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LONDON - Lonmin is taking further decisive action to ensure a sustainable business in a continuing hostile macroeconomic environment. 
On 17 July 2017, Lonmin Plc announced its third quarter production results and business update, which reported enhanced mining performance, reduced unit costs and increased net cash. 
Despite this performance, Lonmin's concern continues to grow of the persistent unfavourable economic conditions and the inflationary cost pressures confronting the platinum mining industry in South Africa. 

Therefore, despite significant measures being taken to reduce costs, Lonmin is announcing additional measures to ensure that its operations generate sufficient cash to support a sustainable business.
In addition to continuing to remove high cost production, Lonmin is announcing today the initial conclusions resulting from an on-going review of its operations (the “Operational Review”), which has the primary objective of preserving value for shareholders and safeguarding the long-term interests of employees and all key stakeholders. 

The Operational Review is focused on optimising the cash produced by the business, both from its operations and through releasing capital from those activities where the company is currently bearing the cost of excess capacity and unrealised development potential. 

The review is also designed to position the company to benefit from any future improvement in the PGM pricing environment. 
The immediate results of the Operational Review include initiatives to generate cash through the monetisation of specific Lonmin assets and to preserve cash by reducing fixed costs. 

Subject to receiving the necessary consents and approvals, Lonmin plans to implement the following:
- Undertake options to maximise cash from Lonmin's downstream processing operations. This is currently expected to be implemented  through the sale of excess processing capacity of up to 500,000 platinum ounces per annum.  This implementation would have the benefit of releasing capital for Lonmin whilst also allowing other South African PGM producers who currently operate on a sale of concentrate basis to access the profit margin benefits of an integrated beneficiation model.

- Review of the company’s major development capital requirements over the next few years. This will consist of Lonmin considering to sell for cash or introduce joint venture partners into Limpopo and Akanani together with exploring options to introduce funding partners into K4.

 Lonmin believes that the MK2 project will definitely be a value to the company and Lonmin will explore options to introduce funding partners and preserve approximately five thousand jobs.
- Reduction in annual overhead costs by a minimum of R 500 million by the end of the year ending 30 September 2018. The significant majority of overhead reductions will come from non-production central functions as the company seeks to right-size its overheads to its operations.  
Lonmin asserts that it is too early to decipher the prime effect of the Operational Review on the company, but the overall position remains for the business to be cash positive after capital investment.

Notably, further announcements will be announced when Lonmin deems appropriate and will engage with the apt stakeholders in relation to these initiatives.

Lonmin is also pleased to announce today the approval by the DMR of its S11 application to acquire the Pandora JV from Anglo Platinum which will defer R2.6 billion of capital expenditure and contribute to the sustainability of the business by potentially preserving jobs at E3 shaft. 

Lonmin has already received approval from the competition tribunal and is in the process of obtaining lender consent.