Lonmin Plc (Incorporated in England and Wales)

(Registered in the Republic of South Africa under registration number 1969/000015/10) JSE code: LON

Issuer Code: LOLMI

ISIN: GB0031192486 ("Lonmin")

REGULATORY RELEASE

Third Quarter 2015 Production Report and Business Update

24 July 2015

Lonmin Plc (“Lonmin” or “the Company”), the world’s third largest Platinum producer, today announces its production results for the three months to 30 June 2015 (unaudited) and a business update.

Operational Overview

It is with deep regret that after a record 18 months of fatality free operations, we have to report the fatal injury of our colleague, Mr Sebastiao Cossa, on 19 May at Hossy shaft and we extend our deepest condolences to his family and friends. This underscores the need to remain vigilant in pursuit of Zero Harm.

The rolling 12 month average Lost Time Injury Frequency Rate (LTIFR) for the 12 months to 30 June 2015 increased to 5.26 incidents per million man hours compared to 2.76 at 30 June 2014 and 3.61 at 30 June 2013. This is a major area of concern for us and whilst we continue to focus on safety training and rebuilding relationships, improving safety performance is taking longer than desired, despite the high level of attention that this is receiving. We have shared with all the relevant stakeholders specific plans for our shafts to remedy the situation and these are in the process of being implemented. We are also actively reviewing the health and wellness of our employees.

It is important to note that there was an industrial strike extending over five months of the prior year period with no significant production in Q3 2014 making year-on-year comparisons inappropriate.

Mining operations in the third quarter of 2015 were held back by an increase in the frequency and duration of Section 54 safety stoppages, in particular at K3, our biggest shaft. A total of 2.7 million tonnes was mined in the quarter, 2.4 million tonnes higher than the strike impacted prior year period. Output from the Generation 1 shafts was in line with the management of the depleting shafts.

Saleable Platinum metal-in-concentrate at 172,672 ounces was 149,054 higher than the strike impacted prior year. The smelting and refining operations ran at full capacity processing the stock that had built up earlier in the year when the Number One and Two furnaces were down for repairs. We achieved refined Platinum production in the quarter of 241,170 ounces.

Sales of 231,778 Platinum ounces were in-line with refined production but the weak price environment continued during the third quarter and Dollar metal prices were significantly weaker than prior year periods.

Lonmin Taking Necessary Protective Measures

The Board is taking firm action to further reduce Lonmin’s cost base in the current pricing environment so that it will be able to sustain a viable operation even if the current metal pricing environment continues for some time. Our objective is both to preserve value for our shareholders, including employees and communities, and put the Company in a position where it can prosper as and when the metal prices improve from the current depressed levels.

Lonmin is highly geared to PGM prices. At current metal price levels, the Company is EBITDA negative and our cost minimisation plans are designed to improve this position as much as possible. Since our interim results in May, the platinum price has fallen by 14.4% from $1,126 per ounce at 31 March to $964 at 22 July. Management has worked tirelessly to contain cost increases and we remain confident that we will produce at a unit cost within our cost guidance for the full year which already includes anticipated savings.

To safeguard the long-term interests of our shareholders, employees and all key stakeholders the Board has taken the important decision to approve decisive additional actions to reduce high cost production in an oversupplied market by carrying out the orderly closure of Hossy and Newman shafts. This will be achieved by stopping development and capital work. Instead, only the immediately available ore reserves will be utilised, reducing the overall costs of production and enhancing cash generation and profitability.

In addition, the Board has decided to put on care and maintenance a number of Generation 1 shafts, some of which are currently managed by contractors, namely W1, E1 and 1B shaft. This will include reducing the associated active concentrator capacity. We are also taking further measures to reduce our overhead and support service structures in-line with the closing of shafts and the resultant reduction in the size of our operations.

The consequence of these decisions will be that the remaining shafts will allow for a smaller more sustainable and agile business. We expect normalised annual production over the next two fiscal years to be reduced by some 100,000 platinum ounces. These actions will protect the majority of the workforce but a total of 6,000 employees including contractors are likely to be affected by these closures. This figure includes those who have already applied for the voluntary separation packages we announced in May.

It is our intention to achieve this outcome in partnership with our employees, unions and other relevant stakeholders. This morning, we started the formal consultation process around reducing costs in all areas including the reduction of labour, under the Section 189 requirements of the South African labour laws. This consultation process is aimed at identifying all possible measures and alternatives to forced retrenchments, which include redeployments and reskilling, alternative working arrangements, further cost reduction opportunities and, as a last resort, forced retrenchments. This process is further intended, to facilitate these closures and protect the majority of our workforce.

Our objective is to save the majority of the positions in the company and create a sustainable business by taking urgent action and maximising liquidity to protect the business. All costs, not just labour costs, have to be reduced and productivity improved if the business is to be sustainable.

Financing

We are reviewing the appropriate capital structure for the Company in the new pricing environment as we consider the need to re-finance our debt facilities. The Board is considering the full range of options available to secure long term capital and expects to update the market by the time of our full year results in November 2015.

Lonmin Chief Executive Ben Magara said:

“Lonmin is defending value for all stakeholders in responding to the platinum pricing crisis by taking swift, decisive even though difficult measures. Losing jobs is not pleasant but everyone is having to take significant short term pain to preserve optionality for the long term. All costs have to be reduced including labour and I hope our formal consultation process will come up with mitigations to minimise job losses.”

Third Quarter Production Overview

Mining Operations

The Marikana underground mining operations (including Pandora) produced 2.6 million tonnes during the third quarter, an increase of 2.4 million tonnes on the prior year period.

Generation 2 shafts

Production from our Generation 2 shafts (K3, Rowland, Saffy, 4B/1B and Hossy) represented 78.0% of total production.

- Rowland, our second largest shaft, increased production by 14.8% on Q3 2013 reflecting the positive impact of management actions and the theory of constraints projects launched at this shaft.

- Saffy shaft recorded an increase of 33.2% on Q3 2013 demonstrating the continued good progress that we have made with our promised ramp up. Saffy is on course to reach steady state by the end of the year.

- Production at K3, our biggest shaft, at 604,000 tonnes was 17.1% lower than Q3 2013 driven by an increase in Section 54 safety stoppages.

- There was a decrease in production from Hossy shaft of 23.0% on Q3 2013 driven by safety shutdowns following the fatality in May 2015, which slowed the momentum that had been established at this shaft. As mentioned above, we are commencing an orderly shutdown of Hossy shaft.

- 4B/1B produced 368,000 tonnes which was 19.6% lower than Q3 2013 due to an increase in Section 54 safety stoppages and geological challenges. Due to adequate immediately available ore reserves at 4B and the flexibility that this provides, 1B shaft can be placed on care and maintenance, saving on shaft fixed costs. We are also implementing theory of constraints measures at 4B shaft, to improve performance.

Generation 1 shafts

Production from our Generation 1 shafts (Newman, W1, E1, E2, E3 and Pandora (100%)) was 0.2 million tonnes, or 24.4% lower than Q3 2013 and consistent with our plans.

- Production from Newman shaft decreased by 15.5% on Q3 2013 as planned as this shaft is nearing the end of its life.

- East 1 shaft, which is reaching end of life, saw a decrease in production of 63.0% on Q3 2013.

- Production from Pandora (100%) of 110,000 tonnes increased by 94,000 tonnes over the prior year period but decreased by 26.1% on Q3 2013 due to safety shutdowns.

We had limited activity at K4 shaft with production of 18,000 tonnes.

Production from our depleting Merensky opencast operations of 63,000 tonnes was 16,000 tonnes, or 19.9% lower than the prior year period as the operation reaches the end of its life.

A total of 301,000 tonnes of production were lost in the quarter mainly due to safety stoppages particularly at K3 and Hossy shafts. In the prior year period 3,111,000 tonnes were lost due to the protected wage strike. In comparison to Q3 2013 this is an increase in tonnes lost of 67,000 tonnes. We continue to focus on safety, training and rebuilding relationships through visible felt leadership, direct employee engagement and lessons learnt from the accidents.

Process Operations

Total tonnes milled in the quarter of 2.8 million tonnes were 2.4 million tonnes higher than the prior year period. We continue to utilise six out of our seven Marikana concentrators as part of our measures to reduce costs demonstrating our ability to scale our operations as required.

Underground milled head grade at 4.42 grammes per tonne (5PGE+Au) was 8.9% higher than the prior year period of

4.06 grammes per tonne due to improved ore mix compared to the prior year period. The overall milled head grade at 4.40 grammes per tonne, was up 12.1% on the prior year period due to the increase in underground head grade combined with the decrease in opencast ore in the mix.

Concentrator recoveries for the quarter continue to be industry leading at 86.7%.

Total Platinum metal-in-concentrate for the quarter at 172,672 saleable ounces was 149,054 ounces higher than the prior year period.

Our furnaces are operating at normal production levels and we expect to process the build-up of concentrate by the end of Q4 2015 as announced at our Interim Results in May 2015. The planned shut-down of the Number Two furnace for scheduled refractory brick replacement and design upgrades on the roof and off-gas system has been moved from Q4 2015 to Q1 2016. This is in line with the assessed condition of the furnace and will allow more time for further design work and procurement of materials and to provide processing flexibility during (the ongoing) electricity constraints arising from Eskom load shedding.

Total refined Platinum production for the quarter of 241,170 ounces was 204,915 ounces higher than the prior year period and 129,997 ounces higher than Q3 2013. This was the highest volume refined in a single quarter since Q4 2013 and demonstrates the benefit of our excess smelting capacity and ability to process stock build-ups efficiently. Total PGMs produced in the quarter were 450,885 ounces, an increase of 368,370 on the prior year period.

Sales & Pricing

Platinum sales for the quarter of 231,778 ounces were in-line with refined production and on schedule. This was an increase of 206,039 ounces on the prior year period. PGM sales of 437,160 ounces were up 357,469 ounces. The remaining build-up of concentrate stock ahead of the smelters is anticipated to unwind in Q4 as we have the processing capacity to refine the accumulated material.

The weak price environment continued during the third quarter. The Platinum US Dollar price decreased by 23.2% on the prior year period. The Rand basket price of R10,861 per ounce was 12.0% higher than the prior year period impacted by the Rand weakness as the average Rand to Dollar exchange rate was 14.9% weaker at 12.08 compared to 10.51.

Nine Month Production Overview

Our mining and milling performance in the nine months of the 2015 financial year increased significantly on the prior year period which was impacted by the five month strike.

Mining Operations

Total tonnes mined during the first nine months of 8.3 million, showed an increase of 4.7 million when compared to the strike impacted prior year period. In comparison to Q3 YTD 2013, tonnes mined were 5.3% lower due to a decrease in production from our Generation 1 shafts in end of lifecycle management (down 15.9%) and the depleting opencast operations (down 58.8%). Production from our Generation 2 shafts was up 0.6% on Q3 YTD 2013 as the ramp-up at Saffy (up 48.4%) and improvements at Rowland (up 9.4%) off-set the impact of increased Section 54 safety shut-downs at K3 and Hossy shafts.

Saffy shaft produced 1,264,000 tonnes in the period compared with 436,000 tonnes in the prior year period and up 48.4% on Q3 YTD 2013, showing the good progress we have made in ramping up Saffy to steady state.

Hossy shaft produced 729,000 tonnes in the period compared with 313,000 tonnes in the prior year period and down 2.1% on Q3 YTD 2013. Following the fatality at this shaft in May 2015, safety shut downs were instigated resulting in the loss of 57,000 tonnes.

Production from our Merensky opencast operations of 171,000 tonnes was 26.8% lower than the prior year period as planned as this operation is nearing the end of its life. Production in the prior period continued during the strike as this operation is operated by contractors.

Pandora (100%) production of 420,000 increased by 248,000 tonnes on the prior year period. This was an increase of 2.1% on Q3 YTD 2013 as the mining footprint of this shaft was extended by another two levels.

Tonnes lost mainly due to increased Section 54 safety stoppages and management induced safety stoppages at 0.6 million tonnes were lower than the prior year period but were 0.1 million tonnes higher than Q3 YTD 2013. In total, 602,000 tonnes were lost during the nine month period, of which 489,000 tonnes related to Section 54 safety stoppages, 86,000 tonnes to management induced safety stoppages (MISS). This compares to a total of 5,917,000 tonnes lost in the prior year period of which 5,703,000 were lost due to industrial action, 191,000 tonnes were due to Section 54 safety stoppages and 23,000 tonnes were due to MISS.

Process Operations

Concentrators

Total tonnes milled in the nine month period at 8.8 million tonnes were the highest since 2012 emphasizing our good operational management team. This was 5.1 million tonnes higher than the prior year period as the concentrating operations were also impacted by the strike action and shut down from 23 January 2014. Compared to the nine months to June 2013 tonnes milled were up 1.8% in-line with our continuous improvement efforts. The impact on tonnes milled due to load shedding was a reduction of 73,000 tonnes.

Underground milled head grade was 4.52 grammes per tonne, broadly in-line with the prior year period. Overall the milled head grade was 4.48 grammes per tonne, up 0.8% on the prior year period due to the decrease in lower grade opencast ore in the mix.

Underground and overall concentrator recoveries for the nine months at 86.9% continue to be industry leading.

Total Platinum metal-in-concentrate for the period under review at 554,657 saleable ounces was the highest since 2012.

Smelters and Refineries

As reported at the half year, our furnaces are up and running and we achieved total refined production for the nine month period of 503,473 ounces of saleable Platinum, 71.6% higher than Q3 YTD 2014 and 15.1% higher than Q3 YTD 2013. PGMs produced in the period were 952,341 ounces, 13.0% higher than Q3 YTD 2013.

Platinum sales for the nine months were 497,719 ounces and 951,907 PGM ounces.