Updated trading statement in respect of the year ended 30 June 2015

Shareholders are referred to the trading statement released on the Stock Exchange News Service of the JSE Limited on 12 June 2015 whereby shareholders were advised that headline earnings and basic earnings to be reported on for the financial year ended 30 June 2015 (F2015) would be at least 45% and 55% lower, respectively, than those of the previous financial year.

The Company and its directors are satisfied that a reasonable degree of certainty exists to provide shareholders with an update of the likely range by which the Company’s headline earnings per share and basic earnings per share are expected to decrease.

ARM’s F2015 headline earnings were negatively affected by a decline in US Dollar commodity prices for most of the commodities which ARM produces. The lower US Dollar prices were partially offset by a weaker average Rand/US Dollar exchange rate. Most of the operations achieved good unit cost control.

Accordingly, ARM announces that headline earnings per share for F2015 are expected to decrease by between 56% and 60% to between 765 cents and 835 cents (F2014: 1 900 cents).

ARM’s F2015 basic earnings were largely impacted by the following special items:

1. An unrealised mark-to-market loss on the Harmony Gold Mining Company Limited (Harmony) investment of R543 million after tax due to the decline in Harmony’s share price below the level at 30 June 2014;
2. Impairments in ARM Ferrous of R293 million after tax primarily relating to manganese alloy furnace closures; and
3. An impairment of property, plant and equipment of R784 million (ARM’s attributable share) at the Lubambe Copper Mine primarily as a result of a revision to the mine plan but also due to a decline in the short-term copper price outlook. The revised plan places the South Limb (i.e. the vertical shaft) on temporary care and maintenance while management revises the mining layout for the sand zone area. Changes made as part of the revised plan are already yielding positive results with an increase in head grade and a reduction in C1 unit cash costs achieved in the last quarter of F2015. The Lubambe Mine continues to target full production of 45 000 tonnes per annum which is expected to be achieved in F2019. The higher grade Lubambe Extension Area continues to be a significant part of the future expansion of the mine.

The basic earnings per share are therefore expected to decline by between 96% and 97% to between 46 cents and 53 cents (F2014: 1 521 cents).

The financial information on which this trading statement is based has neither been reviewed nor reported on by the external auditors of ARM.

The Company’s F2015 provisional financial results will be released on 4 September 2015.

For all investor relations queries, please contact:

Jongisa Magagula
Corporate Development and Head of Investor Relations
Office: +27 11 779 1507
Email: jongisa.magagula@arm.co.za

Johannesburg
27 August 2015

Sponsor: Deutsche Securities (SA) (Proprietary) Limited