Argo Blockchai. Regulatory News (ARB)

20 Feb 2006 12:09

AFRICAN RAINBOW MINERALS LIMITED(Incorporated in the Republic of South Africa)(Reg. No. 1933/004580/06)(ISIN code: ZAE 000054045)REVIEWED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2005HIGHLIGHTS* Headline earnings increased from R19 million to R131 million* Excellent progress on Two Rivers Platinum Project* Assmang shareholders' agreement and delisting approved* Release of the 8.4 million ton per annum export BKM iron ore mine* Exploration assets outside South Africa listed through TEAL on the TorontoStock Exchange* Nkomati approved expansion from a 30 000 tpm to 100 000 tpm mine with a newconcentratorCOMMENTARYThe board of ARM is pleased to announce its interim results for the six monthsended 31 December 2005 which have been prepared in accordance withInternational Financial Reporting Standards.Headline earnings increased from R19 million for the six months to 31 December2004 to R131 million for the current reporting period. Earnings were positivelyaffected by improved results from Modikwa and not including our share ofHarmony Gold Mining Company Limited's ("Harmony") results (now accounted for asan investment), but negatively affected both by the participation in only 50%of Nkomati's earnings following the disposal of 50% to LionOre and lowerearnings from Assmang.ARM Platinum benefited from strong PGM prices with Modikwa Platinum Minereporting a significant increase in cash operating profits to R70 million (at50% ownership)(2004: R8 million). Nkomati Nickel Mine has continued with itsconsistent strong performance.Assmang Limited ("Assmang") reported a 22% decrease in headline earnings toR275 million, mainly driven by lower sales volumes and prices achieved at themanganese and chrome operations as explained below in more detail.Harmony improved its gold production by 6% to 20 316kg and reported an increasein operating profit to R389.4 million from R118.8 million for the quarter ended31 December 2005. A significant increase in the Harmony share price resulted ina stronger ARM balance sheet with investments having increased by R1.7 billionsince June 2005.Total consolidated short and long term borrowings increased from R1.6 billionon 30 June 2005 to R2.0 billion on 31 December 2005, mainly as a result ofborrowings to fund the Two Rivers Platinum Project. ARM's net debt to equityratio remains, however, at a comfortable 16%.We continued with our organic growth programme through the release, inconjunction with our partners, of two significant projects. The Two RiversPlatinum Project in the Mpumalanga Province was released in June 2005 and the8.4 million ton per annum export iron ore mine on our Bruce, King and Mokaningproperties ("the BKM Mine"), situated in the Northern Cape Province, wasreleased during January 2006.Furthermore, we have successfully completed the Dwarsrivier underground chromemine situated in Mpumalanga, ahead of schedule and below budget. In addition,the Nchwaning 3 manganese mine was completed and became fully operationalduring the period under review.The restructuring of the Assmang shareholders' agreement has been completed andthe delisting of the company has received all the necessary approvals.We have also today announced that Nkomati Nickel will increase monthlyproduction from 30 000 tons per month to 100 000 tons per month, maintainingcurrent nickel production levels.OPERATIONAL REVIEWARM FerrousThe ARM Ferrous operations which are held through its investment in Assmangconsists of three divisions namely, iron ore, manganese and chrome.Assmang reported turnover for the six months to 31 December 2005 of R1,87billion (2004: R1,89 billion). Earnings decreased by 24% to R275 million (2004:R362 million) and headline earnings decreased by 22% to R275 million (2004:R354 million).The decrease in earnings and headline earnings can be primarily attributed todecreases in sales volumes of manganese ore and charge chrome and a substantialprice decrease for manganese alloys as a result of negative market conditionsover the reporting period. Six months ended Six months ended 2005 2004 100% basis `000 '000 Percentage Assmang product volumes metric tons metric tons changesales Manganese ore* 573 766 (25) Iron ore 2 600 2 541 2 Manganese alloys 130 105 24 Charge chrome 89 104 (14) Chrome ore* 56 23 144*Excluding intra-group salesMajor capital projectsThe ARM Ferrous division through Assmang continued its capital expenditureprogramme, spending R313 million (2004: R286 million) during the period underreview. Of this, R43 million was spent on the completion of the Dwarsrivierunderground chrome mine, which commenced production well ahead of schedule andunder budget, at a total capital cost of R187 million. The Nchwaning 3manganese mine has been completed and is fully operational.During the period under review the Board of Assmang approved the first phaseconstruction of a new export iron ore mine on its Bruce, King and Mokaningproperties, ("the BKM Mine"), adjacent to Kumba's Sishen mine, near Kathu inthe Northern Cape Province. Construction of the BKM Mine will commence duringthe early part of calendar year 2006 with the first phase resulting in a new8.4 million ton per annum export iron ore mine at an estimated total capitalcost of R3.2 billion, excluding capitalised interest. First production isexpected during the first half of calendar year 2008. A second phase expansionof the BKM Mine to increase production volumes from the initial 8.4 milliontons per annum to 16.0 million tons per annum export capacity forms part of thecurrent design and incorporates some of the capital required for the firstphase. The second phase expansion, which would need further Board approval,will require a further estimated R1.8 billion to increase the capacity to 16.0million tons per annum export capacity. This second phase expansion is,however, dependant on further increases in the capacity of Transnet's Sishen/Saldanha export channel. The capital expenditure for the BKM Mine referred toabove will be funded by Assmang from internally generated cash and fundingfacilities available to Assmang.Delisting of AssmangOn 30 January 2006 minority shareholders of Assmang approved a scheme ofarrangement, in terms of Section 311 of the Companies Act No. 61 of 1973, asamended, in terms of which Assore Limited ("Assore") will acquire all theshares in the issued ordinary share capital of Assmang, other than thosealready held by ARM and Assore. The High Court of South Africa ( WitwatersrandLocal Division) sanctioned the abovementioned scheme on 7 February 2006.The effect of this transaction will be that ARM and Assore will each hold a 50%interest in Assmang and will control the company jointly. Assmang's listing onthe JSE Limited is expected to be terminated on or about 28 February 2006.ARM PlatinumThe ARM Platinum division consists of an effective interest of 41.5% in ModikwaPlatinum Mine, 50% in the Nkomati Nickel Mine, 55% in the Two Rivers PlatinumProject, 50% in the Nkomati Nickel Expansion Project and 90% in KalplatsExploration.Modikwa Platinum MineModikwa, which remains in a build-up phase, has made significant progress inchanging the mining method from down dip mining with reef drives to breast(strike) mining with footwall drives . Production capacity has been increasedthrough the improved development rate and the mine is expected to reach designcapacity during the next reporting period.The improved metals basket price has resulted in a cash operating profit of R70Million (at 50% ownership) (2004: R8 million) for the six months under review. Six months ended Six months ended Modikwa ‚­ 100% basis 31 December 31 December Percentage 2005 2004 change Tons milled million tons 1.29 1.14 13 Head grade (4E) g/t 4.15 4.35 (5) Platinum in concentrate 65 445 60 000 9ounces Cash cost R/ton 373 373 ‚­ Cash cost R/Pt oz 7 349 7 067 (4) Capex R million 60 54 11Nkomati Nickel MineThe Nkomati Nickel Mine again reported consistent, high earnings. Nkomaticontinues to mine from various ore bodies and during the past period 23% of therun of mine tons comprised of MMZ, the ore body targeted for the ExpansionProject. Following the sale of 50% of Nkomati Nickel Mine ("Nkomati") toLionOre, effective 31 May 2005, results for this reporting period will reflect50% of the profits from this operation whereas in the comparative six monthperiod the Nkomati profits were accounted for on a 100% basis.The mine has again had an excellent performance over the last six months, withcontribution to earnings of R52 million at 50% ownership (R103 million at 100%ownership). Six months ended Six months ended Nkomati ‚­ 100% basis 31 December 31 December 2005 2004 Cash operating profit R million 195 178 Tons milled (`000) 182 184 Nickel head grade (% nickel) 1.97 1.94 On-mine cash cost per tons treated (R/ 508 426ton) Cash cost (net of by-products) US$/lb. 0.87 1.32 Market sales Nickel tons 2 534 2 585 Copper tons 1 485 1 693 Cobalt tons 42 49 PGMs ounces 16 431 21 502Nkomati Nickel Expansion ProjectThe current MSB orebody will be depleted during 2008. The Joint Venturepartners have approved the construction of a new 100 000 tons per month(increasing from the current 30 000 tons per month) concentrator plant andrelevant infrastructure to mine the MMZ ore body and maintain the current metalproduction of 5 000 tons nickel per annum in concentrate. Mining will takeplace from the current underground infrastructure as well as from two open pitsover a 10-year period. The estimated capital cost is R384 million andconstruction will span 18 months to full production. The above forms part ofthe expansion project currently under review.Two Rivers Platinum ProjectThe 220 000 oz PGMs per annum Two Rivers Platinum Project was officiallyreleased for construction on 1 June 2005. Of the R1,3 billion estimated capitalexpenditure, project finance of R700 million has been secured with the balanceof the funding being contributed by the two partners (ARM 55% and Implats 45%).The overall project progress to completion remains on plan at 60% complete andcapital expenditure is forecasted to be within budget. The mining stockpile nowexceeds 600 000 tons as mining ramp up progresses. The concentrator plant willbe commissioned during the second half of this calendar year.Kalplats PGM Exploration ProjectARM and joint venture partner, Platinum Australia Limited, are progressing withexploration and feasibility work to determine the viability of Kalplats, theresults of which are expected during the next six months.TEAL Exploration & Mining Incorporated ("TEAL")TEAL is a mineral development and exploration company that is currently focusedon development projects with properties located in Zambia, Namibia and theDemocratic Republic of Congo. TEAL completed its listing on the Toronto StockExchange on 15 November 2005, raising US$33,3 million in order to furtherprogress its projects and properties. At listing, ARM diluted its holding to65% resulting in an exceptional profit of R133 million.The progress being made at the Mwambashi Copper Project remains encouraging. Itis expected that by the end of the 2006 calendar year, TEAL will have completedthe necessary permitting requirements , finalised marketing and off-takearrangements; mine site establishment will be concluded and open-pit miningwill have commenced. This is expected to enable the build-up to full productionduring the first-half of the 2007 calendar year.As disclosed at the time of the Initial Public Offering a secondary listing ofTEAL's Common Shares on the JSE Limited is expected to be completed within thenext two months.SAFETY AND HEALTHSafetyOur continued focus on safety at all levels within the company is yieldingpositive results. Our quarter-on-quarter safety performance also showedsignificant improvement, with the LDIFR dropping from 7.5 in the first quarterto 6.1 in the second quarter. During December 2005, our Beeshoek andDwarsrivier mines completed 3 000 and 1 308 fatality free production shifts,respectively.EnvironmentWe are pleased to announce that, during January 2006, the Cato Ridge Worksoperation received ISO 14001 certification. Presently, most operations areaccredited for either ISO 14001, 9001 and/or 18001.OutlookThe results as reported further demonstrate the continued benefit to ARMthrough its diversified commodity portfolio. Most commodity prices are expectedto remain at similar, or slightly lower, levels in US$ terms for the remainderof the year. We do not expect the United States Dollar : South African Randexchange rate to be materially different from current levels. As a result ouroperations continue to strive for increased efficiencies and lower costs inorder to retain competitiveness.Having made good progress in the release and development of our projects, ARMis well- positioned to meet its growth strategy of doubling production in keycommodities by year 2010.DividendsThe company is currently involved in a high expansion phase with a significantand exciting project pipeline as well as a number of other growthopportunities. As a result the Board of Directors has decided to conserveresources and not to declare a dividend for the six months ended 31 December2005.Review by independent auditorsThe financial information has been reviewed by Ernst & Young whose unqualifiedreview opinion is available for inspection at the company's registered office.Signed on behalf of the board:P T Motsepe A J Wilkens Executive Chairman Chief Executive Officer Johannesburg17 February 2006GROUP BALANCE SHEETSat 31 December 2005 Reviewed Unaudited Audited at 31 December at 30 June 2005 2004 2005 Restated Restated Notes Rm Rm Rm ASSETS Non-current assets Property, plant and equipment 5 529 4 903 5 025 Intangible assets 4 6 5 Deferred tax assets 69 7 68 Environmental rehabilitation 29 29 29trust funds Loans and long-term receivables 8 ‚­ ‚­ Investments 4 5 404 3 261 3 708 11 043 8 206 8 835 Current assets Inventories 1 317 1 210 1 144 Trade and other receivables 1 166 1 073 1 528 Cash and cash equivalents 494 225 259 2 977 2 508 2 931 Total assets 14 020 10 714 11 766 EQUITY AND LIABILITIES Capital and reserves Ordinary share capital 10 10 10 Share premium 3 511 3 496 3 497 Other reserves 686 (1 168) (772) Retained earnings 4 020 3 552 3 776 Shareholders' interest in 8 227 5 890 6 511capital and reserves Minority interest 1 604 1 494 1 461 Total shareholders' interest 9 831 7 384 7 972 Non-current liabilities Long-term borrowings 5 1 342 787 962 Deferred tax liabilities 1 106 758 814 Long-term provisions 208 159 190 2 656 1 704 1 966 Current liabilities Trade and other payables 637 583 861 Provisions 35 36 51 Taxation 170 174 304 Overdrafts and short-term 5 691 833 612borrowings 1 533 1 626 1 828 Total equity and liabilities 14 020 10 714 11 766GROUP INCOME STATEMENTSfor the six months ended 31 December 2005 Reviewed Unaudited Audited Six months Six months Year ended ended ended 31 December 31 December 30 June 2005 2004 2005 Restated Restated Note Rm Rm Rm Revenue 2 348 2 391 5 485 Cost of sales (1 702) (1 618) (3 743) Gross profit 646 773 1 742 Other operating income 115 27 273 Other operating expenses (263) (168) (419) Retrenchment cost ‚­ (7) (8) Profit from operations before 498 625 1 588exceptional items Income from investments 10 12 22 Finance costs (81) (98) (172) Loss from associate ‚­ (138) (150) Profit before taxation and 427 401 1 288exceptional items Exceptional items 6 116 284 155 Profit before taxation 543 685 1 443 Taxation (166) (285) (530) Profit for period 377 400 913 Attributable to: Minority interest 130 161 451 Equity holders of the parent 247 239 462 377 400 913 Additional information Headline earnings (R million) 131 19 339 Headline earnings per share 64 9 166(cents) Basic attributable earnings per 121 117 226share (cents) Fully diluted attributable 120 117 226earnings per share (cents) Fully diluted headline earnings 64 9 166per share (cents) Number of shares in issue at end 204 864 204 391 204 437of period (thousands) Weighted average number of 204 724 204 313 204 370shares in issue (thousands) Weighted average number of shares used in calculating fully 205 810 204 619 204 794diluted earnings per share (thousands) Net asset value per share 4 016 2 882 3 185(cents) STATEMENTS OF CHANGES IN EQUITYfor the six months ended 31 December 2005 Share Revaluation capital and Minority of listed premium interest investments Rm Rm Rm Six months ended 31 December 2005 (Reviewed) Balance at 30 June 2005 as previously reported 3 507 1 461 (821) Basic earnings ‚­ ‚­ ‚­ Share options exercised 14 ‚­ ‚­ Revaluation of listed investments ‚­ ‚­ 1 696 Deferred tax on revaluation of ‚­ ‚­ (247)listed investments Translation reserve on translation ‚­ ‚­ ‚­of subsidiary Share-based payments (IFRS 2 ‚­ ‚­ ‚­adjustment) Teal Limited minorities ‚­ 73 ‚­ Minority interest in earnings ‚­ 130 ‚­ Dividend paid to minorities ‚­ (60) ‚­ Other ‚­ ‚­ ‚­ Balance at 31 December 2005 3 521 1 604 628 Six months ended 31 December 2004 (Unaudited) Restated Balance at 30 June 2004 as previously reported 3 505 1 326 ‚­ Basic earnings ‚­ ‚­ ‚­ Revaluation of listed investments ‚­ ‚­ (1 423) Deferred tax of revaluation of ‚­ ‚­ 216listed investments Share of associate other reserves ‚­ ‚­ ‚­ Share-based payments (IFRS 2 ‚­ ‚­ ‚­adjustment) Share options exercised 1 ‚­ ‚­ Minority interest in earnings ‚­ 161 ‚­ Dividend paid to minorities ‚­ (13) ‚­ Re-allocation risk funding: Two Rivers ‚­ 20 ‚­ Other ‚­ ‚­ ‚­ Balance at 31 December 2004 3 506 1 494 (1 207) Year ended 30 June 2005 (Audited) Restated Balance at 30 June 2004 as previously reported 3 505 1 326 ‚­ Basic earnings as previously stated ‚­ ‚­ ‚­ Revaluation of listed investments ‚­ ‚­ (962) Deferred tax on revaluation of ‚­ ‚­ 141listed investments Reversal of associate's other ‚­ ‚­ ‚­reserves Share options exercised 2 ‚­ ‚­ Share-based payments (IFRS 2 ‚­ ‚­ ‚­adjustment) Realisation of land and buildings ‚­ ‚­ ‚­ Minority interest in earnings ‚­ 451 ‚­ Dividend paid to minorities ‚­ (45) ‚­ Re-allocation risk funding: Two ‚­ (271) ‚­Rivers Other ‚­ ‚­ ‚­ Balance at 30 June 2005 3 507 1 461 (821) Retained Other earnings Total Rm Rm Rm Six months ended 31 December 2005 (Reviewed) Balance at 30 June 2005 as previously reported 49 3 776 7 972 Basic earnings ‚­ 247 247 Share options exercised ‚­ ‚­ 14 Revaluation of listed investments ‚­ ‚­ 1 696 Deferred tax on revaluation of ‚­ ‚­ (247)listed investments Translation reserve on translation (6) ‚­ (6)of subsidiary Share-based payments (IFRS 2 14 ‚­ 14adjustment) Teal Limited minorities ‚­ ‚­ 73 Minority interest in earnings ‚­ ‚­ 130 Dividend paid to minorities ‚­ ‚­ (60) Other 1 (3) (2) Balance at 31 December 2005 58 4 020 9 831 Six months ended 31 December 2004 (Unaudited) Restated Balance at 30 June 2004 as previously reported (193) 3 316 7 954 Basic earnings ‚­ 239 239 Revaluation of listed investments ‚­ ‚­ (1 423) Deferred tax of revaluation of ‚­ ‚­ 216listed investments Share of associate other reserves 235 ‚­ 235 Share-based payments (IFRS 2 1 ‚­ 1adjustment) Share options exercised ‚­ ‚­ 1 Minority interest in earnings ‚­ ‚­ 161 Dividend paid to minorities ‚­ ‚­ (13) Re-allocation risk funding: Two ‚­ ‚­ 20Rivers Other (4) (3) (7) Balance at 31 December 2004 39 3 552 7 384 Year ended 30 June 2005 (Audited) Restated Balance at 30 June 2004 as previously reported (193) 3 316 7 954 Basic earnings as previously stated ‚­ 462 462 Revaluation of listed investments ‚­ ‚­ (962) Deferred tax on revaluation of ‚­ ‚­ 141listed investments Reversal of associate's other 235 ‚­ 235reserves Share options exercised ‚­ ‚­ 2 Share-based payments (IFRS 2 11 ‚­ 11adjustment) Realisation of land and buildings (6) ‚­ (6) Minority interest in earnings ‚­ ‚­ 451 Dividend paid to minorities ‚­ ‚­ (45) Re-allocation risk funding: Two ‚­ ‚­ (271)Rivers Other 2 (2) ‚­ Balance at 30 June 2005 49 3 776 7 972GROUP CASH FLOW STATEMENTSfor the six months ended 31 December 2005 Reviewed Unaudited Audited Six months Six months Year ended ended ended 31 December 31 December 30 June 2005 2004 2005 Rm Rm Rm CASH FLOW FROM OPERATING ACTIVITIES Cash receipts from customers 2 799 2 574 5 297 Cash paid to suppliers and (2 133) (1 966) (3 636)employees Cash generated from operations 666 608 1 661 Interest received 10 12 22 Interest paid (81) (105) (183) ‚­ Dividends received 19 19 Dividends paid to minorities (60) (13) (45) Taxation paid (256) (55) (168) Net cash inflow from operating 279 466 1 306activities CASH FLOW FROM INVESTING ACTIVITIES Additions to fixed assets to (391) (349) (705)maintain operations Additions to fixed assets to expand (303) (92) (297)operations Proceeds on disposal of property 2 50 39plant and equipment Proceeds on disposal of investments ‚­ 9 Increase in loans and long-term (8) ‚­ ‚­receivable Net cash effect on disposal of 50% ‚­ 136 ‚­of Nkomati mine Investments acquired ‚­ (8) Net cash outflow from investing (700) (391) (826)activities CASH FLOW FROM FINANCING ACTIVITIES Proceeds on exercise of share 14 1 2options Funding received from minority 47 21 ‚­shareholders Investment by minority shareholders 215 ‚­ ‚­ Long-term borrowings raised 391 30 110 Long-term borrowings repaid (135) (94) (215) Increase/(Decrease) in short-term 129 (136) (446)borrowings Net cash inflow/(outflow) from 661 (178) (549)financing activities Net increase/(decrease) in cash and 240 (103) (69)cash equivalents Effects of exchange rate changes (5) ‚­ ‚­ Cash and cash equivalents at 259 328 328beginning of period Cash and cash equivalents at end of 494 225 259period Cash generated from operations per 325 298 813share (cents) NOTES TO THE FINANCIAL STATEMENTSfor the six months ended 31 December 20051. BASIS OF PREPARATIONThe reviewed results for the half-year have been prepared in accordance withInternational Financial Reporting Standards ("IFRS") on a historical cost basisexcept for certain derivative financial instruments that have been measured atfair value.The financial information for the half-year ended 31 December 2005 has beenprepared adopting the same accounting policies used in the most recent annualfinancial statements, except for the adoption of the new statement IFRS 2 ‚­share- based payments.As a result the previously reported results for the half-year ended 31 December2004 and the year ended 30 June 2005 have been restated as is more fullyexplained below.These consolidated financial statements are prepared in accordance with IAS 34‚­ interim financial reporting.2. IMPLICATIONS OF ADOPTING IFRS 2 ‚­ SHARE-BASED PAYMENTSThe group grants share options to employees under employee share incentiveschemes. In accordance with the requirements of IFRS 2, the group nowrecognises an expense in the income statement with a corresponding credit toequity. The fair value at the date of granting the options is charged to incomeon a straight-line basis over the relevant option vesting periods, adjusted toreflect actual and expected levels of vesting.This new statement has been applied retrospectively by the group and results ina restatement of prior year financial information.This statement becomes effective for the ARM group for the financial yearending 30 June 2006.The prior and current reporting period adjustments are:‚­ Half-year ended 31 December 2005: R14 million ‚­ charge to income statement.‚­ Financial year ended 30 June 2005: R11 million ‚­ charge to income statementand restatement of comparatives.- Half-year ended 31 December 2004: R1 million ‚­ charge to income statement andrestatement of comparatives.NOTES TO THE FINANCIAL STATEMENTSfor the six months ended 31 December 2005 Reviewed Unaudited Audited Six months ended Six months Year ended ended 31 December 31 December 30 June 2005 2004 2005 Restated Restated Rm Rm Rm 3. INVESTMENT IN ASSOCIATE Opening balance - 4 338 4 338 Movement for period - (138) 329 Transfer to investments - (4 200) (4 667) Closing balance ‚­ ‚­ ‚­ The investment in Harmony has been accounted for as an associate from the date of acquisition to 30 November 2004 which was the date when the ARM interest diluted to 16.19% following the new share issue by Harmony to certain Gold Fields shareholders. 4. INVESTMENTS Listed Opening balance 3 708 3 3 Transfer from associates - 4 200 4 667 Unrealised fair value adjustment 1 696 (1 207) (962) Realisation of unrealised profit on sale of Avgold - 265 ‚­ Total carrying amount of 5 404 3 261 3 708investments 5. BORROWINGS Long-term borrowings are held as follows: ‚­ African Rainbow Minerals Limited 225 212 130 ‚­ Assmang Limited 13 14 13 ‚­ ARM Platinum (Proprietary) 459 561 465Limited ‚­ Two Rivers Platinum 645 ‚­ 354(Proprietary) Limited 1 342 787 962 Overdrafts and short-term borrowings are held as follows: ‚­ African Rainbow Minerals Limited 309 109 249 ‚­ Assmang Limited 225 567 161 ‚­ ARM Platinum (Proprietary) 148 157 202Limited ‚­ Two Rivers Platinum 9 ‚­ ‚­(Proprietary) Limited 691 833 612 Total borrowings 2 033 1 620 1 574Interest of R14 million was capitalised for the half-year ended 31 December2005 (31 December 2004: R1 million, 30 June 2005: R7 million).NOTES TO THE FINANCIAL STATEMENTSfor the six months ended 31 December 2005 Reviewed Unaudited Audited Six months ended Six months Year ended ended 31 December 31 December 30 June 2005 2004 2005 Restated Restated Rm Rm Rm 6. EXCEPTIONAL ITEMS Profit on disposal of Avgold - 265 265(associate) Profit on sale of property plant 13 ‚­ and equipment Impairment of property, plant and (12) ‚­ (35)equipment Loss on disposal of 50 per cent of ‚­ ‚­ (82)Nkomati mine Profit on dilution in subsidiary 133 ‚­ ‚­ Other (5) 6 7 Exceptional items per income 116 284 155statement Taxation ‚­ (66) (41) Minority interest ‚­ (4) 5 Profit on sale of property, plant ‚­ and equipment in associates 6 4 Net exceptional items 116 220 123 7. HEADLINE EARNINGS Basic earnings per income 247 239 462statement Loss on sale of Chambishi ‚­ ‚­ (7)(subsidiary) Impairment of property, plant and 12 ‚­ 35equipment (Profit)/Loss on sale of property - (13) 6plant and equipment Profit on sale of property, plant (6) (4) and equipment in associate Loss on disposal of 50 per cent of ‚­ ‚­ 82Nkomati mine Profit on disposal of Avgold (265) (265) (associate) Profit on dilution in subsidiary (133) ‚­ ‚­ Loss on dilution of associate - ‚­ 2 Other 5 (6) (8) 131 (51) 303 Taxation ‚­ 66 41 Minority interest ‚­ 4 (5) Headline earnings 131 19 339 8. COMMITMENTS AND CONTINGENT LIABILITIES Commitments in respect of future capital expenditure which will be funded from cash generated and available borrowing resources are summarised below: Approved by directors ‚­ contracted for 689 160 251 ‚­ not contracted for 801 326 272 Total commitments 1 490 486 523Contingent liabilitiesShareholders are advised that there have been no significant changes to thecontingent liabilities of the group as disclosed in the June 2005 annualreport.NOTES TO THE FINANCIAL STATEMENTSfor the six months ended 31 December 2005 ARM Platinum Division Ferrous Gold Platinum Nickel metals Rm Rm Rm Rm 9. SEGMENTAL INFORMATION Primary segmental information Six months ended 31 December 2005 (Reviewed) Revenue External revenue ‚­ 309 169 1 870 Cost of sales ‚­ (292) (95) (1 315) Other operating income per income ‚­ ‚­ 21 16statement Insurance premiums written ‚­ ‚­ ‚­ ‚­non-Group companies Other operating income ‚­ ‚­ 21 16 Reinsurance premiums non-Group ‚­ ‚­ ‚­ ‚­companies Other operating expenses ‚­ (1) (22) (126) Segment result ‚­ 16 73 445 Income from investments ‚­ 1 1 1 Finance cost ‚­ (45) ‚­ (16) Exceptional items ‚­ ‚­ ‚­ ‚­ Taxation ‚­ 8 (22) (155) Minority interest ‚­ 3 ‚­ (137) Contribution to earnings ‚­ (17) 52 138 Contribution to headline earnings ‚­ (17) 52 138 Other information Segment assets 5 401 2 707 272 5 089 Taxation ‚­ ‚­ ‚­ ‚­ Consolidated total assets ‚­ ‚­ ‚­ ‚­ Segment liabilities ‚­ 1 390 17 738 Taxation ‚­ ‚­ ‚­ ‚­ Consolidated total liabilities ‚­ ‚­ ‚­ ‚­ Cash in /(out) flow from ‚­ (10) 22 214operating activities Cash in/(out) flow from investing ‚­ (368) (12) (318)activities Cash inflow from financing ‚­ 213 ‚­ 65activities Capital expenditure ‚­ 395 14 313 Amortisation and depreciation ‚­ 50 22 148 Corpo- Explo- rate and ration other Total Rm Rm Rm 9. SEGMENTAL INFORMATION Primary segmental information Six months ended 31 December 2005 (Reviewed) Revenue External revenue ‚­ ‚­ 2 348 Cost of sales ‚­ ‚­ (1 702) Other operating income per income ‚­ 78 115statement Insurance premiums written ‚­ 59 59non-Group companies Other operating income ‚­ 19 56 Reinsurance premiums non-Group ‚­ (57) (57)companies Other operating expenses (10) (47) (206) Segment result (10) (26) 498 Income from investments 1 6 10 Finance cost ‚­ (20) (81) Exceptional items ‚­ 116 116 Taxation ‚­ 3 (166) Minority interest 4 ‚­ (130) Contribution to earnings (5) 79 247 Contribution to headline earnings (5) (37) 131 Other information Segment assets 214 268 13 951 Taxation ‚­ ‚­ 69 Consolidated total assets ‚­ ‚­ 14 020 Segment liabilities 10 758 2 913 Taxation ‚­ ‚­ 1 276 Consolidated total liabilities ‚­ ‚­ 4 189 Cash in /(out) flow from operating 2 51 279activities Cash in/(out) flow from investing (3) 1 (700)activities Cash inflow from financing 216 167 661activities Capital expenditure ‚­ ‚­ 722 Amortisation and depreciation ‚­ ‚­ 220NOTES TO THE FINANCIAL STATEMENTSfor the six months ended 31 December 2005 ARM Platinum Division Ferrous Gold Platinum Nickel metals Rm Rm Rm Rm 9. SEGMENTAL INFORMATION (continued) Six months ended 31 December 2004 (Unaudited) Restated* Revenue External revenue ‚­ 195 309 1 887 Cost of sales ‚­ (246) (145) (1 227) Other operating income ‚­ ‚­ 9 8 Other operating expenses ‚­ (2) (32) (100) Segment result ‚­ (53) 141 568 Income from investments ‚­ 1 1 1 Finance cost ‚­ (52) ‚­ (33) Loss from associate (138) ‚­ ‚­ ‚­ Exceptional items ‚­ ‚­ ‚­ 8 Taxation ‚­ 25 (39) (182) Minority interest ‚­ 18 ‚­ (179) Contribution to earnings (138) (61) 103 183 Contribution to headline earnings (144) (61) 103 179 Other information Consolidated total assets 3 258 2 085 535 4 520 Consolidated total liabilities ‚­ 862 173 1 705 Cash in/(out) flow from operating ‚­ (106) 140 485activities Cash outflow from investing ‚­ (107) (12) (267)activities Cash in/(out) flow from financing ‚­ (43) ‚­ (170)activities Capital expenditure ‚­ 107 12 286 Amortisation and depreciation ‚­ 31 13 121 Corpo- Explo- rate and ration other Total Rm Rm Rm 9. SEGMENTAL INFORMATION (continued) Six months ended 31 December 2004 (Unaudited) Restated* Revenue External revenue ‚­ ‚­ 2 391 Cost of sales ‚­ ‚­ (1 618) Other operating income ‚­ 10 27 Other operating expenses ‚­ (41) (175) Segment result ‚­ (31) 625 Income from investments ‚­ 9 12 Finance cost ‚­ (13) (98) Loss from associate ‚­ ‚­ (138) Exceptional items ‚­ 276 284 Taxation ‚­ (89) (285) Minority interest ‚­ ‚­ (161) Contribution to earnings ‚­ 152 239 Contribution to headline earnings ‚­ (58) 19 Other information Consolidated total assets ‚­ 316 10 714 Consolidated total liabilities ‚­ 590 3 330 Cash in/(out) flow from operating ‚­ (53) 466activities Cash outflow from investing ‚­ (5) (391)activities Cash in/(out) flow from financing ‚­ 35 (178)activities Capital expenditure ‚­ 36 441 Amortisation and depreciation ‚­ 1 166NOTES TO THE FINANCIAL STATEMENTSfor the six months ended 31 December 2005 ARM Platinum Division Ferrous Gold Platinum Nickel metals Rm Rm Rm Rm 9. SEGMENTAL INFORMATION (continued) Year ended 30 June 2005 (Audited) Restated* Revenue External revenue ‚­ 456 623 4 406 Cost of sales ‚­ (532) (295) (2 916) Other operating income per income ‚­ ‚­ 46 166statement Insurance premiums written ‚­ ‚­ ‚­ ‚­non-Group companies Other operating income ‚­ ‚­ 46 166 Reinsurance premiums non-Group ‚­ ‚­ ‚­ ‚­companies Exploration ‚­ ‚­ ‚­ ‚­ Other operating expenses ‚­ (7) (63) (193) Segment result ‚­ (83) 311 1 463 Income from investments ‚­ 2 2 2 Finance cost ‚­ (104) ‚­ (41) Loss from associate (150) ‚­ ‚­ ‚­ Exceptional items (2) ‚­ ‚­ (10) Taxation ‚­ 66 (94) (465) Minority interest ‚­ 20 ‚­ (471) Contribution to earnings (152) (99) 219 478 Contribution to headline earnings (155) (99) 219 480 Other information Segment assets 3 706 2 295 269 5 069 Taxation ‚­ ‚­ ‚­ ‚­ Consolidated total assets 3 706 2 295 269 5 069 Segment liabilities ‚­ 1 138 17 790 Taxation ‚­ ‚­ ‚­ ‚­ Consolidated total liabilities ‚­ ‚­ ‚­ ‚­ Cash in/(out) flow from operating ‚­ (179) 304 1 307activities Cash in/(out) flow from investing ‚­ (265) (20) (655)activities Cash in/(out) flow from financing ‚­ (30) ‚­ (577)activities Capital expenditure ‚­ 280 20 699 Amortisation and depreciation ‚­ 85 54 285 Corpo- Explo- rate and ration other Total Rm Rm Rm 9. SEGMENTAL INFORMATION (continued) Year ended 30 June 2005 (Audited) Restated* Revenue External revenue ‚­ ‚­ 5 485 Cost of sales ‚­ ‚­ (3 743) Other operating income per income ‚­ 61 273statement Insurance premiums written non-Group ‚­ 55 55companies Other operating income ‚­ 6 218 Reinsurance premiums non-Group ‚­ (59) (59)companies Exploration ‚­ (25) (25) Other operating expenses ‚­ (80) (343) Segment result ‚­ (103) 1 588 Income from investments ‚­ 16 22 Finance cost ‚­ (27) (172) Loss from associate ‚­ ‚­ (150) Exceptional items ‚­ 167 155 Taxation ‚­ (37) (530) Minority interest ‚­ ‚­ (451) Contribution to earnings ‚­ 16 462 Contribution to headline earnings ‚­ (106) 339 Other information Segment assets ‚­ 359 11 698 Taxation ‚­ 68 68 Consolidated total assets ‚­ 427 11 766 Segment liabilities ‚­ 731 2 676 Taxation ‚­ ‚­ 1 118 Consolidated total liabilities ‚­ ‚­ 3 794 Cash in/(out) flow from operating ‚­ (126) 1 306activities Cash in/(out) flow from investing ‚­ 114 (826)activities Cash in/(out) flow from financing ‚­ 58 (549)activities Capital expenditure ‚­ 38 1 037 Amortisation and depreciation ‚­ 2 426CONTACT DETAILS AND ADMINISTRATIONRegistered officeARM House29 Impala RoadChislehurstonSandton 2146PO Box 786136Sandton, 2146Telephone: +27 11 779 1300Telefax: +27 11 779 1312E-mail: ir.admin@arm.co.zaWebsite: http://www.arm.co.zaInvestor relationsPieter RorichExecutive: Corporate DevelopmentTelephone: +27 11 779 1476pieter.rorich@arm.co.zaCorne BobbertCorporate DevelopmentTelephone: +27 11 779 1478corne.bobbert@arm.co.zaPortia SebulelaInvestor Relations OfficerTelephone: +27 11 779 1300portia.sebulela@arm.co.zaCompany secretaryAnnamarie van der MerweTelephone: +27 11 779 1480annamarie.vdmerwe@arm.co.zaUnited Kingdom SecretariesSt James's Corporate Services Limited6 St James's PlaceLondon SW1A 1NPTelephone: +44 20 7499 3916Telefax: +44 20 7491 1989Transfer secretariesSouth AfricaComputershare Investor ServicesGround Floor, 70 Marshall StreetJohannesburg 2001PO Box 61051Marshalltown, 2107Telephone: +27 11 370 5000Telefax: +27 11 688 5222United KingdomCapita RegistrarsThe Registry34 Beckenham RoadBeckenhamKent BR34TUTelephone: +44 870 162 3100Telefax: +44 20 8658 3430African Rainbow Minerals Limited(Incorporated in the Republic of South Africa)(Reg. No. 1933/004580/06)(ISIN code: ZAE 000054045)DirectorsP T Motsepe (Executive Chairman)R P Menell (Deputy Chairman)A J Wilkens (Chief Executive Officer)F AbbottDr M M M Bakane-Tuoane**J A Chissano (Mozambican)**W M GuleM W King**A K Maditsi**J R McAlpine**Dr P S Sibisi**Dr R V Simelane**M V Sisulu**J C SteenkampZ B Swanepoel*(*Non-executive**Independent non-executive)ENDAFRICAN RAINBOW MINERALS LTD