Anpario Regulatory News (ANP)

12 Feb 2007 07:01

Anglo Platinum Limited09 February 2007 Anglo Platinum A member of the Anglo American plc group MAIN FEATURES • Rand basket price per Pt oz increased by 56.2%• Headline earnings per ordinary share up 194%• Dividends per ordinary share up 349%• Refined Pt production up 15% to 2 816 500 oz ABRIDGED FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2006 CONSOLIDATED INCOME STATEMENT Audited Audited Year Year ended ended 31 31 December % DecemberR millions 2006 Change 2005 GROSS SALES REVENUE 39 355,7 23 108,1Mined 34 978,5 21 197,4Purchased metals in concentrate 4 377,2 1 910,7Commissions paid (200,4) (170,1) --------- ---------NET SALES REVENUE 39 155,3 22 938,0COST OF SALES (22 531,2) (17 100,3) --------- ---------GROSS PROFIT ON METAL SALES 16 624,1 5 837,7Mined 16 283,5 5 751,2Purchased metals in concentrate 340,6 86,5Other net (expenditure)/income (130,0) 322,1Market development and promotionalexpenditure (236,4) (214,3) --------- ---------OPERATING PROFIT 16 257,7 5 945,5Interest expensed (193,2) (273,4)Interest received 219,5 135,5Income from associates 429,9 134,8 --------- ---------PROFIT BEFORE TAXATION 16 713,9 5 942,4Taxation (4 782,1) (1 452,5) --------- ---------PROFIT AFTER TAXATION 11 931,8 4 489,9Minority interest (14,9) - --------- ---------NET PROFIT 11 916,9 4 489,9 --------- ---------RECONCILIATION BETWEEN NET PROFIT AND HEADLINE EARNINGSNet profit 11 916,9 4 489,9Less: Declared and undeclaredcumulative preference share dividends and related STC (236,7) (255,2) --------- ---------Basic earnings attributable toordinary shareholders 11 680,2 4 234,7Adjustments (after tax whereapplicable):Profit on disposal of conversion rights (22,0) (117,3)Impact of assets exchanged - (139,2)Property, plant and equipment - (67,3)Conversion rights - (71,9)Cost on disposal of 15% interest inUnion section 104,7 -(Profit)/loss on disposal and scrapping of property, plant and equipment (6,4) (2,0) --------- ---------Headline earnings attributable toordinary shareholders 11 756,5 3 976,2Add: Declared and undeclaredcumulative preferenceshare dividends and related STC 236,7 255,2 --------- ---------Headline earnings 11 993,2 4 231,4 --------- ---------Number of ordinary shares in issue(millions) 229,6 218,3Weighted average number of ordinaryshares in issue (millions) 218,8 217,5Attributable earnings per ordinaryshare (cents)- Basic 5 339,5 1 947,0- Diluted 5 317,4 1 935,3Attributable headline earnings perordinary share (cents)- Headline 5 374,4 1 828,1- Diluted 5 352,1 1 823,9Dividends per ordinary share (cents) 5 300 1 180- Interim 1 400 480- Final 3 900* 700 Dividends per preference share (cents) 638,0 638,0Dividend cover per ordinary share(headline earnings) 1,0 1,5 * Proposed ordinary dividend GROUP STATEMENT OF RECOGNISED INCOME AND EXPENSE Audited Audited Year Year ended ended 31 December 31 DecemberR millions 2006 2005INCOME AND EXPENSE RECOGNISED DIRECTLY IN THE INCOMESTATEMENT PROFIT AFTER TAXATION 11 931,8 4 489,9Less: Taxation recognised directly in equity (79,1) - --------- --------- 11 852,7 4 489,9 --------- ---------Attributable to:Equity holders of the parent 11 837,8 4 489,9Minority shareholders interest 14,9 - --------- --------- 11 852,7 4 489,9 --------- ---------EFFECT OF CHANGE IN ACCOUNTING POLICY:IFRS 3 - Negative goodwill on associate reversed 173,4 --------- --------- ABRIDGED CONSOLIDATED BALANCE SHEET Audited Audited as at as at 31 31 December DecemberR millions 2006 2005 ASSETSNon-current assets 31 400,7 27 105,3Property, plant and equipment 20 871,7 19 650,5Capital work-in-progress 9 127,9 6 280,1Investment in associates 943,6 749,5Cash deposits held by environmental trusts 264,4 204,7Prepaid leases and other receivables 193,1 220,5 Current assets 14 912,0 8 657,1Inventories 5 300,4 4 412,3Accounts receivable 4 883,1 2 270,2Derivative financial assets 4,7 -Cash and cash equivalents 4 723,8 1 974,6 --------- ---------Total assets 46 312,7 35 762,4 --------- ---------EQUITY AND LIABILITIESShare capital and premium 5 591,0 5 421,9Accumulated profits 22 589,4 15 380,1Minority shareholders' interest 511,4 - --------- ---------Shareholders' equity 28 691,8 20 802,0Non-current liabilities 8 465,9 6 924,4Deferred taxation 7 168,2 5 920,9Environmental obligations 530,4 424,9Employees' service benefit obligations 292,8 116,3Obligations due under finance leases 474,5 462,3Current liabilities 9 155,0 8 036,0Interest-bearing borrowings 100,0 3 805,2Accounts payable 6 029,4 3 595,2Share based payment provision 318,0 102,2Derivative financial liabilities - 14,0Taxation 2 707,6 519,4 --------- ---------Total equity and liabilities 46 312,7 35 762,4 --------- --------- ABRIDGED CONSOLIDATED CASH FLOW STATEMENT Audited Audited as at as at 31 December 31 DecemberR millions 2006 2005CASH FLOWS FROM OPERATING ACTIVITIESCash from operations 18 403,3 7 626,0Interest paid (net of interest capitalised) (163,7) (262,6)Taxation paid (1 273,8) (554,9) --------- ---------Net cash from operating activities 16 965,8 6 808,5 --------- ---------CASH FLOWS USED IN INVESTING ACTIVITIESPurchase of property, plant and equipment(including interest capitalised) (6 524,5) (4 097,4)Proceeds from sale of plant, equipment andconversion rights 106,0 123,7Interest received 219,5 135,5Net proceeds on sale of 15% interest in UnionSection 385,0 -Advances made (70,0) -Other 54,8 (35,5) --------- ---------Net cash used in investing activities (5 829,2) (3 873,7) --------- ---------CASH FLOWS USED IN FINANCING ACTIVITIESProceeds from the issue of ordinary and preferenceshare capital 169,1 163,1Repayment of interest-bearing borrowings (3 705,2) (1 542,7)Ordinary and preference dividends paid (4 851,3) (2 028,7) --------- ---------Net cash used in financing activities (8 387,4) (3 408,3) --------- ---------Net increase/(decrease) in cash and cashequivalents 2 749,2 (473,5)Cash and cash equivalents at beginning of year 1 974,6 2 448,1 --------- ---------Cash and cash equivalents at end of year 4 723,8 1 974,6 --------- --------- MOVEMENT IN NET DEBT**Net debt at beginning of year (2 292,9) (3 429,4)Net cash from operating activities 16 965,8 6 808,5Net cash used in investing activities (5 829,2) (3 873,7)Other (4 694,4) (1 798,3) --------- ---------Net cash/(debt) at end of year 4 149,3 (2 292,9) --------- --------- ** Net debt comprises interest-bearing liabilities and obligations under finance leases 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 Accepted Accounting Practice, AC127, with the same title as well as with Schedule 4 of the South African Companies Act and the disclosure requirements of the JSE Limited's Listings Requirements. 2. The abridged report has been prepared using accounting policies that comply with South African Statements of Generally Accepted Accounting Practice and International Financial Reporting Standards. The accounting policies are consistent with those applied in the financial statements for the year ended 31 December 2005, except for the changes which are described below. • IFRS 6 - Exploration for and evaluation of Mineral Resources. This standard has no impact on the measurement of assets in the financial statements. • IFRIC 7 - Applying the restatement approach under IAS 29 - Financial Reporting in Hyperinflationary Economies. The adoption of this standard had no impact on the financial results. • IFRIC 8 - Scope of IFRS 2. This new policy was applied in the accounting for the disposal of a 15% interest in Union section for less than its fair value. • IFRIC 9 - Reassessment of Embedded Derivatives. This new policy had no financial impact on the financial results. • IFRIC 10 - Interim Financial Reporting. This new policy had no impact on the financial results. • IFRIC 11 - IFRS 2: Group and Treasury Shares. This standard had no impact on the financial results. Year Year ended ended 31 31 December DecemberR millions 2006 20053. CommitmentsMining and process property, plant and equipmentContracted for 4 866,5 1 442,9Not yet contracted for 9 562,9 6 259,0 --------- ---------Authorised by the directors 14 429,4 7 701,9 --------- ---------OtherOperating lease rentals - buildings 602,4 589,9Due within one year 44,0 41,0Due within two to five years 196,5 163,3More than five years 361,9 385,6Information Technology Service Providers 165,4 144,5Due within one year 74,1 62,1Due within two to five years 91,3 82,4 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 pooling and sharing arrangement to the Group in the caseof termination of that relationship. The probability of the option beingexercised is considered remote. The amount of such an obligation is dependant ona discounted cash flow valuation of their interest at that point in time. 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 R72,8 million. 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 2006 theseguarantees amounted to R158,7 million. The Group has provided Lexshell 36 General Trading (Pty) Limited, a companyowned by the Bakgatla-Ba-Kgafela traditional community, with a facility thatcovers their debt repayments should that company not be able to meet therepayments. The facility is limited to Union Section's cash flows, and a call onthis facility is considered a remote possibility. 5. Change 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 R102,0 million (2005: R335,7 million).This results in the recognition of an after-tax gain of R72,4 million (2005:R238,3 million). The amount of the effect in future periods has not been disclosed becauseestimation is impracticable. 6. Comparative figures Reclassification - transactions giving rise to adjustments to revenue/purchases During the year the Group complied with the requirements of Circular 9/2006Transactions giving rise to Adjustments to Revenue/Purchases, issued by theSouth African Institute of Chartered Accountants. Previously the Group includedcertain trade discounts in commissions paid. This change resulted in revenue andcommissions paid for the year ended 31 December 2005 decreasing by R200,3million. Reclassification - apportionment of share based payment provision betweencurrent and non-current During the period, the Group classified the current portion of R318,0 million(2005: R102,2 million) of the share based provision to "Current liabilities".This had no impact on the financial results. Reclassification - cash held by insurance captives Cash held in insurance captives was previously disclosed separately on the faceof the balance sheet. This line item is now aggregated with cash and cashequivalents and prior periods were reclassified accordingly. The amount of cashheld by insurance captives is R347,2 million (31 December 2005: R167,2 million). Reclassification - Pandora Pandora was previously accounted for as a joint venture instead of an associate.A balance of R93,5 million (31 December 2004) in property, plant and equipment and R27,1 million (31 December 2004) in the deferred tax liabilities were reclassified to Investment in Associates. Reclassification - accounts receivable In 2005, R148,0 million of capital-work-in-progress was erroneously included inaccounts receivable. The comparative figures were reclassified accordingly. 7. Post balance sheet events As the dividend cover in respect of the 2006 dividends is less than 1,4 times,the terms of the preference share require an adjustment to the conversion pricesto be used when the convertible preference shares are converted into ordinaryshares. The current conversion price is R288,43 or 34,7603 ordinary shares foreach 100 preference shares. The conversion ratio is to be adjusted in proportionto the amount of the dividend, which results in the dividend cover of less than1,4 times in relation to the share price at the time of the dividend. Therevised ratio will be published on SENS and in the press ounce it has beendetermined. 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 2. 9. Audit opinion The auditors, Deloitte & Touche, have issued their opinion on the Group'sfinancial statements for the year ended 31 December 2006. 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 The Group achieved a substantial improvement in headline earnings compared tothe year ended 31 December 2005. Factors contributing to the increase werehigher US dollar prices realised on metals sold, increased sales volumes and aweaker rand/US dollar exchange rate. Headline earnings and headline earnings attributable to ordinary shareholdersrose to R11,99 billion and R11,76 billion respectively, an increase of some 183%and 196%. Headline earnings per ordinary share rose 194% to 5 374 cents. Basedon the strong financial performance for 2006 a final dividend of 3 900 cents perordinary share has been declared. Net sales revenue rose by R16,22 billion to R39,16 billion. The increase was theresult of higher US dollar prices achieved on all metals sold, contributingR11,38 billion of the increase and higher volumes of metals sold, mainlyplatinum and rhodium, which contributed a further R2,30 billion. The averageachieved rand/US dollar exchange rate was weaker at R6,82, compared to the rateof R6,39 in 2005, contributing an increase in revenue of R2,54 billion. The average prices achieved on platinum and palladium sales for the 12 months to31 December 2006 were US$1 140 per ounce and US$319 per ounce respectively. As aresult of existing long term contractual arrangements with some customers tosupport and develop the rhodium market, the average price achieved on sales ofrhodium for the period was US$3 542 per ounce. Higher sales volumes were achieved as a result of a 15% increase in refinedplatinum production to 2 816 500 ounces in 2006. This reflects increasedproduction at mining operations and the release of pipeline stocks, includingprocessing concentrate built up at Polokwane smelter in 2005. Cost of sales increased by R5,43 billion to R22,53 billion, principally as aresult of: • The value of purchases of metal in concentrate almost doubled from R1,99 billion to R3,95 billion. This was due to higher US dollar prices paid for metals in concentrate, contributing R1,26 billion of the increase, higher volumes of metals in concentrate purchased from the Kroondal and Marikana pooling-and-sharing agreements and the Bafokeng-Rasimone and Modikwa joint ventures, contributing a further R0,46 billion. The impact of the weaker average rand/US dollar exchange rate contributed R0,24 billion. • Cash mining, smelting and refining costs rose 15% to R15,14 billion with cash operating unit costs per equivalent refined platinum ounce rising by 10,7% to R6 116. The increase was due to inflation, additional costs associated with increased mine production which, for the first time, includes the costs associated with the Marikana and Mototolo operations, once-off extensive ground support work at Union UG2 declines and costs associated with the advanced turnaround programmes to establish a sustainable base for future production at Rustenburg and Amandelbult. Higher diesel, steel, tyres and labour costs also contributed to the increase. Cost savings of some R367 million, arising from specific procurement projects and other cost savings initiatives, were realised in 2006. • Other costs increased by R776 million or 76%, including an increase of R414 million in the cost associated with share-based payments as a result of a higher share price on 31 December 2006 when compared to 31 December 2005, higher royalties and increased research and exploration costs. • Amortisation increased by 9% or R208 million as a result of the capital expenditure programme and increased use of new operating assets. • The value of metals in inventory increased by R766 million during 2006. Despite a net decrease in the quantity of pipeline stock following the processing of concentrate built up at the Polokwane smelter at the end of 2005, offset by a stock adjustment following an increase in metal identified during the annual stock take, the value of metal in stock increased due to refined metal stocks returning to normal levels and the increase in the unit cost at which metal inventories are valued. Other net expenditure for the period amounted to R130 million and comprised acost of R258 million on disposal of 15% of Union section, and businessoptimisation and project maintenance costs of R308 million offset by foreignexchange gains of R297 million. 2. SAFETY Improving the safety performance of our employees and contractors remains AngloPlatinum's highest priority. A drop in fatal incidents was recorded for 2006.The Group continues to invest significant resources in a comprehensive suite ofsafety initiatives to ensure a sustainable step change in safety performance. Itis, however, with deep regret that management reports the loss of the lives of18 employees at managed operations and one at the non-managed Modikwa jointventure as a result of mine related accidents in 2006. Management and the Boardextend their condolences to the families, friends and colleagues of thedeceased. 3. OPERATIONS Refined platinum production rose by 15% to 2 816 500 ounces, primarily due toincreased production at mining operations and the release of pipeline stocksincluding the processing of concentrate built up at the Polokwane smelter in2005. The cash operating cost per equivalent refined platinum ounce increased by 10.7%to R6 116. Once-off additional ground support work during 2006 at Union,equipping and development programmes to establish a sustainable base for futureproduction at Amandelbult and Rustenburg, above inflation cost increases indiesel, steel, tyres and labour and the effect of lower grades as a consequenceof a higher percentage of UG2 ore mined, are the principal reasons for the aboveinflation unit cost increase. Mining operations Equivalent refined platinum production from the mines managed by Anglo Platinumand its joint venture partners for 2006 increased by 134 900 ounces to 2 638 600ounces in 2006, an increase of 5,4%. Increased production of equivalent refined platinum ounces was recorded at: • Rustenburg: The turnaround programme at Rustenburg increased production volumes and efficiencies with a 50% reduction in fatal incidents. Production increased by 9 300 ounces or 1,1%. Tons milled increased by 4,5%. The mine embarked on intensive development and equipping activities during 2006 to both stabilise and then increase the level of immediately available and immediately stopeable ore reserves. These are poised to increase materially in 2007 on the completion of well advanced infrastructural development in raises and boxholes. The ore-source mix continued to change and an increase in UG2 ore mined from 57% to 63% was recorded during 2006. This increase impacted adversely on the 4E built-up head grade which reduced by 2% to 4,26g/t. • Amandelbult: Production increased by 38 800 ounces or 7,0%. The benefits of the turnaround programme were evident during 2006 and tons milled increased by 16% to 6 974 000 tons. The grade was adversely affected by the increased UG2 ore milled from 45% to 51% of total tons milled, as well as the lower grade from the transition zone at the West Merensky Section of the No 1 Shaft, which continued to erode output. • Union: Production increased by 2 700 ounces or 0,9%. The mine successfully launched initiatives to increase production while the UG2 decline operations were in a rehabilitation phase following progressive ground support failures. The mine supplemented underground production from other ore sources which included clean-up activities in old mined-out areas, treatment of sifted low grade on-reef development material from surface rock piles and tailings retreatment. • Bafokeng-Rasimone: Production increased by 22 800 ounces or 11,7% due to an increase in underground performance resulting in an increase in tons delivered to concentrators of 7%, as well as the processing of excess ore stockpiles at Rustenburg mine. These stockpiles resulted from increased ore extraction above the BRPM plan capacity during the second half of 2005. The remainder of the stockpile of some 89 000 tons will be depleted during quarter one of 2007. • Modikwa: Ended the year on 135 200 ounces, up 4,8% from 2005 or 6 200 due to an improved 4E built-up head grade. Employee relation issues, labour productivity and difficult ground conditions were the major challenges during 2006. In late 2006 the mine commenced negotiations on certain conditions of employment which led to a protected strike in early 2007. The mine, however, achieved record production during the second half of 2006 with immediately available ore reserves increasing 32% to 14,5 months at the end of the year. • Kroondal: 16 800 ounces or 6,8% up to 263 200 ounces of which 136 400 ounces are attributable to Anglo Platinum. Production was hampered by a number of geological features, more complex than anticipated, that were encountered at No. 3 Shaft and to a lesser degree at East Shaft. • New production in 2006 arose from Marikana amounting to 33 800 ounces of which 12 800 were attributable to Anglo Platinum, the balance being sold to Impala Refining Services under the terms of the pooling-and-sharing agreement. In addition, Mototolo yielded for the first time 12 800 ounces of which 6 400 were attributable to Anglo Platinum and 6 400 purchased ounces. Lower production was recorded at: • Potgietersrust: The increased complexity associated with the ore mix from the existing Sandsloot and Zwartfontein pits, partly offset by the planned early introduction of the PPRust North pit, caused grade and recovery volatility and resulted in a lower 4E built-up head grade of 3,90g/t, down 3% from 2005. This together with above normal rainfall in the first quarter of 2006 which temporarily restricted mining access to lower benches and mechanical failures resulted in production decreasing by 6,8% from 2005 to 191 300 ounces. It is expected that the grade and recovery will normalise once fresh ore is fully accessed in the new pit increasing the opportunity for improved operational stability and optimal blending. Process operations Processsing operations performed well with improved processing efficiencieswhilst cash cost per refined platinum ounce was contained to an increase of 2,6%compared to 2005. The concentrators increased production in line with the mining operations andtreated record tons of 43 792 000 during the period, an increase of 6% on 2005.The commissioning of the Mototolo plant in the fourth quarter of 2006 increasedthe Group's concentrators to 19 individual processing plants located in nineseparate geographical locations around the Bushveld complex. Operations at theWestern Limb Tailings Retreatment plant continued with production 5 000 ounceslower than 2005 due to heavy rainfall in early 2006 and a number of equipmentfailures. Smelting operations performed well during the year, treating all excess stocksresulting from the Polokwane shutdown in September 2005. Good progress was madein resolving the material compatibility problem of the Polokwane waffle coolersand a long-term solution is currently under test. Cash smelting costs weremaintained within inflationary levels with cash cost per platinum ouncedispatched increasing 0,4% to R470. The ACP process at Waterval smelter is performing well and has maintainedsulphur emissions within permit and target levels. Initiated in 2005, theupgrade and rehabilitation of the associated acid plants were completed during2006. The Group is now uniquely positioned to achieve benchmark sulphur fixationlevels at the Waterval smelting complex. Optimisation of the ACP and slagcleaning furnace continued with significant improvements in processingefficiencies. In 2006 the refineries achieved improvements in both cost and operatingefficiencies with unit costs decreasing by 6%, driven by increased volumesrefined. 4. PROJECTS Anglo Platinum remains confident of the robustness of demand for platinum and iscontinuing with its expansion programme. Anglo Platinum expects to meet itslong-term average growth profile of 5% per annum by exploiting its own reservesthrough direct investment in projects as well as with joint venture partners.This growth profile requires projects that will create incremental newproduction as well as maintain existing production levels due to reservedepletion from current mining activities. The implementation of Anglo Platinum's extensive suite of mining and processingprojects to expand and maintain production continues on schedule. Projects thathave increased production include Modikwa, Kroondal and for the first time in2006, the Marikana and Mototolo ventures which have both added equivalentrefined platinum ounces of 12 800 for 2006. Marikana, approved in 2005, willproduce 74 000 equivalent refined platinum ounces a year by 2009. Mototolo isset to reach steady state production by the end of 2007 producing equivalentrefined platinum production of 130 000 ounces per annum at steady state. In 2006 the board approved capital expenditure totalling R11 billion, whichincluded the PPRust North expansion project. Work on this project, which aims tomill an additional 600 000 tons of ore per month producing an additional 230 000refined platinum ounces per annum from 2009, has commenced. Projects that contribute towards maintaining production levels include theAmandelbult 1 shaft optimisation project which was successfully completed duringthe year with the 75 000 ton per month UG2 concentrator being fully commissionedand running at capacity. This concentrator processes UG2 ore as Merenskyproduction declines due to the depletion of Merensky ore reserves. The Amandelbult East Upper UG2 Project which was approved in 2006 willconventionally mine the UG2 reef, using existing mining infrastructurepreviously employed to extract Merensky reef, at the vertical number 2 shaft andat three decline shafts. The 75 000 ton per month UG2 concentrator will beexpanded to 210 000 tons per month and by 2012 the project will contribute anadditional 100 000 ounces of refined platinum per annum. The Paardekraal 2 shaft replacement project will access deeper Merensky reservesat a rate of 100 000 tons per month. The project is expected to produce 120 000ounces of refined platinum per annum by 2015 replacing decreasing production asa result of reserve depletion. 5. CAPITAL EXPENDITURE Total capital expenditure was R6,53 billion, an increase of R2,16 billion over2005. Expansion expenditure was R2,17 billion and expenditure to maintainoperations increased to R4,28 billion, with capitalised interest of R83 million.Capital expenditure during 2006 included the PPRust North expansion project, theMototolo joint venture mining operations, and the Waterval concentratorretrofit. Anglo Platinum continues to pursue mining and processing projects that maintainand expand production. It is anticipated that capital expenditure for 2007 willbe between R9 billion and R10 billion. 6. CASH FLOWS The Group's net cash position at 31 December 2006 was R4,15 billion, asignificant increase from the R2,29 billion net debt position at the end of2005. Cash generated from operations was R18,40 billion. Cash outflows consistedof capital expenditure of R6,52 billion, taxation payments of R1,27 billion anddividend payments of R4,85 billion of which R4,60 billion were ordinarydividends and R255 million preference dividends. 7. NEW MINERALS LEGISLATION AND EMPOWERMENT OF HISTORICALLY DISADVANTAGED SOUTHAFRICANS Anglo Platinum is fully committed to the Minerals and Petroleum ResourcesDevelopment Act ("the Act") and the mining charter and to achieving theassociated sustainable economic transformation. This process started in 2000 with the sale of our stake in Northam toMvelaphanda Resources and in 2001 with the establishment of our 50:50 jointventure with the African Rainbow Minerals led consortium at Modikwa. Subsequenttransactions and ventures included the Bafokeng Rasimone mine, the Pandora,Ga-Phasha and Booysendal projects and a number of prospecting properties. InJuly 2006 a joint review of progress was conducted by Anglo Platinum and theDepartment of Minerals and Energy ("DME"). This highlighted the additionaldetail required by the DME to facilitate the processing of the submissionsalready made by Anglo Platinum to convert its "old order rights" to "new orderrights". Since then we have completed the sale of 15% of our Union mine to theBakgatla-Ba-Kgafela traditional community. In 2006, 18 Anglo Platinumprospecting rights were converted from "old order" to "new order". Anglo Platinum expects to make significant progress in 2007 to further enhanceits empowerment to fully embrace the transformation envisaged by the Act andmining charter and to obtain the associated conversion of rights. 8. SOCIAL RESPONSIBILITY AND HIV/AIDS Anglo Platinum remains committed to contributing towards social projects in thecommunities in which its operations are located. The Group continued to makesignificant contributions towards education, health, social services, arts andculture, and small business development projects during 2006. Anglo Platinum has continued to fight against the HIV/AIDS epidemic andassociated infections, particularly sexually transmitted infections andtuberculosis. For the year ended 31 December 2006, the company spent R96 millionon education, training, community based organisation support and a full wellnessprogramme which includes free anti-retroviral treatment, counselling andvoluntary testing. This social investment has achieved success as a result of the increasedpartnerships and support from government departments, civil society,international development agencies and unions. 9. DIVIDENDS Ordinary dividends are declared after considering current and future fundingrequirements and are paid out of cash generated from operations. Additionalconsiderations currently impacting funding requirements include: • Anglo Platinum's view that metal prices will remain firm for the foreseeable future, • the advanced level of implementation of expansion and replacement projects and the associated improved confidence in the accuracy of capital expenditure forecasts, • the magnitude of the planned capital expenditure, and • the potential volatility of metal prices and exchange rates. Consequently Anglo Platinum is able to declare a higher dividend and employ are-investment programme to optimise funding and provide shareholders with anopportunity to invest in its expansion programme. Shareholders will eitherreceive the full dividend in cash or elect to invest 50% thereof in new ordinaryshares in Anglo Platinum. It is the Group's intention to use a similar approachfor future dividend payments. Anglo Platinum paid an interim ordinary dividend of 1 400 cents per ordinaryshare. The Board has declared a final ordinary dividend of 3 900 cents perordinary share resulting in a dividend cover ratio of 1:0 on full-year headlineearnings. This represents an increase of 349% on the 2005 dividend. A preferencedividend of 318 cents and 320 cents per preference share was declared and paidin May 2006 and November 2006 respectively, bringing the full year preferenceshare dividend to 638 cents per share. Full details of the dividend are included in a separate announcement whiledetails of the dividend re-investment programme will be provided in a separatecircular. 10. PROSPECTS Management continues to vigorously address unit costs. The emphasis onincreasing volumes and improving operating efficiencies remains the driver ofperformance at operations. The wage agreement implemented in 2005 for managedoperations expires in June 2007. Anglo Platinum will enter into negotiationswith unions and associations. Operating costs and production may be affected bythe outcome of these negotiations. The South African engineering and construction industry is experiencing andforecasting rapid growth, which is expected to continue for a number of years.It is anticipated that this industry-wide demand on resources will affect AngloPlatinum's expansion programme and associated costs. The situation is beingclosely monitored and contingency plans are being developed as required tominimise any negative impact. The demand for newly-mined platinum continues to grow from the autocatalyst andindustrial sectors offsetting the decline in demand from the jewellery sector.Autocatalyst demand is expected to continue growing in response to growth in thesales of diesel vehicles worldwide coupled with the advances in emissionlegislation requiring the fitment of catalyst systems and particulate filterscontaining platinum. The application of platinum in a wide variety of uses inindustry remains robust. In the jewellery sector, the high price of platinum,but more importantly the volatility in the price, is limiting the levels ofstock held within the trade and hence demand is down. Additional developmentprojects to support the "Platinum" brand and the industry are being implementedin China, Japan and the USA. These initiatives are expected to sustain interestand assist in restoring demand even at current price levels. The recovery of palladium demand in the industrial market continues particularlyin the autocatalyst and electronics sectors. Substitution of palladium forplatinum in gasoline engine emission control catalysts is a continuing feature.The demand for palladium in the Chinese jewellery trade reduced from theexceptional peak last year as the manufacturing and retail pipelines wereestablished. Sustained demand will be dependant on creating consumer desire forthe product. The development of a differentiating image for palladium is in itsinfancy, but being pursued. The market for palladium is also being supported byinvestor interest in the metal which absorbs additional supply from Russianstocks. The markets for rhodium and ruthenium are supported by strong industrial demandand are expected to be buoyant in the medium term. Refined platinum production is expected to be between 2,8 to 2,9 million ouncesin 2007 in line with the Group's long-term average growth target of 5% perannum. While production and sales volumes will increase in 2007, the mostsignificant variable affecting earnings will be metal prices and the rand / USdollar exchange rate. If the basket price of metals sold and the rand / USdollar exchange rate remain at current levels, then operating profit for 2007 islikely to be higher than that achieved in 2006. R Havenstein T M F Phaswana Johannesburg(Chief Executive Officer) (Chairman) 12 February 2007 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 Friday, 30 March 2007 at 14:00 to consider and if approved,adopt the annual financial statements for the year ended 31 December 2006together 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. SUPPLEMENTARY INFORMATIONCONSOLIDATED STATISTICS (UNAUDITED) Year Year ended ended 31 December 31 DecemberTotal operations 2006 2005Marketing statisticsAverage market prices achievedPlatinum (US$/oz) 1 140 894Palladium (US$/oz) 319 199Rhodium (US$/oz) 3 542 1 966Nickel (US$/lb) 10,74 6,77US$ Basket price (Net sales revenueper refined Pt ounce sold) (US$) 2 030 1 388Platinum (R/oz) 7 785 5 704Palladium (R/oz) 2 178 1 274Rhodium (R/oz) 23 996 12 640Nickel (R/lb) 74,04 43,00R Basket price (Net sales revenueper refined Pt ounce sold) (R) 13 852 8 871Average exchange rate achieved onsales (R : US$) 6,8223 6,3915Exchange rate at end of period/year (R : US$) 7,0010 6,3450Financial statistics and ratiosGross profit margin (%) 42,2 25,3Earnings before interest, taxation,depreciation and amortisation(EBITDA) (R millions) 19 186,9 8 354,3Operating profit to averageoperating assets (%) 56,2 23,8Return on average shareholders'equity (%) 48,2 23,2Return on capital employed (%) 70,1 27,3Interest cover - EBITDA 81,5 21,6Net asset value per share (R) 124,9 95,3Net debt to total capital employed (%) n/a 9,8Interest-bearing debt toshareholders' equity (%) 2,0 20,5Cost of sales per total Pt oz sold (R) 7 963 6 587Cash operating cost per equivalent Ptoz(excluding ounces from purchasedconcentrate and associated costs) (R) 6 116 5 523Cash operating cost per refined Pt oz (R) 5 748 5 670Equivalent refined platinumproduction (thousands) (oz) 2 638,6 2 503,7Gain in smelting and refiningpipeline (thousands) (oz) 39,9 73,1Refined platinum production (thousands) (oz) (2 816,5) (2 453,2)Mining (thousands) (oz) (2 506,3) (2 236,1)Purchase of concentrate (thousands) (oz) (310,2) (217,1) --------- ---------Platinum pipeline movement (thousands) (oz) 138,0 123,6 --------- --------- Anglo Platinum Limited and its Subsidiaries ("Anglo Platinum") (Incorporated inthe Republic of South Africa) (Registration number 1946/022452/06) JSE Codes:AMS; AMSP ISIN: ZAE000013181; ZAE000054474A member of the Anglo American plc group REGISTERED OFFICE55 Marshall Street, Johannesburg, 2001(P.O. Box 62179, Marshalltown, 2107)Facsimile +27 11 373-5111Telephone +27 11 373-6111 SOUTH AFRICAN REGISTARSComputershare 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 IRG plcThe 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 SECRETARY EXECUTIVE DIRECTORS: R Havenstein (Chief Executive Officer), J M Halhead(British), N B Mbazima (Zambian),R G Mills, A M Thebyane, R H H van Kerckhoven (Belgian), D G Wanblad, A I Wood(British). NON-EXECUTIVE DIRECTORS: T M F Phaswana (Chairman), D D Barber, P M Baum, D A Hathorn, W A Nairn, A J Trahar, A E Redman (British). INDEPENDENT NON-EXECUTIVE DIRECTORS: T A Wixley (Deputy Chairman), C B Brayshaw,RMW Dunne, Dr. B Khumalo, T H Nyasulu. ALTERNATE DIRECTORS: A H Calver (British), R Pilkington, C B Sheppard, J GWilliams. COMPANY SECRETARY: J D Meyer. WORLD LEADER IN PLATINUM This information is provided by RNS The company news service from the London Stock Exchange