 tonnesof ore per month, is progressing. Commissioning of the new concentrator hascommenced. The relocation of the Ga-Puka and Ga-Sekhaolelo communities commencedin July 2007 under the guidance of a representative task team facilitated by theoffice of the Premier of Limpopo. As at the date of this report some 640families have been relocated to the new villages and all schools are nowoperating. The remaining 317 families are scheduled to complete the relocationby the end of April 2008. The relocations were conducted in line with World Bankresettlement guidelines to ensure that the communities are better off afterresettlement than they were before. In this regard, Anglo Platinum hasestablished community trusts to ensure that benefits flow to these communitiesto build sustainable development in the areas such as infrastructure, education,health and job creation. The relocations are expected to cost some R650 million.The R1.5 billion Amandelbult East Upper UG2 project, which will contribute anadditional 100,000 ounces of refined platinum per annum by 2012, is progressingon schedule. The R2.3 billion Rustenburg Paardekraal 2 shaft replacement project is inprogress and is expected to produce 120,000 ounces of refined platinum per annumby 2015, replacing decreasing production as a result of continuing Merensky orereserve depletion. Projects that continue to increase production include Marikana and the Mototolojoint ventures, with Mototolo delivering its first production in the lastquarter of 2006. The R5.9 billion Twickenham expansion project was approved in the first quarterof 2008. The project will expand current operations and exploit the UG2 reefhorizon. The strong global demand for resources is placing material inflationary pressureon capital expenditure and the ability to meet project schedules, the effect ofwhich was experienced in the latter part of 2007. These pressures are likely tocontinue in the foreseeable future. 5. CAPITAL EXPENDITURE Total capital expenditure amounted to R10.7 billion, an increase of R4.13billion over 2006. Expansion expenditure was R5.24 billion with expenditure to maintain operations at R5.14 billion. Capitalised interest amounted to R275 million. Anglo Platinum expects capital expenditure for 2008 to be between R10.5 billion and R11.5 billion. 6. MINERALS LEGISLATION AND TRANSFORMATION Anglo Platinum is fully committed to the Minerals and Petroleum ResourcesDevelopment Act ("the Act") and the mining charter and to achieving theassociated sustainable economic and social transformation. Anglo Platinum has completed a number of empowerment transactions over theyears. On 4 September 2007 Anglo Platinum, Anooraq Resources and Mvela Resourcesannounced transactions that would result in the creation of two significant andsustainable historically disadvantaged South African managed and controlledplatinum group metal producers, with critical mass and significant growthpotential. The key features of the announced transactions include: • The sale by Anglo Platinum of an effective 51% of Lebowa Platinum Mines and an effective 1% of the Ga-Phasha Project for a total consideration of R3.6 billion to Anooraq.• The purchase by Mvela Resources of Anglo Platinum's 50% interest in the Booysendal Project and 22.4% direct interest in Northam for a total consideration of R4.0 billion.• The formation by Anglo Platinum of an employee share ownership plan benefiting more than 44,000 employees, which will comprise up to 1.5% of Anglo Platinum's issued share capital. Further details of the key terms of the transactions will be announced during2008 once the agreements have been finalised and funding arrangements are inplace. Anglo Platinum has made significant progress towards achieving itstransformation objectives as envisaged by the Act and the mining charter. Noteworthy milestones achieved in support of Anglo Platinum's social and labourplan include: • 10% women in mining• 43% historically disadvantaged South Africans in management positions• R7.40 billion spent on procurement from historically disadvantaged South Africans in 2007, some 32% of Anglo Platinum's total discretionary procurement spend• Continued investment in housing and community projects. In a move to address the ongoing skills shortage facing the industry, AngloPlatinum approved and commenced the construction of a R283 million mine trainingcentre on its Twickenham mine property, in support of the social and labourplans for its new mining projects. The training centre will provide skills to2,000 new mining employees per year for the new and existing mining projects onthe Eastern Limb of the Bushveld complex. The centre will include surface andunderground training facilities to equip employees with conventional andmechanised mining skills to match the range of mining techniques employed byAnglo Platinum. The first trainees are expected to be enrolled in 2008. 7. DIVIDENDS Ordinary dividends are declared after consideration of current and futurefunding requirements and are paid out of cash generated from operations.Anglo Platinum paid an interim ordinary dividend of 2,900 cents per share. TheBoard has declared a final ordinary dividend of 2,300 cents per share resultingin a dividend cover ratio of 1 on full year headline earnings. A preferencedividend of 318 cents and 320 cents per preference share was declared and paidin May 2007 and November 2007 respectively, maintaining the full year preferenceshare dividend of 638 cents per share. 8. PROSPECTS Anglo Platinum's commitment to employee safety, including the principle of zeroharm will continue to be an area of focus in 2008. The new approach to safety,alongside operational difficulties, has had a material impact on 2007, which islikely to continue in 2008. Production disruptions arising from Eskom'sinability to supply sufficient power have been experienced in 2008. Consequentlyrefined platinum production is expected to be 2.4 million ounces in 2008. A combination of a weak dollar, robust demand for platinum and slower thananticipated supply growth is supportive of higher US dollar prices. Theautocatalyst sector remains buoyant, driven by rising European demand for dieselvehicles and their associated catalyst and filter requirements as well asgrowing Asian automotive production. Purchases of newly mined platinum forjewellery manufacturing in China are holding up well in the face of recordprices, but new metal demand is declining in the Japanese and US jewellerymarkets as recycling of old jewellery is encouraged by the higher price levels.Industrial demand remains firm, particularly in the electrical and petroleumsectors. Palladium demand for autocatalyst and industrial applications continues to grow,supported by the low price relative to platinum. Jewellery demand is expected totake increasing market share from white gold as palladium prices have lagged therecent significant increase in the gold price. Palladium prices continue totrade in a narrow band and remain vulnerable to a change in investor and fundsentiment. The Exchange Traded Funds for platinum and palladium, established in 2007, haveattracted considerable interest of late. It still remains to be seen whatinfluence these funds will exert on metal prices, however, it is possible thatthey could contribute to increased price volatility going forward, particularlyin the platinum market. Prices for rhodium are anticipated to stay strong as the market remains finelybalanced. Management continues to vigorously address unit costs. The emphasis onincreasing volumes and improving operating efficiencies remains a driver ofperformance at operations. Key risks affecting future production include: • The impact of constrained electricity supply on production and expansion projects;• The ongoing skills shortage;• Production stoppages related to safety. D G Wanblad N B Mbazima T M F Phaswana J D Meyer (Executive Director: (Executive Director: (Chairman (Company Secretary)Projects and Engineering Finance and Acting Joint Acting Joint Chief Executive Officer)Chief Executive Officer) Johannesburg7 February 2008 NOTICE OF ANNUAL GENERAL MEETING Notice is hereby given that the annual general meeting of shareholders of thecompany will be held in the Auditorium on the 18th Floor, 55 Marshall Street,Johannesburg on Monday, 31 March 2008 at 14:00 to consider and if approved,adopt the annual financial statements for the year ended 31 December 2007together with the report of the auditors, re-elect directors retiring byrotation, pass ordinary resolutions placing the unissued ordinary shares underthe control of directors and approving non-executive director's fees and passinga special resolution permitting the company and/or its subsidiaries to acquireshares in the company. A detailed notice of AGM will be posted to shareholders. DECLARATION OF FINAL ORDINARY DIVIDEND (NO. 110) Notice is hereby given that a final dividend of 2 300 cents per ordinary share,in the currency of the Republic of South Africa, has been declared in respect ofthe year ended 31 Decemb er 2007. The dividend is payable to shareholdersrecorded in the books of the Company at the close of business on Friday, 14March 2008. The salient dates for the final ordinary dividend are as follows: Salient dates for South Africa and United Kingdom 2008------------------------------------------------------------------------------Last day to trade (cum dividend) Friday, 7 MarchFirst day of trading (ex dividend) Monday, 10 MarchCurrency conversion date (for sterling payments from London) Monday, 10 MarchRecord date Friday, 14 MarchPayment date Monday, 17 March------------------------------------------------------------------------------ Share certificates may not be dematerialised or re-materialised and noconversion of preference shares into ordinary shares will be permitted betweenMonday, 10 March 2008 and Friday, 14 March 2008, both days inclusive, nor maytransfers take place between the South African and United Kingdom shareregisters during this period. On Monday, 17 March 2008, the dividend will be electronically transferred to thebank accounts of all certificated shareholders, where this facility isavailable. Where electronic fund transfer is either not available or not electedby the shareholder, cheques dated 17 March 2008 will be posted on that date.Holders of dematerialised shares will have their accounts credited at their CSDPor broker on 17 March 2008. Shareholders registered on the United Kingdom register will be paid the dividendin pounds sterling at the rate of exchange determined on Monday, 10 March 2008.A further announcement stated the rand/sterling conversion rate will be releasedthrough the relevant South African and United Kingdom news services on Tuesday,11 March 2008. The dividend is payable subject to payment conditions which may be inspected ator obtained from the Company's Johannnesburg Office or from its LondonSecretaries. SUPPLEMENTARY INFORMATIONCONSOLIDATED STATISTICS (UNAUDITED) Year ended Year ended 31 December 31 DecemberTotal operations 2007 2006------------------------------------------------------------------------------Marketing statisticsAverage market prices achievedPlatinum (US$/oz) 1 302 1 140Palladium (US$/oz) 355 319Rhodium (US$/oz) 4 344 3 542Nickel (US$/lb) 17,04 10,74US$ Basket price (Net sales revenueper refined Pt ounce sold) (US$) 2 579 2 030Platinum (R/oz) 9 149 7 785Palladium (R/oz) 2 499 2 178Rhodium (R/oz) 30 593 23 996Nickel (R/lb) 121,13 74,04R Basket price (Net sales revenueper refined Pt ounce sold) (R) 18 167 13 852Average exchange rate achieved onsales (R : US$) 7,0431 6,8223Exchange rate at end of period/year (R : US$) 6,8360 7,0010Financial statistics and ratiosGross profit margin (%) 40,7 42,2Earnings before interest, taxation,depreciation and amortisation(EBITDA) (R millions) 21 946 19 187Operating profit to averageoperating assets (%) 58,6 56,2Return on average shareholders'equity (%) 44,1 48,2Return on capital employed (%) 66,6 70,5Interest cover - EBITDA 54,6 97,1Net asset value per share (R) 121,7 122,7Net debt to total capital employed (%) 13,1 n/aInterest-bearing debt toshareholders' equity (%) 28,4 2,0Cost of sales per total Pt oz sold (R) 10 711 7 963Cash operating cost per equivalentPt oz (excluding ounces from purchasedconcentrate and associated costs) (R) 8 181 6 116Cash operating cost per refined Ptoz (R) 8 129 5 748Equivalent refined platinumproduction (thousands) (oz) 2 471,4 2 638,6Gain in smelting and refiningpipeline (thousands) (oz) 9,8 39,9Refined platinum production (thousands) (oz) (2 474,0) (2 816,5) -------- --------Mining (thousands) (oz) (2 164,0) (2 506,3)Purchase of concentrate (thousands) (oz) (310,0) (310,2) -------- --------Platinum pipeline movement (thousands) (oz) 7,2 (138,0) -------- -------- REGISTERED OFFICE55 Marshall Street, Johannesburg, 2001(P.O. Box 62179, Marshalltown, 2107)Facsimile +27 11 373-5111Telephone +27 11 373-6111 SOUTH AFRICAN REGISTRARSComputershare Investor Services 2004 (Pty) Limited(Registration No. 2004/003647/07)70 Marshall Street, Johannesburg, 2001(P.O. Box 61051, Marshalltown, 2107)Facsimile +27 11 688-5221Telephone +27 11 370-5000 LONDON SECRETARIESAnglo American Services (UK) Limited,20 Carlton House Terrace, London, SW1Y 5AN, EnglandFacsimile +44 207 968-8755Telephone +44 207 968-8888 UNITED KINGDOM REGISTRARSCapita Registrars LimitedThe Registry, 34 Beckenham RoadBeckenham, Kent, BR3 4TU, EnglandFacsimile +44 208 639-2142Telephone +44 870 162-3100 (within UK)Telephone +44 208 639-2157 (from outside UK) Detailed results are available on the Internet at: http://www.angloplatinum.comE-mail enquiries should be directed to:traymond@angloplat.com DIRECTORS AND COMPANY SECRETARYEXECUTIVE DIRECTORS: N B Mbazima (Zambian), (Executive Director, Finance andActing Joint Chief Executive Officer), D G Wanblad (Executive Director, Projectsand Engineering and Acting Joint Chief Executive Officer). NON-EXECUTIVE DIRECTORS: T M F Phaswana (Chairman), P M Baum, C B Carrol(American), R J King (British), R Medori (French), A E Redman (British). INDEPENDENT NON-EXECUTIVE DIRECTORS: T A Wixley (Deputy Chairman), R M W Dunne(British), Dr. B Khumalo, M V Moosa, S E N Sebotsa. ALTERNATE DIRECTORS: P G Whitcutt. COMPANY SECRETARY: J D Meyer. This information is provided by RNS The company news service from the London Stock Exchange