Lonmin Regulatory News (LMI)

14 November 2016

Fourth Quarter 2016 Production Report

Lonmin Plc ("Lonmin" or "the Company"), one of the world's largest primary platinum producers, today announces its production results for the quarter ended 30 September 2016. Lonmin also publishes today, in a separate announcement, its final results for the year ended 30 September 2016.

Safety

· Our safety strategy is centred on the belief that Zero Harm is achievable and important contributions are required from all stakeholders to achieve it.

· The twelve month rolling LTIFR to 30 September improved by 8.1% to 4.97 per million man hours from 5.41 in the prior year.

· K3 shaft achieved 6 million fatality free shifts.

· 4B shaft achieved 10 million fatality free shifts and won the JT Ryan Safety Award for the fourth consecutive year.

· Saffy shaft achieved 3 million fatality free shifts on 13 April 2016.

· We remain focused on addressing the root causes of safety incidents, and ensuring that lessons learnt from each incident are implemented into action plans and shared across operations.

· We have been encouraged that our collaboration with key stakeholders, including the Department of Mineral Resources (DMR) and The Association of Mineworkers and Construction Union (AMCU), continues to yield results, as we have experienced decreasing Section 54 stoppages in the quarter.

Mining Operations

The Marikana mining operations (including Pandora) produced 2.7 million tonnes during the quarter as planned, a decrease of 10.1% or 298,000 tonnes on the prior year period, reflecting the planned decrease in production from the Generation 1 shafts in line with our strategy to reduce high cost production in a low price environment.

Generation 2 shafts

Production from our core Generation 2 shafts (K3, Rowland, Saffy and 4B/1B) was 2.1 million tonnes, broadly flat on the fourth quarter of 2015 production of 2.2 million tonnes and accounted for 80% of total tonnes mined, emphasizing our continued focus on these core shafts. Productivity at our Generation 2 shafts at 6.1 square metres per mining employee for the quarter improved by 1.6% on the fourth quarter of 2015. The improved productivity and reduced Section 54 stoppages were offset by the decrease in tonnes from K3 shaft.

· Saffy shaft produced 547,000 tonnes, an increase of 10.6% on the fourth quarter of 2015 as this shaft is now running at full production and continues to perform well.

· Rowland shaft produced 487,000 tonnes, an increase of 3.5% on the fourth quarter of 2015.

· 4B/1B shaft produced 397,000 tonnes, a decrease of 41,000 tonnes or 9.4% on the fourth quarter of 2015, as a result of the planned closure of 1B shaft in October 2015. Excluding the 59,000 tonnes produced by 1B in the fourth quarter of 2015, 4B production increased by 4.8%.

· K3 shaft produced 708,000 tonnes, a decrease of 8.4% on the fourth quarter of 2015. The decrease is due to the slow build-up of stoping crews due to restructuring and geological challenges in the split reef area.

Generation 1 shafts

In line with the Group's rationalisation of high cost ounces, production from our Generation 1 shafts (Hossy, Newman, W1, E1, E2, E3 and Pandora (100%)) at 485,000 tonnes was 32.5% lower than the fourth quarter of 2015. Some of these shafts are run by contractors, which provide better flexibility to retain or close them, depending on their profit contribution to the Company.

The Merensky opencast operations, which produced 59,000 tonnes in the fourth quarter of 2015 ceased at the end of the financial year 2015. Mining of the U12 UG2 pit commenced in July 2016 and produced 39,000 for the quarter, but this is a very small resource and it is expected that mining will stop during the course of 2017.

Production Losses

Following ongoing and pro-active interactions with the Inspectorate of the DMR, and as shaft management develop a better understanding and working relationship with the Inspectorate and with the Union, we are experiencing a reduction in the duration and frequency of Section 54 stoppages and more localised application of the stoppages. A total of some 95,000 tonnes of production was lost in the quarter due to Section 54 safety stoppages and management induced safety stoppages compared to 297,000 tonnes in the fourth quarter of 2015.

Process Operations

Milling production in the quarter of 2.8 million tonnes was affected by lower than planned ore availability from the mining operations and was higher than tonnes mined of 2.7 million tonnes due to available above ground ore stocks, but 5.3% lower than in the fourth quarter of 2015.

Underground milled head grade at 4.59 grammes per tonnes (5PGE+Au) increased by 2.6% when compared to the 4.47 grammes per tonne achieved in the fourth quarter of 2015 and the overall milled head grade was 4.59 grammes per tonne, up 3.2% on the prior year period due to improved ore mix and also improved mining head grades.

Platinum production (Metals-in-Concentrate) was 182,612 ounces, which was 1.6% lower than the fourth quarter of 2015 notwithstanding the lower milled volumes of 5.3%, due to the higher mill head grade. The Metals-in-Concentrate were only 2.6% lower than the fourth quarter of 2015 due to the higher grade and ore mix.

Concentrator recoveries in the quarter were 86.0%, marginally down from 86.4% in the fourth quarter of 2015, due to the milling of opencast UG2 ore.

Total refined Platinum production at 219,493 ounces was 14.3% lower than the fourth quarter of 2015, due to the release of built-up stock following the smelter outages but higher than the Metals-in-Concentrate of 182,612 Platinum ounces. Total PGMs produced were 424,613 ounces, a decrease of 14.2% on the fourth quarter of 2015, but higher than the Metals-in-Concentrate of 345,630 ounces. Refined production benefited from the smelter clean-up project, which released 36,881 Platinum ounces during the quarter. The smelter clean-up project is expected to continue into the first half of the 2017 financial year.

The Other Precious Metals Plant, which was commissioned in the first half of 2016, increased the production of Rhodium (released 7,021 ounces) and Iridium (released 5,318 ounces) due to a stock release arising from a reduction in the time to recover metals.

Sales & Pricing

Platinum sales for the quarter were 211,140 ounces, a decrease of 16.8% compared with the fourth quarter of 2015, when the refined production was extremely high due to the release of built-up stock following the smelter outages during 2015. PGM sales were 390,743 ounces, down 18.9% on the comparatively high the fourth quarter of 2015 sales.

The US Dollar basket price (including base metal revenue) at $902 per ounce during the quarter was up 12.0% on the fourth quarter of 2015 while the corresponding Rand basket price (R12,663 per ounce) was 22.5% higher than the prior year period, benefiting from the Rand weakness. The average Rand to US Dollar exchange rate was 8.2% weaker at 14.06 compared to 13.00 in the fourth quarter of 2015.

Net cash at the end of the quarter increased to $173 million and total liquidity improved to $537 million.

- ENDS -

ENQUIRIES

Investors / Analysts:

Lonmin

Tanya Chikanza (Head of Investor Relations) +27 11 218 8358 /+44 207 201 6007

Andrew Mari (Investor Relations Manager) +27 11 218 8420

Media:

Wendy Tlou +27 83 301 9663

Cardew Group +44 207 930 0777

Anthony Cardew / Emma Crawshaw

Notes to editors

Lonmin, which is listed on both the London Stock Exchange and the Johannesburg Stock Exchange, is one of the world's largest primary producers of PGMs. These metals are essential for many industrial applications, especially catalytic converters for internal combustion engine emissions, as well as their widespread use in jewellery.

Lonmin's operations are situated in the Bushveld Igneous Complex in South Africa, where around 80% of known global PGM resources are located.

The Company creates value through mining, refining and marketing PGMs and has a vertically integrated operational structure - from mine to market. Underpinning the operations is the Shared Services function which provides high quality levels of support and infrastructure across the operations.

For further information please visit our website: http://www.lonmin.com

Notes:

1 Reporting of shafts are in line with our operating strategy for Generation 1 and Generation 2 shafts.

2 Pandora underground tonnes mined represents 100% of the total tonnes mined on the Pandora joint venture of which 42.5% for October and November 2014 and 50% thereafter is attributable to Lonmin.

3 Limpopo underground tonnes mined represents low grade development tonnes mined whilst on care and maintenance.

4 Ounces mined have been calculated at achieved concentrator recoveries and with Lonmin standard downstream processing recoveries to present produced saleable ounces.

5 Tonnes milled excludes slag milling.

6 Lonmin purchases 100% of the ore produced by the Pandora joint venture for onward processing which is included in downstream operating statistics.

7 Limpopo tonnes milled represents low grade development tonnes milled.

8 Head grade is the grammes per tonne (5PGE + Au) value contained in the tonnes milled and fed into the concentrator from the mines (excludes slag milled).

9 Recovery rate in the concentrators is the total content produced divided by the total content milled (excluding slag).

10 Metals-in-concentrate have been calculated at Lonmin standard downstream processing recoveries to present produced saleable ounces.

11 Corresponds to contained base metals-in-concentrate.

12 Nickel is produced and sold as nickel sulphate crystals or solution and the volumes shown correspond to contained metal. Copper is produced as refined product but typically at LME grade C. Chrome is produced in the form of chromite concentrate and volumes shown are in the form of chromite.

13 Basket price of PGMs is based on the revenue generated in Rand and Dollar from the actual PGMs (5PGE + Au) sold in the period based on the appropriate Rand / Dollar exchange rate applicable for each sales transaction.

14 As per note 13 but including revenue from base metals.

15 Exchange rates are calculated using the market average daily closing rate over the course of the period.