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Lonmin PLC LMI US$817 million Rights Issue

  Lonmin PLC (LMI) - US$817 million Rights Issue

RNS Number : 7364Q
Lonmin PLC
09 November 2012




 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR
 INTO THE UNITEDSTATES,AUSTRALIA,CANADAORJAPAN OR ANY OTHER JURISDICTION
  WHERE THE RELEASE, PUBLICATION OR DISTRIBUTION OF THIS ANNOUNCEMENT IS NOT
                  PERMITTED BY APPLICABLE LAW OR REGULATION



9 November 2012

                                  Lonmin Plc

                         US$817 million Rights Issue



The Board  of  Lonmin Plc  ("Lonmin"  or  "the Company")  today  announces  an 
underwritten  Rights   Issue  to   raise  gross   proceeds  of   approximately 
US$817million.

Lonmin's full year results for the financial year ended 30 September 2012 have
also been released today in an accompanying announcement.

Highlights

· 9 for 5 underwritten  Rights Issue of up  to 365,503,264 New Shares  at 
140 pence  per  New  Share  (or,  in the  case  of  Qualifying  South  African 
Shareholders,  ZAR  19.4872  per   New  Share)  to   raise  net  proceeds   of 
approximately US$777 million

·  The  net  proceeds  of  the  Rights  Issue  will  be  used  to  reduce 
indebtedness and  substantially  strengthen the  Company's  overall  financial 
position at a time of weak margins in the platinum mining industry

· Upon receipt  of the  net proceeds  and their  application in  repaying 
amounts outstanding under the Company's existing debt facilities, the  Amended 
Facilities Agreements which  the Company  has entered into  with its  existing 
lending syndicate will come into effect and will substitute tangible net worth
and capex based covenants  for the Lonmin Group's  existing net debt /  EBITDA 
and EBITDA / interest covenants

Roger Phillimore, Chairman of Lonmin, said:

"The Board remains confident of the longer-term potential of Lonmin, with  its 
high-quality asset base and  long-term mining licences,  and in the  long-term 
fundamentals of  the  PGM industry.  Its  primary  focus continues  to  be  on 
preserving and enhancing value for all Shareholders.

The tragic events at Marikana resulted  in a material reduction in  production 
at a time when we were not  well positioned to absorb the resulting  financial 
shock.

The Rights Issue is  expected to raise approximately  US$817 million in  gross 
proceeds, and was designed  with one thing in  mind: to help our  shareholders 
maximise returns  from the  Company's  excellent assets  and position  in  the 
market, when it improves."

The Rights Issue

The Rights Issue  will result in  the issue  of up to  365,503,264 New  Shares 
(representing up to  64.3 per cent.  of the enlarged  issued share capital  of 
Lonmin) at  a price  of 140  pence per  New Share,  in respect  of  Qualifying 
Shareholders (other than  Qualifying South  African Shareholders)  or, in  the 
case of  Qualifying South  African Shareholders,  ZAR 19.4872  per New  Share, 
payable in full on acceptance. The Rights Issue will be on the basis of:

                                      

                  9 New Shares for every 5 Existing Shares.

The New  Shares will,  when issued  and fully  paid, rank  pari passu  in  all 
respects with the Existing Shares, including  the right to receive all  future 
dividends and other  distributions declared, made  or paid after  the date  of 
their issue.

The UK Issue Price  of 140 pence per  New Share, which is  payable in full  by 
Qualifying Shareholders other  than Qualifying South  African Shareholders  on 
acceptance by no  later than  11.00 a.m. (London  time) on  10 December  2012, 
represents, in effect:

· a 69.1 per cent.  discount to the closing  price of an Existing  Share; 
and

· a 44.4  per cent.  discount to the  theoretical ex-Rights  price of  an 
Existing Share,

in each case based on  the closing middle-market price  of 452.8 pence on  the 
LSE on the last business day prior to the date of announcement of the terms of
the Rights Issue.

The SA Issue Price of ZAR 19.4872 per  New Share, which is payable in full  by 
Qualifying South African Shareholders on acceptance by no later than 1.00 p.m.
(Johannesburg time) on 10 December 2012, represents:

· a 69.7 per cent.  discount to the closing  price of an Existing  Share; 
and

· a 45.0  per cent.  discount to the  theoretical ex-Rights  price of  an 
Existing Share,

in each case based on the  closing price of ZAR 64.22  on the JSE on the  last 
business day prior  to the date  of announcement  of the terms  of the  Rights 
Issue.

The Rights Issue is  being underwritten by Citi,  HSBC, J.P. Morgan  Cazenove, 
Standard  Bank,  BNP  Paribas,  Investec,  Rand  Merchant  Bank  and  Standard 
Chartered, save in respect of New Shares which the Directors have  irrevocably 
undertaken to take up.

The Board has  received financial  advice from  Greenhill in  relation to  the 
Rights Issue.

This summary  should  be  read in  conjunction  with  the full  text  of  this 
announcement. Further,  this summary  contains  extracts from  the  Chairman's 
Letter in the Prospectus, which  extracts are qualified and/or  contextualised 
by, and should be read with, the Prospectus.



CONTACTS

Lonmin
Tanya Chikanza (Head of Investor Relations)                 +27 11 218 8300 /
                                                             +44 20 7201 6007
Ruli Diseko (Investor Relations Manager)                      +27 11 218 8373
Greenhill                                                     +44 20 7198 7400
(UKSponsor and Financial Adviser)
David Wyles
Anthony Parsons
Edward Rowe
Citi (Joint Bookrunner and Corporate Broker)                  +44 20 7986 4000
Jan Skarbek
Alex Carter
Robert Way
Sean Wegerhoff (South Africa)                                +27 11 944 1000
J.P. Morgan Cazenove (Joint Bookrunner and Corporate Broker)  +44 20 7742 4000
Michael Wentworth-Stanley

Jonathan Wilcox
J.P. Morgan Equities Limited                                   +27 11 507 0300
(SA Transaction Sponsor)
Jako Van Der Walt
HSBC (Joint Bookrunner)                                       +44 20 7991 8888
Nick Donald
Alexander Paul
Standard Bank (Joint Bookrunner)
Eric Von Glehn                           +27 11 631 5941


Simon Matthews                                              +44 203 145 8102
Cardew Group
James Clark / Emma Crawshaw                                   +44 20 7930 0777
Sue Vey                                                        +27 72 644 9777
Brunswick - Johannesburg
Cecilia de Almeida                                           +27 11 502 7400 /
                                                               +27 83 325 9169

SHAREHOLDER ENQUIRIES

UKShareholders: Contact theUKShareholder  Helpline on 0871  384 2958  (from 
inside theUnited Kingdom)  or +44  (0)121 415 0227  (from outside  theUnited 
Kingdom). This Shareholder Helpline is available  from 8.30 a.m. to 5.30  p.m. 
(Londontime) Monday to Friday (except bank holidays).

South African Shareholders: contact the South African Shareholder Helpline  on 
011  713  0893  (from  insideSouth  Africa)   or  +27  11  713  0893   (from 
outsideSouth Africa). This Shareholder Helpline  is available from 8.00  a.m. 
to 5.00 p.m. (Johannesburgtime) Monday to Friday (except public holidays).

Please note that for legal reasons, the UK Shareholder Helpline and the  South 
African Shareholder Helpline are only able to provide information contained in
this announcement  or  the  prospectus  relating to  the  Rights  Issue  (when 
published) and information relating  to Lonmin's register  of members and  are 
unable to give advice  on the merits  of the Rights  Issue, or provide  legal, 
financial, tax or investment advice.

This announcement  is an  advertisement  and not  a prospectus  and  investors 
should not subscribe for or purchase  any Nil Paid Rights, Fully Paid  Rights, 
Letters of Allocation orNew Sharesreferred to in this announcement except on
the basis of information in the Prospectus which, subject to UKLA approval, is
expected to be published  by the Company today  in connection with the  Rights 
Issue. Copies of the Prospectus will, following publication, be available from
the Company's  registered office.This  announcement does  not constitute,  or 
form part of any offer or invitation to purchase, otherwise acquire, subscribe
for, sell, otherwise dispose of or issue, or any solicitation of any offer  to 
sell, otherwise dispose  of, issue, purchase,  otherwise acquire or  subscribe 
for, any  security in  the capital  of the  Company in  any jurisdiction.  Any 
decision to  purchase, otherwise  acquire, subscribe  for, sell  or  otherwise 
dispose of  any Provisional  Allotment  Letter, Nil  Paid Rights,  Fully  Paid 
Rights, Letters of  Allocation and/or New  Shares should only  be made on  the 
basis of  information contained  in  and incorporated  by reference  into  the 
Prospectus which contains further details  relating to the Company in  general 
as well as a  summary of the risk  factors to which an  investment in the  New 
Shares is subject.  Nothing in this  announcement should be  interpreted as  a 
term or  condition of  the Rights  Issue.Subject to  certain exceptions,  the 
Prospectus will not be available to Shareholders located inthe United  States 
or any of the ExcludedTerritories.This  announcement is not directed to,  or 
intended for distribution or use by, any person or entity that is a citizen or
resident or  located in  any locality,  state, country  or other  jurisdiction 
where such distribution, publication, availability,  or use would be  contrary 
to law or regulation which would require any registration or licensing  within 
such jurisdiction.

This announcement and  the information  contained herein  is not  an offer  of 
securities for sale in theUnited States. The Nil Paid Rights, the Fully  Paid 
Rights, the Letters of  Allocation, the New Shares,  the Forms of  Instruction 
and the Provisional Allotment Letters have not been and will not be registered
under the  US Securities  Act  of 1933(the  "Securities  Act"), or  under  any 
securities laws of any  State or other jurisdiction  of the United States  and 
may not be offered, sold, resold,  pledged, taken up, exercised, renounced  or 
otherwise delivered, distributed or transferred, directly or indirectly,  into 
or within the  United States except  pursuant to  an exemption from,  or in  a 
transaction not subject  to, the registration  requirements of the  Securities 
Act and in  compliance with  any applicable securities  laws of  any State  or 
other jurisdiction of the  United States. No public  offering of the Nil  Paid 
Rights, the Fully  Paid Rights, the  Letters of Allocation  or the New  Shares 
will be made in the United States. No money, securities or other consideration
from any person inside  theUnited Statesis being solicited  and, if sent  in 
response to  the  information contained  in  this announcement,  will  not  be 
accepted.

This announcementdoes not constitute an offer of Nil Paid Rights, Fully  Paid 
Rights, Letters of Allocation, New Shares or Provisional Allotment Letters  to 
anypersonwith   a   registered    address   in,   or    who   is    resident 
in,Australia,CanadaorJapan. None of  the Nil Paid  Rights, the Fully  Paid 
Rights, the Letters of Allocation,  the New Shares, the Provisional  Allotment 
Letters or the Forms of Instruction has  been or will be registered under  the 
relevant     laws     of     any     state,     province     or      territory 
ofAustralia,CanadaorJapan. Subject to certain limited exceptions, none  of 
the Prospectus, the Provisional Allotment Letters, the Forms of Instruction or
this      announcement       will       be       distributed       in       or 
intoAustralia,CanadaorJapan.The release, publication  or distribution  of 
this announcement  in  certain jurisdictions  may  be restricted  by  law  and 
therefore persons  in  such  jurisdictions into  which  this  announcement  is 
released, published or distributed should inform themselves about and  observe 
such restrictions.

Greenhill, which is authorised and regulated in the United Kingdom by the FSA,
is acting as sole  sponsor and financial  adviser for the  Company and no  one 
else in connection with the Rights Issue and will not regard any other  person 
(whether or not a recipient of this  announcement) as a client in relation  to 
the Rights Issue and will not be responsible to anyone other than the  Company 
for providing the protections afforded to its clients or for giving advice  in 
connection with the Rights  Issue, the contents of  this announcement and  the 
accompanying  documents  or  any  other  transaction,  arrangement  or  matter 
referred to herein or therein.

Each of  the Banks  (other than  Greenhill),  each of  which (apart  from  BNP 
Paribas, Rand  Merchant  Bank,  Standard  Chartered and  the  SA  Sponsor)  is 
regulated and  authorised  in  the  United  Kingdom  by  the  FSA,  is  acting 
exclusively for the Company and for no-one else in connection with the  Rights 
Issue and will not regard any other person (whether or not a recipient of this
announcement) as a  client in relation  to the  Rights Issue and  will not  be 
responsible to anyone  other than  the Company for  providing the  protections 
afforded to their  respective clients  or for providing  advice in  connection 
with the Rights Issue or any other transaction, arrangement or matter referred
to herein.

The Banks may, in accordance with applicable legal and regulatory  provisions, 
engage in transactions  in relation  to Nil  Paid Rights,  Fully Paid  Rights, 
Letters of  Allocation,  Existing  Shares and/or  New  Shares  and/or  related 
instruments  for  their  own  account   for  the  purpose  of  hedging   their 
underwriting exposure (if any) or otherwise. Moreover, subject to the terms of
the Underwriting Agreement, the Underwriters, or any affiliate thereof  acting 
as an investor  for its  or their own  account(s) may  subscribe for,  retain, 
purchase or sell  Nil Paid  Rights, Fully Paid  Rights, Provisional  Allotment 
Letters, Letters of  Allocation and/or New  Shares and/or related  investments 
for its or their own  account(s) and in that capacity  may offer or sell  such 
securities and/or  other investments  otherwise than  in connection  with  the 
Rights Issue. Accordingly,  references in  this document to  New Shares  being 
offered or placed should be read as including any offering or placement of New
Shares to each of the Underwriters or  any of their affiliates acting in  such 
capacity. The aforementioned entities do not intend to disclose the extent  of 
any such investments  or transactions  otherwise than in  accordance with  any 
applicable legal or regulatory requirements.

This announcement includes  forward-looking statements within  the meaning  of 
the securities laws of certain jurisdictions. These forward-looking statements
include,  but  are  not  limited  to,  statements  other  than  statements  of 
historical fact including  without limitation, those  regarding the  Company's 
intentions, beliefs or  current expectations concerning,  among other  things, 
the Company's results of  operations, financial condition, prospects,  growth, 
strategies and  the industry  in which  the Company  operates.Forward-looking 
statements are typically identified by the use of forward-looking  terminology 
such as "believes",  "expects", "may", "will",  "could", "should",  "intends", 
"estimates", "plans", "assumes"  or "anticipates" or  the negative thereof  or 
other variations  thereon  or comparable  terminology,  or by  discussions  of 
strategy   that   involve   risks   and   uncertainties.By   their    nature, 
forward-looking statements involve risks and uncertainties, including, without
limitation, the risks  and uncertainties to  be set forth  in the  Prospectus, 
because they relate to events and depend on circumstances that may or may  not 
occur in the future; actual events or results may differ materiallyfrom those
expressed in  or  implied  by  these  statementsas  a  result  of  risks  and 
uncertainties facing the Company and its subsidiaries.Many of these risks and
uncertainties relate  to factors  that  are beyond  the Company's  ability  to 
control or estimate precisely,  such as changes  in future market  conditions, 
currency fluctuations, the behaviour of other market participants, the actions
of governmental  regulators and  other risk  factors such  as changes  in  the 
political, social and regulatory framework in which the Company operates or in
economic or  technological  trends  or  conditions,  including  inflation  and 
consumer confidence, on a global,  regional or national basis.Such risks  and 
uncertainties could cause actual  results to vary  materially from the  future 
results indicated, expressed  or implied in  such forward-looking  statements. 
The forward-looking statements contained in this announcement speak only as of
the date of this announcement and the Company undertakes no duty to update any
of them publicly in light of new  information or future events, except to  the 
extent required by applicable law, the Prospectus Rules, the Listing Rules and
the Disclosure and Transparency Rules.

No statement in this announcement is intended as a profit forecast or a profit
estimate and no statement in this  announcement should be interpreted to  mean 
that earnings per  Ordinary Share for  the current or  future financial  years 
would necessarily  match  or  exceed the  historical  published  earnings  per 
Ordinary Share.Prices and values of, and  income from, shares may go down  as 
well as up and an investor may not get back the amount invested. It should  be 
noted that past performance is no guide to future performance. Persons needing
advice should consult an independent financial adviser.

This announcement should  not be  considered a  recommendation by  any of  the 
Banks or any of their  respective directors, officers, employees, advisers  or 
any of  their  respective  affiliates  in  relation  to  any  purchase  of  or 
subscription  for  securities.  No  representation  or  warranty,  express  or 
implied, is  given by  or  on behalf  of any  of  the Banks  or any  of  their 
respective directors, officers, employees, advisers or any of their respective
affiliates or any other  person as to the  accuracy, fairness, sufficiency  or 
completeness of the information  or the opinions or  the beliefs contained  in 
this announcement (or any part  hereof).None of the information contained  in 
this announcement has been  independently verified or approved  by any of  the 
Banks or any of their  respective directors, officers, employees, advisers  or 
any of their respective affiliates.Save in the case of fraud, no liability is
accepted by any of the Banks  or any of their respective directors,  officers, 
employees, advisers  or any  of their  respective affiliates  for any  errors, 
omissions or inaccuracies  in such information  or opinions or  for any  loss, 
cost or damage suffered or incurred howsoever arising, directly or indirectly,
from any use of this announcement  or its contents or otherwise in  connection 
with this announcement.No person has been authorised to give any  information 
or to make any representations other than those contained in this announcement
and, if given or made, such information or representations must not be  relied 
on as having been  authorised by the  Company, any of the  Banks or any  other 
person. Subject to the Listing Rules, the Prospectus Rules and the  Disclosure 
and Transparency  Rules, the  issue of  this announcement  shall not,  in  any 
circumstances, create any  implication that there  has been no  change in  the 
affairs of  the  Group  since  the  date of  this  announcement  or  that  the 
information in it is correct as at any subsequent date.

Neither the content of  the Company's website (or  any other website) nor  the 
content of any website accessible from hyperlinks on the Company's website (or
any other website) is incorporated into, or forms part of, this announcement.

This announcement  has  been  prepared  for the  purposes  of  complying  with 
applicable law  and  regulation  in  theUnited  Kingdomand  the  information 
disclosed may not be the same as that which would have been disclosed if  this 
announcement had been prepared in accordance with the laws and regulations  of 
any jurisdiction outside of theUnited Kingdom.



 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR
 INTO THE UNITEDSTATES,AUSTRALIA,CANADAORJAPAN OR ANY OTHER JURISDICTION
  WHERE THE RELEASE, PUBLICATION OR DISTRIBUTION OF THIS ANNOUNCEMENT IS NOT
                  PERMITTED BY APPLICABLE LAW OR REGULATION

9 November 2012

                                  LONMIN PLC

   9 FOR 5 RIGHTS ISSUE OF UP TO 365,503,264 NEW SHARES AT 140 PENCE OR ZAR
                            19.4872 PER NEW SHARE



INTRODUCTION

On 30 October 2012,  Lonmin announced that it  proposed to undertake a  Rights 
Issue to strengthen the Company's financial position and significantly  reduce 
its net indebtedness. The Rights Issue, which is conditional on, amongst other
things, Shareholder approval, will be  made to all Qualifying Shareholders  on 
the terms set out in the Prospectus and  will be on the basis of 9 New  Shares 
at 140  pence per  New  Share or,  in the  case  of Qualifying  South  African 
Shareholders, ZAR 19.4872 per New Share,  for every 5 Existing Shares held  on 
the relevant Record Date by  Qualifying Shareholders. The Rights Issue,  which 
is expected to raise gross proceeds  of US$817 million will involve the  issue 
of up to 365,503,264 New Shares,  representing approximately 180 per cent.  of 
the Company's share capital in issue as at the date of this announcement.

The UK Issue  Price of 140  pence per New  Share represents a  44.4 per  cent. 
discount to the theoretical ex-Rights price based on the closing middle market
price of 452.8 pence per Share, and  a 69.1 per cent. discount to the  closing 
middle market price, in each  case on 8 November  2012, the last business  day 
prior to the date  of announcement of  the terms of the  Rights Issue. The  SA 
Issue Price of ZAR 19.4872 per New Share represents a 45.0 per cent.  discount 
to the theoretical ex-Rights price based on the closing price of ZAR 64.22 per
Share, and a 69.7 per cent. discount to  the closing price, in each case on  8 
November 2012, the last business day prior to the date of announcement of  the 
terms of the Rights Issue.

The Rights Issue is  being underwritten (save in  respect of those New  Shares 
which the Directors  have irrevocably undertaken  to take up)  by Citi,  HSBC, 
J.P. Morgan Cazenove, Standard Bank, BNP Paribas, Investec, Rand Merchant Bank
and Standard Chartered.

The purpose of this announcement  is to explain to  you the background to  and 
reasons for the Rights  Issue and to explain  why the Directors consider  that 
the Rights Issue is in the best interests of the Company and Shareholders as a
whole and why the Directors recommend that Shareholders vote in favour of  the 
Resolution to be proposed at the General Meeting on 19 November 2012 at 9:30am
(London time)  to  facilitate the  Rights  Issue. This  announcement  contains 
extracts  from   the  Prospectus,   which   extracts  are   qualified   and/or 
contextualized by, and should be read with, the Prospectus.

BACKGROUND TO AND REASONS FOR THE RIGHTS ISSUE



Introduction

(i) Lonmin's business

Lonmin is the third largest primary  producer of platinum, with mines  located 
in the world's largest productive PGM  deposit, the Bushveld Complex in  South 
Africa. The Company's  mineral resources provide  a source of  supply that  is 
expected to  last for  decades  at current  and  anticipated future  rates  of 
mining. Lonmin operates a vertically integrated  business model and is one  of 
only four "mine-to-market" primary PGM producers. Over the last few years, the
management team has been  implementing a well-defined operational  improvement 
strategy which has resulted in, amongst other things, improved development  of 
available ore  reserves,  significant  improvements  in  the  performance  and 
operational stability of  the process  division, the addition  of new  smelter 
capacity, and an improvement in mined grades. In addition, prior to the Events
at Marikana (as defined below), the  management team had been implementing  an 
investment strategy to increase safely its level of PGM production and  sales, 
in order to improve per-unit production cost efficiency and deliver more  PGMs 
into a market which the Directors expect to grow over the long term.

(ii) The Events at Marikana

On 10 August 2012, approximately 3,000 rock drill operators employed by Lonmin
commenced an  unlawful  work  stoppage  and protest  march  at  the  Company's 
Marikana mine operations. This was  followed by significant levels of  violent 
intimidation of  non-striking workers,  with  eight employees,  including  two 
security guards as well as  two policemen, killed in  the initial days of  the 
unlawful work stoppage. As a result,  in subsequent days the vast majority  of 
the Company's 24,000 mine workers were absent  from work and it was no  longer 
possible to maintain production. Tragically the violence and unrest  escalated 
materially throughout that week  and in total 46  people, including 40  Lonmin 
employees, lost their lives.

The Board was deeply  saddened by the violent  unrest which took place  during 
this time and continues  to express its profound  sympathy to those  affected, 
including the families, friends and colleagues of those who died. The  Company 
has committed to establish and contribute  to a Memorial Fund for the  benefit 
of the families of the deceased, the  central purpose of which is to fund  the 
education of their children.

The Company then worked resolutely to resolve the tensions within the  various 
factions of the workforce in order to create an environment where a return  to 
work was possible.

On  18  September  2012,   following  an  all-inclusive  negotiation   process 
facilitated by  the Commission  for  Conciliation, Mediation  and  Arbitration 
involving the Company, trade  unions, the South  African Council of  Churches, 
the Department of Mineral Resources (the "DMR"), the Department of Labour  and 
delegates of striking employees, the  September 2012 Wage Addendum was  signed 
by the  Company,  the  National  Union  of  Mineworkers,  the  Association  of 
Mineworkers and Construction Union, Solidarity and United Association of South
Africa and  representatives  of the  delegates  of striking  employees,  which 
agreed on a return to work with effect from 20 September 2012.

On 20 September 2012,  81.4 per cent. of  Lonmin's employees returned to  work 
and the  initial focus  of the  Company was  to ensure  a safe  resumption  of 
production. As a result, it was not until 1 October that the normal mine shift
pattern was re-established and blasting  across the property restarted.  Since 
then employee attendance  has continued  at levels  regarded by  the Board  as 
normal for Lonmin's  business, taking into  account scheduled leave,  sickness 
and other  reasons  for  absence.  As at  the  Latest  Practicable  Date,  all 
concentrators are now in production except for the Number One UG2 plant, which
is down for  a planned upgrade.  The Number  One and Number  Two smelters  are 
fully operational, as  are the Base  Metals Refinery and  the Precious  Metals 
Refinery. The first platinum ounces were turned out by 31 October.

(iii) Response to changing circumstances

Prior to the Events at Marikana, the Board had commenced a review of  Lonmin's 
growth strategy, future production profile and capital investment programme as
a result of the emerging weak short-term demand outlook for PGMs and the  weak 
short-term pricing environment. The Directors believe that a sustained rise in
the prices of PGMs in general, and platinum in particular, has been held  back 
by the  fragile  state of  the  auto  markets (particularly  in  Europe),  the 
Company's largest end market, and by a degree of oversupply from PGM producers
who have found it difficult to materially reduce immediate production and who,
the Directors believe, have instead  sought to preserve financial capacity  by 
reducing capital expenditure intended to support future production.

The Events at Marikana, and subsequent strike action at almost all other South
African PGM producers have, given the importance of South African producers to
global PGM production, in a  short space of time  altered the outlook for  the 
supply side of the PGM industry.  These events have increased operating  costs 
for Lonmin and other companies in the South African PGM mining industry, while
at the same  time creating  supply constraints  which have  contributed to  an 
increase in PGM prices.  The Board believes that  the disruption to the  South 
African PGM  mining  industry  is  also likely  to  result  in  some  capacity 
reductions as higher  cost operations  are forced  to reduce  output or  close 
down, which the Board believes should sustain improved pricing for PGMs.

In light of the Events  at Marikana and the  resulting adverse impact on  cash 
flow, and together with the ongoing challenging trading environment, the Board
has completed  a further  thorough  review of  Lonmin's strategy  and  capital 
structure. The  Board  has concluded  that  reducing Lonmin's  cost  base  and 
capital expenditure in  the near  term, whilst raising  additional equity,  in 
conjunction with entering into  the Amended Facilities, is  the best route  to 
achieving a  more  appropriate  and  robust  capital  structure  with  greater 
financial flexibility.  The  Board also  believes  that the  Rights  Issue  is 
necessary to address the  risk of the Group  breaching financial covenants  in 
its existing facilities  when they  are tested  in relation  to the  Company's 
interim results for the  six months ended 31  March 2013, which the  Directors 
believe may  happen unless  the  Rights Issue  is  completed and  the  Amended 
Facilities (which are conditional on the  Rights Issue) come into effect.  The 
consequences of a breach of covenant by the Group could be extremely serious.

The Directors believe that the Rights Issue will enable Lonmin to continue  to 
exploit its long-life, high-quality ore resources at Marikana and benefit from
what the Directors believe are positive longer-term fundamentals for  platinum 
and other PGMs, for the benefit of Shareholders.



Lonmin's fundamental strengths

(i) Operations located in the world's premier PGM deposit

Lonmin's operations  are  located in  the  world's premier  PGM  deposit,  the 
Bushveld Complex in South  Africa, which contains nearly  80 per cent. of  the 
world's known PGM  resources and accounts  for a significant  majority of  the 
global supply of  PGMs, especially the  two most valuable  in terms of  price, 
platinum and rhodium.

(ii) Long-life  mineral resource  base backed  by long-term  New Order  Mining 
Rights

Lonmin has a  long-life mineral resource  base backed by  long-term New  Order 
Mining Rights. As at 30 September  2012, the Company had 175.2 million  ounces 
of mineral resources,  including 41.3  million ounces of  mineral reserves  of 
platinum, palladium, rhodium and gold. The Company's mineral resources provide
a source of supply  that is expected  to last for decades  at its current  and 
anticipated future rates of mining.  All of the Company's Marikana  operations 
hold fully  converted  New Order  Mining  Rights  granted by  the  DMR.  Those 
relating to the Company's  future generation of shafts  are valid until  2037, 
with a right to apply for renewal thereafter for periods of up to a further 30
years at a time.

(iii) Significant  inherent  value  in  existing  infrastructure  and  mineral 
reserves

Lonmin actively  manages  its assets  through  the commodity  cycle,  and  has 
historically placed certain shafts  on care and  maintenance when mining  such 
shafts is not  profitable. Despite  these short-term  tactical decisions,  the 
Directors regard these  assets as key  to realising the  longer-term value  of 
Lonmin's  mineral  reserves  and  mineral  resources  and  believe  that   the 
replacement cost  of both  above and  below-ground assets  is very  high.  The 
Company's mining infrastructure at  Marikana has seen considerable  investment 
in recent  years, with  approximately US$1.3  billion of  capital  expenditure 
incurred in the four  financial years ended 30  September 2012. The  Directors 
believe that the significant investment that  has been made in developing  ore 
reserves and additional mine shaft  hoisting capacity to enable future  growth 
provides the Company  with a  degree of operational  flexibility which  should 
enable it to increase production in  the event that market conditions  improve 
in the short term. In addition, this expenditure has resulted in a more robust
and efficient Process Division.

(iv) Attractive  long-term fundamentals  for PGM  markets, despite  short-term 
volatility

In the short term, the Directors believe that PGM prices will remain  volatile 
whilst economic  uncertainty prevails,  but over  the medium  and longer  term 
industry dynamics remain favourable. In particular, the Directors believe that
the following factors could underpin an improvement in PGM prices:

· the Directors believe that primary supply of PGMs is likely to contract
in the short term,  primarily as a  result of the  recent and on-going  labour 
unrest  in  South  Africa,  which  historically  and  currently  accounts  for 
approximately 75 per cent. of global primary mine supply;

· there is a positive medium-term outlook for vehicle sales in the US and
Chinese markets that will likely increase  demand for PGMs for utilisation  in 
autocatalysts;

· auto  and non-road  emissions legislation  is increasing  in scope  and 
becoming more stringent  (including in  Europe through the  Euro VI  emissions 
legislation, which comes into effect on  1 January 2014), which the  Directors 
believe will result in higher loadings of PGM per vehicle catalyst; and

· despite downgrades to Chinese growth expectations, consumer expenditure
in China is still expected  to increase over the  near and medium term,  which 
suggests that jewellery sales will remain stable in the near term.

Following the Events at Marikana and  other developments in South Africa,  the 
Directors  believe  that  the  moderate  platinum  market  deficit  previously 
estimated by the Company will increase in 2013, before a supply-side  response 
in the  industry will  likely  result in  this  deficit returning  to  current 
estimated deficit levels  by 2016.  By way  of comparison,  a platinum  market 
surplus persisted from 2008 to 2012.

(v) Maximising value through vertical integration

Lonmin is able to maximise value  through vertical integration as one of  only 
four integrated  "mine-to-market"  primary PGM  producers.  Through  producing 
refined metals rather  than intermediate  products such  as concentrates,  the 
Directors believe that  the Company is  able to enhance  operating margins  by 
carrying out each value-adding step from  mining ore to refining the  finished 
metal, so that  it is  not required to  surrender this  margin to  third-party 
refiners.  The  Company  also  gains   insight  into  end-market  trends   and 
developments from its longstanding relationships with key industrial customers
which would not  otherwise be  available. The capital  investment required  to 
replicate the  chain  of  concentrators,  smelters  and  refineries  would  be 
considerable to any  new entrant  or non-vertically  integrated producer,  and 
certain technical steps  require either  the use  of proprietary  intellectual 
property or other  know-how gained  from many years'  experience of  operating 
these plants.

(vi) Operational gearing

Lonmin's operational gearing  arises from  its relatively  high proportion  of 
fixed as opposed to variable costs. As a result, once production and sales  of 
finished metal have reached  levels which provide revenue  to cover the  fixed 
cost base, any incremental sales become highly profitable for the Company.  By 
comparison, financial  exposure to  PGM prices  through purchases  of ETFs  or 
physical metal do not provide the  advantages which can accrue to the  Company 
at higher production levels because of this operational gearing.

(vii) Industry-leading expertise in processing UG2 ore

The Western Limb of the Bushveld Complex  contains two reefs of ore, known  as 
UG2 and Merensky, which have  differing mineralogical properties. The UG2  ore 
in the Company's principal mining areas  in the Bushveld Complex is  generally 
of a higher grade than Merensky ore in the same mining areas, and occurs  over 
a greater width, making this  ore easier to extract.  Over the last 20  years, 
the Company has  predominantly mined  the UG2  reef rather  than the  Merensky 
reef, with UG2 ore typically comprising  approximately 70-75 per cent. of  the 
Company's total mine production. Accordingly,  the Directors believe that  the 
Company  is  an   industry  leader   in  overcoming   the  mineralogical   and 
metallurgical challenges of  processing UG2  ore, which is  more difficult  to 
smelt, and has also recently been generating additional revenue for the chrome
extracted from this ore.  By contrast, its major  competitors in the  Bushveld 
Complex have generally focused  on the Merensky reef,  and are now facing  the 
need to shift their operations to the UG2 reef as their Merensky reef  mineral 
resources become depleted.

(viii) Excellence in processing

The Company  has materially  improved the  performance and  resilience of  its 
processing plants  over  recent years.  The  concentrators are  now  achieving 
levels of PGM recoveries among the highest in their history and, following the
chrome sales agreements entered into in 2010, Lonmin has been able to open the
first of a series of tailings retreatment plants to extract further PGMs  from 
waste material  returned  by  the  Company's  chrome-processor  partners.  The 
Company has not experienced any material  disruptions in the operation of  its 
main smelting furnace, Number One Furnace, since June 2010 and, in July  2012, 
the first  matte  was tapped  from  the new  Number  Two Furnace,  which  uses 
well-established smelting  technology  and  is expected  to  reduce  the  risk 
profile of the Company's smelting operations yet further. The BMR and PMR have
been the subject of  significant and continuing  management attention and  are 
delivering strong performance following the initiatives undertaken.

(ix) Mining operations at shallower depths than competitors

Lonmin mines at a shallower average depth than its competitors. Greater mining
depths generally imply  higher costs  due to  increased cooling  requirements, 
higher electricity consumption and higher capital costs. As a result, there is
an increasing cost advantage to those whose mining operations are at shallower
depths, especially as energy prices rise. The deepest point currently  reached 
in the Company's  operations is 1,331  metres below surface,  and the  average 
depth of current mining activities is approximately 400 metres below  surface. 
The Directors believe that  this average depth is  shallower than that of  the 
Company's principal peers and competitors in South Africa.

(x) An experienced management team with a strong track record

The Directors believe that  the Company benefits from  the wealth of  directly 
relevant experience shared by its  Executive Directors and Senior  Executives. 
The  Company's  management   team  possesses   wide-ranging  expertise,   from 
exploration through to the development  and operation of mines and  downstream 
processing facilities, as well as experience in managing the support  services 
necessary to run such operations successfully. Ian Farmer, the Company's Chief
Executive Officer, has been employed by the Company for 26 years. Simon Scott,
the Company's Chief Financial Officer and Acting Chief Executive Officer,  has 
held a number of senior financial management roles in South Africa with  local 
and global employers, including a total of nine years with Anglo American. The
Directors believe that the  current management team  has developed a  thorough 
understanding of  the characteristics  of Lonmin's  mineral deposits  and  the 
ability to  drive efficiencies  in  the exploration  and exploitation  of  its 
mineral reserves and mineral resources.

Following the  appointment  of  Ian  Farmer  as  Chief  Executive  Officer  in 
September 2008, the  Company embarked  on a significant  restructuring of  the 
business, enhancing its  cost control, closing  loss-making shafts and  making 
significant reductions in the workforce, including approximately one-third  of 
management at the time.

On 16 August 2012, the Company announced  that Mr Farmer was diagnosed with  a 
serious illness and in  hospital and on 24  August 2012 the Company  announced 
that Mr Scott had been appointed as Acting Chief Executive Officer.



Impact on operations of the Events at Marikana

The Events  at  Marikana  were  directly responsible  for  the  loss  of  mine 
production estimated  at 1.8  million tonnes  of ore  containing an  estimated 
110,000 ounces  of  platinum  in the  fourth  quarter  of the  year  ended  30 
September 2012. As the Company was able to maintain operations in the  Process 
Division by processing stockpiles during the  Events at Marikana, albeit at  a 
materially reduced level, sales were less heavily impacted. Sales for the 2012
financial year were  701,831 platinum  ounces, 2.6  per cent.  lower than  the 
720,783 ounces achieved in the 2011 financial year, and PGM sales were 3.6 per
cent. lower than the  prior year at 1,383,945  PGM ounces, despite  benefiting 
from the depletion of stocks in the pipeline. The loss of sales contributed to
an increase in unit costs during the year ended 30 September 2012 relative  to 
the prior year. The processing of the Group's stockpiles has resulted in these
being largely depleted and,  as described above, the  impact of the Events  at 
Marikana will  continue  to  be felt  in  the  2013 financial  year,  as  some 
production will be used to refill the Process Division pipeline and  replenish 
stockpiles rather than flowing through to sales.



Lonmin's operational exposure to PGM pricing and foreign exchange movements

Lonmin's policy is not  to hedge commodity price  exposure on PGMs,  excluding 
gold, and therefore any change  in prices has a  direct effect on the  Group's 
trading results. The approximate effects on the Company's operating profit  of 
a 10 per cent. movement in the  average metal prices achieved by the Group  in 
the year ended 30 September 2012 for platinum (US$1,517 per ounce),  palladium 
(US$630 per  ounce)  and  rhodium  (US$1,274 per  ounce),  the  three  highest 
revenue-generating PGMs to the Company's business, would be as follows:

                                  Platinum         Palladium           Rhodium
Underlying operating
profit in theyear
ended 30 September 2012 +/− US$106million +/− US$21million +/− US$15million

These sensitivities are estimated calculations  based on costs and volumes  in 
the period and assume all  other variables, including foreign exchange  rates, 
remain constant.

In addition  to Lonmin's  operational  gearing to  PGM commodity  prices,  the 
Company's trading results  are sensitive to  fluctuations in foreign  exchange 
rates, specifically between the  US dollar and the  Rand. The majority of  the 
Group's revenues are derived from sales  denominated in US dollars, while  the 
majority of the  Group's operating  costs, capital expenditure  and taxes  are 
paid in Rand. Therefore, a strengthening of the Rand against the US dollar has
an adverse effect on profits and margins. By way of example of the approximate
impact on the  Group's profitability  of movements in  the Rand  to US  dollar 
exchange rate, a 10 per  cent. movement in the Rand  to US dollar average  and 
closing exchange rates in the year ended 30 September 2012, which were ZAR8.05
and  ZAR8.30  respectively,  would  have  impacted  the  Company's  underlying 
operating  profit  in  the  same   period  by  (+/−)  US$117  million.   These 
sensitivities are based on PGM prices, operating costs and volumes in the 2012
financial year and assume all other variables remain constant.



Lonmin's actions to increase productivity, reduce costs and conserve capital

(i) Focus on safe and profitable mining

During the 2012 financial year, the market price of PGMs has been volatile, in
large part due to general global macro-economic conditions, with the depressed
environment in  the  Eurozone having  a  particular  impact on  the  price  of 
platinum. Prior to the Events at Marikana, the Board had commenced a review of
Lonmin's growth  strategy, future  production profile  and capital  investment 
programme as a result of the emerging weak short-term demand outlook for  PGMs 
and the weak short-term pricing environment.

At the time  of its  full year  results for  the 2011  financial year,  Lonmin 
provided guidance on its planned capital expenditure of around US$450  million 
for the 2012 financial year, based on  the then outlook for PGM markets.  This 
guidance was reiterated at  the time of publication  of the Company's  interim 
results in  May 2012,  recognising  the uncertain  near-term outlook  for  PGM 
prices (the price  of platinum had  fallen from  a 2012 peak  of US$1,722  per 
ounce on  28 February  2012 to  US$1,440 by  the time  of publication  of  the 
Company's interim results on 14 May 2012), and stating the Company's intention
to defer future capital expenditure if appropriate.

By the time of publication of the  Third Quarter Production Report on 26  July 
2012, the platinum price had remained  below US$1,500 per ounce for more  than 
eleven weeks, and Lonmin  acknowledged that the  weak pricing environment  was 
likely to  persist for  longer  than anticipated.  As  a result,  the  Company 
announced that capital expenditure would  be reduced to around US$430  million 
in the 2012 financial year (reflecting the  proximity of the year end and  the 
lead-time relating to  capital expenditure programmes),  and to around  US$250 
million in each of the 2013 and 2014 financial years. This reduction would  be 
achieved principally through the  deferral of capital spend  on the Hossy,  K4 
and Saffy  shafts, as  well as  the  optimisation of  some of  the  processing 
projects. As a result of the  Events at Marikana, Lonmin further announced  on 
17 September 2012 that, as part of its ongoing capital expenditure review,  it 
would be moving its  K4 shaft to  care and maintenance and  that it had  given 
notice to terminate its contract with Murray and Roberts, the contractor which
supplied approximately 1,200 staff at the K4 shaft with effect from 17 October
2012.

The Board maintains a close focus on  the outlook for PGM markets and  intends 
to bring the  K4 shaft back  into production in  the latter part  of the  2014 
financial year, in order to help deliver the Company's production targets  and 
in anticipation of improvements  in demand for, and  pricing of, PGMs. The  K4 
shaft, therefore,  remains a  key  part of  the Company's  longer-term  growth 
plans.

(ii) Realising alternative forms of value

In the  2011 and  2012  financial years  Lonmin,  together with  its  partners 
Xstrata and ChromTech, successfully developed a series of chrome and  tailings 
treatment plants  at various  of Lonmin's  Marikana operations  including  the 
Rowland, K4, Karee  B and Easterns  sites. The chrome  plants achieved  chrome 
sales of 730,278 tonnes  and 1,209,643 tonnes in  the 2011 and 2012  financial 
years, respectively. The tailings treatment plants, which were operational for
the second half  of the 2012  financial year, helped  to improve Lonmin's  PGM 
recoveries by  0.8 per  cent. in  that  year. Overall,  the chrome  sales  and 
improved PGM recoveries  which have  resulted from  this initiative  generated 
additional profit for Lonmin of US$11.3 million in the 2012 financial year.

In addition, in March 2012, the Company took advantage of a historically  high 
gold price  by entering  into a  pre-paid sale  of 70,700  gold ounces  to  be 
delivered over a period of approximately 54 months resulting in a one-off cash
inflow of US$107 million.  The average gold price  in March 2012 was  US$1,674 
per ounce,  compared to  an average  gold price  for the  year to  the  Latest 
Practicable Date of US$1,665 per ounce, and an average gold price for the last
3 years to the Latest Practicable Date  of US$1,459 per ounce. It remains  the 
Company's policy not to hedge the price of its core PGM commodities.



The Lonmin Renewal Plan

In light of the Events at Marikana, the focus of and priority for the  Company 
during the 2013 financial  year is to return  productivity levels safely  back 
to, and  then above,  the run-rates  achieved  prior to  those events  and  to 
improve relationships with employees. Part  of this will require  implementing 
sustainable inclusive collective  bargaining structures  that facilitate  wage 
agreements that are accepted by all  the relevant stakeholders to be  binding. 
Lonmin has announced plans to target production at Marikana of around  680,000 
platinum ounces of metal in concentrate in the year ending 30 September  2013, 
although platinum sales for the year ending 30 September 2013 are expected  to 
be around 660,000 ounces as in-process inventory levels are rebuilt within the
Process Division. The ramp-up back to these normalised levels of  productivity 
is so far progressing better than  planned and the Directors fully expect  the 
Marikana operations  to  be  operating  at  previously  achieved  productivity 
run-rates during the third quarter of the 2013 financial year.

The Board intends to continue to monitor developments in PGM market conditions
closely and may accelerate or delay planned investment if it deems doing so to
be in the best interests of Shareholders.

The projections and  forward-looking statements in  this announcement are  not 
guarantees of future performance  and actual results  and events could  differ 
materially  from  those   expressed  or  implied   by  these   forward-looking 
statements. Numerous factors  could cause or  contribute to such  differences. 
Please refer to  the part of  the Prospectus entitled  "Risk Factors" and  the 
section headed  "Forward-looking statements"  in the  part of  the  Prospectus 
entitled "Important Information".

(i) Future platinum sales in the Lonmin Renewal Plan

Beyond the 2013 financial year, the Company is continuing to target growth  in 
production which the Directors  believe will result in  an improvement to  its 
relative position on the cost curve. On the basis of the Lonmin Renewal  Plan, 
the Directors are targeting sales in excess of 750,000 platinum ounces in each
of the 2014 and 2015 financial years, and in excess of 800,000 platinum ounces
per annum by the 2016 financial year. K4, which when at full capacity will  be 
one of Lonmin's largest shafts and which is currently on care and maintenance,
is expected  to restart  mining operations  in  the latter  part of  the  2014 
financial year although  the impact  on production will  initially be  gradual 
until  capital  expenditure  levels  increase.  This  revised  growth  profile 
reflects both  the anticipated  short-term demand  outlook for  PGMs, and  the 
impact on Lonmin's operations of the Events at Marikana.

However, the  Directors  believe  that the  significant  investment  that  the 
Company has made in developing ore reserves and additional mine shaft hoisting
capacity to  enable  future growth  provides  the  Company with  a  degree  of 
operational flexibility, which should enable it to increase production in  the 
event that market conditions improve in the short term. By way of example,  as 
at 30  September 2012,  the  Company had  immediately available  ore  reserves 
equating to approximately 18 months of mining, which the Directors believe  to 
be a prudent level.  The Company's planned capital  expenditure over the  next 
two financial years is expected at least to maintain this level of ore reserve
availability.

(ii) Future capital expenditure in the Lonmin Renewal Plan

In order to achieve the targeted level of production Lonmin expects to  invest 
approximately US$175 million  for the  2013 financial  year and  approximately 
US$210 million for the  2014 financial year (depending  on the Rand/US  dollar 
exchange rate). Of the aggregate capital expenditure planned for the 2013  and 
2014 financial  years,  approximately US$260  million  relates to  the  Mining 
Division with the  balance relating to  the Process Division  and to spend  as 
part of the Company's social and labour plan commitments. In the 2015 and 2016
financial years, the Directors  expect that capital  expenditure will rise  to 
around US$400  million per  annum (depending  on the  Rand/US dollar  exchange 
rate). The step-up in capital expenditure from 2015 onwards primarily  relates 
to further  development  in  Hossy, Saffy  and  K4  in order  to  support  the 
increased production levels and processing projects. However, the increase  in 
capital expenditure in the  2015 and 2016 financial  years is contingent  upon 
performance in the earlier  years and the Directors  believing, at that  time, 
that there is sufficient market demand and sufficiently attractive pricing for
PGMs to  warrant the  increased investment.  The thresholds  in the  financial 
covenant linked to capital expenditure within the Amended Facilities described
below, which may or may not be  tested, have been set at approximately 10  per 
cent. above the budgeted levels of capital expenditure outlined above.

(iii) Future cost profile in the Lonmin Renewal Plan

The Events  at Marikana  have  created two  specific  cost pressures  for  the 
Company in the 2013 financial year. First, the agreement entered into with the
trade unions and worker representatives  increased the wages paid to  Lonmin's 
workers employed in the  Category 3-9 bargaining units  by about 14 per  cent. 
from 1 October 2012, which includes the wage increase of 9 per cent. due under
the existing wage  agreement signed  in 2011.  As a  result, employment  costs 
overall will increase by approximately 11 per cent. in the 2013 financial year
against normalised employee costs in the 2012 financial year. Secondly,  there 
is inefficiency inherent in any production ramp-up, as the business bears  the 
full costs of operations,  but does not achieve  full production in the  early 
stages of that ramp-up.  As a result, the  Directors anticipate unit costs  of 
around ZAR 9,350 per PGM ounce produced for the 2013 financial year.

A number of measures are  in place, or are  expected to be implemented  during 
the 2013 financial year, both to address the pressures of gross cost increases
and also  to improve  the effectiveness  of the  Company's expenditure.  These 
measures include:

· A  review of  the  Company's operating  model,  as well  as  management 
structure, to align with the Lonmin Renewal Plan is expected to yield  savings 
in excess of ZAR200 million per annum,  on an annualised basis, with the  full 
effect from 2014 onwards;

· A procurement initiative  known as "Total Cost  of Ownership" is  being 
implemented which is expected to yield savings of ZAR100 million in the second
half of  the  2013  financial  year and  in  each  subsequent  financial  year 
thereafter; and

·  The  Company  has  already  completed  and  embedded  a   productivity 
enhancement programme  known as  "Line of  Sight" and  "Mission Directed  Work 
Teams", which will form  the foundation for a  series of further  productivity 
and optimisation initiatives  in the 2013  financial year. Team  effectiveness 
training trials at  various shafts in  the Karee mining  unit during the  2012 
financial year have  shown the  potential of  this initiative,  which will  be 
extended across Lonmin during the 2013 financial year. This will be  supported 
by improved systems and training, particularly for supervisory management.

The Directors  believe  that,  taken  together,  these  initiatives  have  the 
potential to improve the productivity performance of the Company.

The Directors  expect that  over  the medium  to  longer term,  the  Company's 
earliest generation of shafts  will reach the end  of their economic lives  as 
their mineral reserves are depleted. However,  the Company has, over the  past 
several years, undertaken  a number  of capital projects,  principally at  its 
second generation of shafts, K3, Hossy, Saffy and K4, which, when fully ramped
up should drive production growth and improve its relative unit cost position.

Taken together,  the cost  savings,  volume-related operational  benefits  and 
efficiencies anticipated  in  the  Lonmin  Renewal  Plan  lead  the  Directors 
currently to expect that unit costs for the 2014 financial year will  increase 
by less than wage inflation in South Africa.

This is predicated  on there being  no further significant  disruption to  the 
Company's operations and all  other cost increases being  in line with  recent 
market norms.

(iv) Lonmin's approach to social licence

The Board  is  of  the  view that  delivering  on  transformation  and  social 
responsibility obligations  is an  essential element  of Lonmin's  licence  to 
operate in South Africa,  both legally in terms  of its obligations under  the 
Mining Charter and morally as a good corporate citizen of the country.  Lonmin 
has transformation  goals  which were  established  in line  with  the  Mining 
Charter and are aligned to its Social Labour Plan commitments. The Company has
worked with determination  to accomplish  the goals it  has set  and has  made 
significant achievements in  many areas, notably  in its education  programmes 
for its communities,  in the number  of HDSA employees  within its  management 
structures, which now stands at 36  per cent. (excluding white women), and  in 
its initiatives to  procure from  HDSA managed and  owned suppliers.  Lonmin's 
gender related policies and procedures designed to increase the  participation 
of women in the Company have had some success, with the number of women at the
Company having  grown  by  66  per  cent. since  2007,  but  there  are  still 
challenges in order to meet its 2014 commitments.

Nevertheless, the  Directors recognise  that the  Company has  delivered  more 
slowly in other areas.  The Events at Marikana  and recent strikes across  the 
entire mining industry  make it  clear that  Lonmin must  continue and,  where 
necessary, accelerate its  efforts in some  initiatives, working more  closely 
and cooperatively with key stakeholders, particularly employees and local  and 
central government and communities. Two  particularly relevant areas of  focus 
are housing and the Company's relationship with its communities.

Housing is the hardest task the wider mining sector faces in terms of  targets 
it has been set.  Lonmin is far from  alone in trying to  deal with what is  a 
national problem in South Africa.

Lonmin's housing  strategy has  comprised three  elements: hostel  conversion, 
Marikana housing ownership and the  long-term housing programme. To date,  the 
Company has converted 79 of the  128 old-style hostels into 931 single  person 
occupancy and  580  family  units and  has  a  detailed plan  to  convert  the 
remaining blocks by 31 December 2014. The Company has also seen 242  employees 
and community  members  become owners  of  homes, sold  through  the  Marikana 
Housing Development Company.

The challenge  however is  in facilitating  the provision  of mass  affordable 
employee accommodation particularly for  the Company's migrant workforce.  The 
Events at  Marikana  have  highlighted the  critical  shortage  of  affordable 
housing as a  major challenge  for Lonmin and  the South  African nation  more 
broadly, reflecting the need  for a solution  that involves all  stakeholders, 
including government, mining companies  and employees. Management is  engaging 
with employees and all  stakeholders as necessary  to understand better  their 
requirements as part of developing a framework for a sustainable and  fundable 
solution. The Company recognises there will be a cost to this and will develop
appropriate budgets in due course.

The partnership  Lonmin  has  with  the Greater  Lonmin  Community  where  its 
operations are  based is  important to  the Company.  For over  18 years,  the 
Company has paid royalties into a trust  fund on behalf of the Bapo ba  Mogale 
tribal community.  The amount  of funds  paid over  to date  is  approximately 
ZAR371 million.  The Company  has in  recent times  seen the  benefits of  its 
long-term investment  in education  and  health through  improved  examination 
results and various  health initiatives. There  is still much  to be done  and 
Lonmin needs to work more closely with its communities to improve dialogue and
rebuild trust as  this will be  key to enhancing  better relations with  them. 
Lonmin's management team will be focusing on this in the coming months.



Lonmin's actions to improve financial flexibility

(i) Existing Facilities Agreements

During the first  half of 2011,  Lonmin entered into  new facility  agreements 
(the  "Existing  Facilities  Agreements")   pursuant  to  which  it   obtained 
approximately US$929 million  equivalent (based on  a Rand/US dollar  exchange 
rate of ZAR8.66 at  31 October 2012) of  new credit facilities (the  "Existing 
Facilities") with its group of lending banks, comprising:

· a US$700  million syndicated  US Dollar facilities  agreement (the  "US 
Dollar Facilities Agreement"), comprising a US$300 million term loan  facility 
(the "US Dollar  Term Loan") and  a US$400 million  revolving credit  facility 
(the "US Dollar Revolving  Credit Facility", and together  with the US  Dollar 
Term Loan, the "US Dollar Facilities"); and

· three  South African  Rand bilateral  facilities agreements  of  ZAR660 
million each (together, the "Rand Facilities Agreements").

The financial  covenants  in the  US  Dollar Facilities  Agreement  require  a 
maximum net debt  / EBITDA  ratio of  4.0 times, and  a minimum  EBITDA /  net 
interest ratio of  3.5 times,  calculated at  the Group  level. The  financial 
covenants in  the Rand  Facilities Agreements  require a  maximum net  debt  / 
EBITDA ratio of 3.5 times,  and a minimum EBITDA /  net interest ratio of  3.5 
times, calculated at the WPL and EPL levels. Each of these financial covenants
is tested at 30 September and 31 March in each financial year.

The financial covenants in the Existing Facilities Agreements have come  under 
increasing pressure as  a result  of the weak  PGM price  environment and  the 
Events at Marikana. In addition, the Directors believe that these covenants do
not provide  the Group  with sufficient  financial flexibility  in a  volatile 
price environment  and  that  they  do not  adequately  reflect  the  security 
provided by Lonmin's  significant asset backing  through its mineral  resource 
base and operational infrastructure. The Directors have therefore entered into
amended credit  facilities agreements  (the "Amended  Facilities  Agreements") 
with the Group's lenders.

(ii) Amended Facilities Agreements

The Amended Facilities Agreements will only come into effect if the Resolution
is passed, the Rights Issue is completed and raises at least US$700 million of
net proceeds by 31 December 2012 and such net proceeds are used to (i)  cancel 
and prepay in full amounts outstanding under the US Dollar Term Loan; and (ii)
(to the extent of the remaining net  proceeds of the Rights Issue) prepay  all 
amounts outstanding under  the US Dollar  Revolving Credit Facility,  provided 
that the  US Dollar  Revolving Credit  Facility will  remain available  to  be 
re-drawn following such prepayment, albeit subject to amended terms. If the US
Dollar Facilities  have been  prepaid in  full,  then the  terms of  the  Rand 
Facilities will be amended to reflect an equivalent financial covenant package
as has  been  negotiated  in  terms of  the  US  Dollar  Facilities  Amendment 
Agreement and amounts  outstanding under  the Rand Facilities  may be  prepaid 
with the excess proceeds of the Rights Issue.

The principal amendments to the  Existing Facilities Agreements are to  remove 
the net debt/EBITDA and  EBITDA/net interest covenants  and to substitute  the 
following financial covenants into each of these agreements:

· consolidated tangible net worth will not be less than US$2,250 million;

· consolidated net  debt will  not exceed  25 per  cent. of  consolidated 
tangible net worth; and

· if:

· in respect of the amended US Dollar Facilities Agreement, the aggregate
amount of outstanding loans exceeds US$75 million at any time during the  last 
6 months of any test period; or

· in respect of both the  amended US Dollar Facilities Agreement and  the 
amended Rand  Facilities  Agreements,  consolidated net  debt  exceeds  US$300 
million as of the last day of any test period,

the capital expenditure of the Group must not exceed the limits set out in the
table below, provided that, if 110  per cent. of budgeted capital  expenditure 
for any test period  ending on or  after 30 September 2013  is lower than  the 
capital expenditure limit  set out in  the table below  for that test  period, 
then the capital expenditure limit for that test period shall be equal to  110 
per cent. of such budgeted capital expenditure.

Test Period                                    Capital Expenditure Limit (ZAR)
1 October 2012 to 31 March 2013 (inclusive)              800,000,000
1 October 2012 to 30 September 2013                     1,600,000,000
(inclusive)
1 April 2013 to 31 March 2014 (inclusive)               1,800,000,000
1 October 2013 to 30 September 2014                     2,000,000,000
(inclusive)
1 April 2014 to 31 March 2015 (inclusive)               3,000,000,000
1 October 2014 to 30 September 2015                     4,000,000,000
(inclusive)
1 April 2015 to 31 March 2016 (inclusive)               4,000,000,000
1 October 2015 to 30 September 2016                     4,000,000,000
(inclusive)



(iii) Importance  of  the Amended  Facilities  Agreements and  target  capital 
structure

Without the Amended Facilities Agreements, which are conditional on completion
of the Rights Issue, receipt by the Company of at least US$700 million of  net 
proceeds  by  31  December  2012,  subsequent  prepayment  of  the  US  Dollar 
Facilities as outlined  above, and  the satisfaction  of customary  conditions 
precedent, the Directors believe that the  Group may breach either or both  of 
the covenants in the  Existing Facilities Agreements when  they are tested  in 
relation to the Company's interim results  for the six months ending 31  March 
2013. The Directors  also believe  that, for the  six months  ending 31  March 
2013, the Group's leverage ratio is likely to exceed 3.5:1, and in that  case, 
the financial covenants in the  Existing Facilities Agreements will be  tested 
on a quarterly (rather  than a half-yearly  basis) for the  next year and  the 
applicable leverage ratio  must not exceed  3.5:1 during that  period. If  the 
covenants are tested on this basis,  the Directors expect that the Group  will 
breach either or both of the net debt/EBITDA and EBITDA/net interest covenants
in the Existing Facilities Agreements when they are tested as at 30 June  2013 
and that there is a material  risk of further covenant breaches at  subsequent 
test dates,  in the  event that  the Rights  Issue does  not proceed  and  the 
Amended Facilities Agreements do not come into effect.

The Directors therefore believe it to  be imperative that the Company  swiftly 
puts in place a  robust capital structure which  can be sustained through  the 
current economic cycle for PGMs.

The Group  intends to  maintain a  low level  of financial  gearing given  the 
exposure of  the business  to fluctuations  in PGM  commodity prices  and  the 
Rand/US dollar exchange  rate, as  well as  the need  to withstand  short-term 
shocks to the business. The Board believes that the Company's long-life assets
should be substantially  funded by long-term  equity capital, supplemented  by 
free cash flow, with appropriate levels  of debt funding available to  provide 
additional financial  flexibility for  the  Group as  well  as to  reduce  its 
overall cost of capital.  In this context, the  Board views debt financing  as 
providing the  flexibility  required  to fund  the  Company's  normal  working 
capital requirements  and  to  accommodate  short-term  cash  flow  volatility 
inherent in an operationally  geared business arising from  either or both  of 
movements in the price of PGMs and the Rand/US dollar exchange rate. The Board
recognises that  the business  cannot support  significant financial  leverage 
given its high level of operational  gearing. In addition, the Board  believes 
that it would be more appropriate  for the Group's debt facilities to  contain 
covenants that are linked to capital expenditure and tangible net worth rather
than covenants  linked to  profitability, which  in the  Board's view  do  not 
reflect the significant  asset backing that  underpins the longer-term  credit 
quality of the  Group. The  Board therefore  believes that  entering into  the 
Amended Facilities Agreements, which are subject to the conditions outlined in
the previous paragraph, is in all Shareholders' interests.



Black Economic Empowerment

The Company is  required to  increase HDSA  ownership in  its prospecting  and 
mining ventures by 31  December 2014 to  the 26 per  cent. required under  the 
Mining  Charter.  As  at  30  September  2012,  HDSA  investors  directly  and 
indirectly  owned  18  per  cent.  of  the  share  capital  of  the  Company's 
subsidiaries that own and operate Marikana and Limpopo and that participate in
the Pandora joint venture, as well as 26 per cent. of the share capital of its
subsidiary that owns Akanani.

The Company's BEE partner, Incwala Resources,  is owned as to 50.03 per  cent. 
of its equity by Shanduka. Other equity investors in Incwala Resources include
a trust  for the  benefit  of community  members, the  Industrial  Development 
Corporation of South Africa Limited and Lonmin itself. In considering how best
to meet  its  HDSA ownership  requirements  by  31 December  2014,  the  Board 
believes that one  element it  must consider is  how to  achieve further  HDSA 
ownership through a  broad-based solution as  this will ultimately  be in  the 
best interests of Shareholders.

It is possible that the Company may wish to facilitate the creation of  trusts 
for the benefit of current and future employees, and separately for members of
the Greater Lonmin Community, to which new Shares could be allotted for  their 
sole  economic  benefit.   In  order   to  achieve  this   increase  in   HDSA 
participation, the Company  is considering  a range of  options involving  the 
issuance  of  additional   Shares  which   could  dilute   the  interests   of 
Shareholders. The Company has not yet finalised its proposals, and any  future 
transaction would need to  be considered on its  merits and may require  prior 
Shareholder approval.



Conclusion

The Board remains confident of the  longer-term potential of Lonmin, with  its 
high-quality asset base and  long-term mining licences,  and in the  long-term 
fundamentals of the  PGM industry, and  its primary focus  continues to be  on 
preserving and enhancing value for all Shareholders.

However, in  spite  of  the  actions being  taken  to  reduce  costs,  improve 
productivity and ration capital  expenditure, Lonmin's profitability and  cash 
flows are  under  pressure  and  remain  highly  geared  to  the  PGM  pricing 
environment and Rand/US dollar exchange rate movements. The Events at Marikana
resulted in a material reduction in mine production at a time when the Company
was not well-positioned to absorb the resulting financial shock.

Against this background the  Board has concluded that  raising equity now,  by 
way of  the  Rights  Issue, is  in  the  best interests  of  the  Company  and 
Shareholders as a whole.

The Rights Issue is expected to  raise approximately US$817 million (in  gross 
proceeds), and will substantially strengthen the Company's financial position.
The Board believes  the Rights Issue  will result in  immediate and  long-term 
benefits, and in particular will:

· allow  Lonmin to  withstand the  shorter-term adverse  operational  and 
financial impact of the Events at Marikana  and help fund the ramp-up back  to 
normalised production levels;

· improve Lonmin's  ability to withstand  potential adverse movements  in 
other external  factors,  specifically the  PGM  pricing environment  and  the 
Rand/US dollar exchange rate;

· allow Lonmin  to continue to  invest in future  growth and improve  its 
relative position on the cost curve; and

· reduce the Group's borrowings and annual interest charge and, alongside
the Amended Facilities,  provide Lonmin with  incremental financial  liquidity 
and more appropriate financial covenants.



MANAGEMENT UPDATE

As previously notified, Ian Farmer,  Chief Executive Officer, is undergoing  a 
course of treatment and has been on sick leave since August.

Simon Scott was appointed Acting Chief Executive Officer on 24 August 2012. He
has ably handled  the extremely  difficult circumstances since  the Events  at 
Marikana in August and has been strongly supported by his executive team.  His 
operational team of Albert Jamieson, Barnard Mokwena, Mark Munroe and Natascha
Viljoen have all worked at Lonmin for many years and have been responsible for
the significant improvement  in the  operational performance  of the  business 
that has occurred since 2008.

Roger Phillimore and Mahomed Seedat have joined the Executive Committee, which
has responsibility for the day-to-day business  of the Company and is  chaired 
by Simon. Mahomed was Chief Operating Officer at Lonmin until the end of 2010.
In order to  support Simon  further, Alan  Ferguson, who  was Chief  Financial 
Officer until  December  2010,  has  been working  with  him  as  a  part-time 
consultant. Mahomed and Alan bring with  them an in-depth knowledge of  Lonmin 
which has been invaluable at this challenging time.

The executive  team is  supported  by the  Non-Executive Directors,  who  have 
considerable recent and relevant experience  of the mining industry and  South 
Africa.

The current arrangements are  appropriate for the time  being and are  working 
well to stabilise the Company and  bring production back to normal. The  Board 
keeps under  constant  and  critical review  the  best  way to  proceed  on  a 
permanent basis and will take  the necessary steps as  and when it deems  them 
appropriate.



USE OF PROCEEDS

The net  proceeds of  the Rights  Issue will  be used  to prepay  the  Group's 
indebtedness under  the  Existing  Facilities Agreements,  including  (i)  the 
prepayment in full of  amounts outstanding (amounting  to US$300 million  plus 
accrued interest and  applicable break fees)  under the US  Dollar Term  Loan, 
which facility will then  be cancelled; (ii) (to  the extent of the  remaining 
net proceeds  of  the Rights  Issue)  the prepayment  of  amounts  outstanding 
(amounting to US$400 million plus accrued interest and applicable break  fees) 
under  the  US  Dollar  Revolving  Credit  Facility;  and  (iii)  the  partial 
prepayment of amounts outstanding (amounting  to ZAR 1,980 million  equivalent 
as at 31  October 2012, which  is equivalent to  approximately US$229  million 
(based on a Rand/US  Dollar exchange rate of  ZAR8.66), plus accrued  interest 
and applicable  break  fees)  under  the  Rand  Facilities  Agreements.  These 
prepayments  will   significantly   reduce  the   Group's   indebtedness   and 
substantially strengthen its financial position.

The full amount under the US Dollar Revolving Credit Facility (US$400 million)
and the full amount under the Rand Facilities (ZAR 1,980 million) will  remain 
available to be drawn by the Group when required, subject to the terms of  the 
Amended Facilities Agreements.

In addition, a portion of the gross Rights Issue proceeds will be used to  pay 
fees relating to the Rights Issue (approximately US$40 million).



CURRENT TRADING AND PROSPECTS

The Company's published platinum sales target for the 2012 financial year  was 
approximately 750,000 ounces. Platinum sales  for the year ended 30  September 
2012, at 701,831 ounces,  were approximately 93.6 per  cent. of the full  year 
target and approximately 2.6 per cent.  lower than the 720,783 ounces sold  in 
the 2011 financial year. The sales shortfall compared to the sales target  was 
largely attributable to the Events at Marikana.

PGM prices were under downward pressure  in the year ended 30 September  2012, 
with the Company's  average PGM  basket price, excluding  base metal  revenue, 
during the 2012  financial year declining  by 15.7 per  cent. to US$1,095  per 
ounce from US$1,299 per ounce in the 2011 financial year and the average price
of platinum during  the 2012  financial year declining  by 14.2  per cent.  to 
US$1,517 per  ounce  from US$1,769  per  ounce  in the  2011  financial  year. 
However, the  price weakness  in US  Dollar terms  was largely  offset by  the 
weakening of  the Rand  against  the US  Dollar,  resulting in  the  Company's 
overall Rand PGM basket price, excluding base metal revenue, declining by  3.3 
per cent. from the prior year.

Recent European macroeconomic uncertainty could  put downward pressure on  the 
market prices  of PGMs.  For example,  demand for  platinum could  decline  in 
connection with reduced  demand for  diesel powered  vehicles which  currently 
predominantly use platinum as  their catalyst. In  addition, according to  SFA 
(Oxford) Ltd, industrial  users of  PGMs have  taken advantage  of recent  low 
prices to increase their stocks  of PGMs, particularly palladium and  rhodium, 
at a time when the  rate of global growth is  unclear. However, the Events  at 
Marikana and subsequent strike  action at almost all  other South African  PGM 
producers have, given the importance of South African producers to global  PGM 
production, in a short space of time  altered the outlook for the supply  side 
of the PGM industry.  These events have increased  operating costs for  Lonmin 
and other companies  in the South  African PGM mining  industry, while at  the 
same time creating supply constraints which have contributed to an increase in
PGM prices. The Board  believes that the disruption  to the South African  PGM 
mining industry is also  likely to result in  some capacity reductions in  the 
near term as higher cost operations are forced to reduce output or close down,
or in  the  longer  term  as  reduced  capital  expenditure  plans  defer  the 
production of replacement or growth ounces  in the future. The Board  believes 
that these factors should sustain improved pricing for PGMs.

Over the longer term, the Board also believes that improved PGM pricing should
be supported  by underlying  positive demand  dynamics. Automotive  demand  is 
expected to be  driven by  a combination of  increasingly stringent  emissions 
legislation, the ongoing extension of this regime to non-road applications and
a positive medium-term outlook  for vehicle sales in  US and Chinese  markets. 
Although Chinese growth expectations  have recently been downgraded,  consumer 
expenditure in China is still expected to increase with positive  implications 
for jewellery sales.

The production of Platinum ounces as saleable metal in concentrate is forecast
to be around 680,000  ounces for the  2013 financial year.  This is below  the 
Company's previous expectations for two reasons associated with the Events  at 
Marikana: first,  due to  the  estimated time  required  to return  to  normal 
productivity levels; and, secondly, due to  the impact of lower capital  spend 
and the  suspension  of  production  at the  K4  shaft  which,  as  previously 
announced, was placed on care and maintenance in September 2012.

This metal in concentrate  output is expected to  result in Platinum sales  of 
around 660,000 ounces  for the 2013  financial year. The  shortfall of  around 
20,000 ounces from the  metal in concentrate  output represents the  necessary 
build-up of pipeline ounces in the smelters and the refineries during the 2013
financial year to  replace stocks depleted  during the fourth  quarter of  the 
2012 financial year.

As at 31 October 2012, the  Group's net debt was approximately US$550  million 
(unaudited), an  increase  of approximately  US$129  million compared  to  the 
Company's audited net debt as at 30 September 2012 of US$421 million.

The increase in the  Company's net debt  since the end  of the 2012  financial 
year is a result of:

•  costs incurred by the Group in ramping up production following the Events
at Marikana (which have been funded by drawing down amounts under the  Group's 
Existing Facilities); and

•   a very  significant decrease  in revenue  since the  financial year  end 
(unaudited revenue in the month of October 2012 was US$8 million, compared  to 
unaudited revenue  in the  month of  October  2011 of  US$48 million)  as  the 
Company has sought to rebuild in-process inventories following the  disruption 
caused by the Events at Marikana, which has contributed to a very  significant 
reduction in sales of refined PGMs during October 2012.



DIVIDEND POLICY

Whilst dividends are not affordable in  the short term, Lonmin has  confidence 
in the future demand  for PGMs and  its expectation is for  prices to firm  in 
response to anticipated supply deficits in the future. The Directors are  also 
determined to increase the  effectiveness of the  Group's operations, in  both 
production and  cost terms.  While  there are  challenges  to be  overcome  in 
achieving  this,  the  Directors  believe  the  opportunity  to  increase  the 
effectiveness of  the  Group's operations  exists  and a  return  to  stronger 
earnings and cash flows will permit the resumption of dividends at some  point 
in the future. When  the payment of dividends  is resumed the Directors  would 
intend to follow the existing policy  of declaring an ordinary final  dividend 
at a rate which  the Board expects  can at least  be maintained in  subsequent 
years  or  possibly  increased  over   time.  This  final  dividend  will   be 
supplemented by  special  dividends when  the  Group's reported  earnings  and 
projected cash requirements allow.



PROPOSALS FROM XSTRATA

In September 2012,  shortly following  the tragic Events  at Marikana,  Lonmin 
approached Xstrata about the possibility of an equity capital raise. At  that 
meeting, Xstrata proposed the potential acquisition by Lonmin of Xstrata's PGM
and Alloys  division  together  with  an  inter-conditional  rights  issue  by 
Lonmin. The transaction concept outlined by Xstrata at that time was  similar 
to an earlier proposal made  by Xstrata in early  2011, which was rejected  by 
the  Board  as  being  unattractive   in  several  respects  for   non-Xstrata 
shareholders of Lonmin.

As part  of reviewing  all available  funding options,  Lonmin instructed  its 
executive and advisory teams to engage constructively with their  counterparts 
at Xstrata. This process lasted for a  number of weeks to allow both teams  to 
explore the transaction concept further and allow Xstrata to develop a  formal 
proposal. A proposal, structured as a  reverse takeover, was made by  Xstrata 
on 12 October 2012 and envisaged:

§ the  acquisition  of  Xstrata's  South  African  PGM,  chrome  and  vanadium 
businesses in consideration of Lonmin Shares;

§ an  inter-conditional  rights  issue  of  US$1.0bn,  fully  underwritten  by 
Xstrata;

§ Xstrata's shareholding in the enlarged Lonmin business being increased to 70
per cent. or more, depending on whether  Xstrata was required to take up  more 
than its pro rata share of the rights issue; and

§ a revised  Lonmin board  of directors  comprising 11  members, with  Xstrata 
having the right to appoint the  chairman and four other directors,  including 
the Chief Executive Officer and Chief Financial Officer.

After careful  consideration, on  the 19  October 2012,  Lonmin rejected  this 
proposal on the basis that:

§ the inter-conditionality of the  rights issue and the acquisition,  combined 
with the  numerous  other  conditions  and  pre-conditions  contained  in  the 
proposal meant that  it would have  been impossible, in  the Board's view,  to 
conclude such a transaction  on the timetable being  proposed by Xstrata at  a 
time when  Lonmin's priority  was to  restore the  financial strength  of  the 
Group;

§ consequently, it did not offer the funding certainty which Lonmin sought and
thus would have seriously undermined its negotiating position with Xstrata and
its banking group; and

§ Lonmin's Board believed that the economic terms offered by Xstrata were  not 
attractive for non-Xstrata shareholders in Lonmin and failed to compensate for
the change of control which would occur.

The Board of Lonmin subsequently confirmed in writing to Xstrata on 2 November
2012 that discussions on the proposal had terminated on 19 October 2012.

The Board of Lonmin had  made it clear that it  would be prepared to  consider 
any revised proposal that  Xstrata wished to make  on its merits; however,  no 
revised proposal was made by Xstrata.

On the afternoon of 8 November 2012, Xstrata wrote to the Board of Lonmin that
it was prepared  to support the  Rights Issue, conditional  upon the Board  of 
Lonmin publicly committing to replace  Lonmin's Executive Directors and  enter 
into a management services agreement with Xstrata. Pursuant to that agreement,
Xstrata would provide management services  to Lonmin's operations through  the 
provision of appropriately qualified individuals to assume senior positions at
Lonmin, including the appointment of the chief executive officer.

The Board considered Xstrata's letter of 8 November 2012 and concluded that it
would not  be appropriate  to agree  to the  conditions contained  in it.  In 
particular, whilst the Board of Lonmin continues to hope Xstrata will be  able 
to support the Rights Issue  by taking up its rights  in full, it believes  it 
would be wholly inappropriate for the  Board to cede such substantial  control 
to a single minority shareholder.

SUMMARY OF THE PRINCIPAL TERMS OF THE RIGHTS ISSUE

The Rights Issue  is intended to  raise net proceeds  of approximately  US$777 
million. The Rights Issue is being underwritten (save in respect of those  New 
Shares which the Directors  have irrevocably undertaken to  take up) by  Citi, 
HSBC, J.P.  Morgan  Cazenove,  Standard  Bank,  BNP  Paribas,  Investec,  Rand 
Merchant Bank and Standard Chartered. A  summary of the material terms of  the 
Underwriting Agreement will be set out in the Prospectus. In the UK, Greenhill
is acting as sponsor  in relation to  the Rights Issue  and, in South  Africa, 
J.P. Morgan Equities Limited is acting  as transaction sponsor in relation  to 
the Rights Issue.

Subject to the fulfilment of, amongst others, the conditions described  below, 
the New Shares will be offered for subscription to Qualifying Shareholders  by 
way  of  Rights  at  140  pence  per  New  Share,  in  respect  of  Qualifying 
Shareholders (other than  Qualifying South African  Shareholders), or, in  the 
case of  Qualifying South  African Shareholders,  ZAR 19.4872  per New  Share, 
payable in full on acceptance. The Rights Issue will be on the basis of:

                   9 New Shares for every 5 Existing Shares

held by and registered  in the names of  Qualifying Shareholders (other  than, 
subject to  certain  exceptions,  Qualifying  Shareholders  resident  or  with 
registered addresses in the United States or any of the Excluded  Territories) 
on the  relevant Record  Date and  so in  proportion to  any other  number  of 
Existing Shares each Qualifying  Shareholder then holds  and otherwise on  the 
terms and conditions set out in the Prospectus and, in the case of  Qualifying 
Non-CREST  Shareholders  or  Qualifying  South  African  Shareholders  holding 
certificated  Shares  (other  than,   subject  to  certain  exceptions,   such 
Shareholders resident or with registered addresses in the United States or any
of the Excluded Territories),  the Provisional Allotment  Letters or Forms  of 
Instruction respectively.

The UK Issue Price  of 140 pence per  New Share, which is  payable in full  by 
Qualifying Shareholders (other than Qualifying South African Shareholders)  on 
acceptance by no  later than  11:00 a.m. (London  time) on  10 December  2012, 
represents:

· a 69.1 per cent. discount to the closing price of an Existing Share;

· a 44.4  per cent.  discount to the  theoretical ex-Rights  price of  an 
Existing Share,

in each case based on  the closing middle-market price  of 452.8 pence on  the 
LSE on the last business day prior to the date of announcement of the terms of
the Rights Issue.

The SA Issue Price of ZAR 19.4872 per  New Share, which is payable in full  by 
Qualifying South African  Shareholders who hold  their Shares in  certificated 
form on  acceptance by  no later  than  1:00 p.m.  (Johannesburg time)  on  10 
December 2012, represents:

· a 69.7 per cent.  discount to the closing  price of an Existing  Share; 
and

· a 45.0  per cent.  discount to the  theoretical ex-Rights  price of  an 
Existing Share,

in each case based on the  closing price of ZAR 64.22  on the JSE on the  last 
business day prior  to the date  of announcement  of the terms  of the  Rights 
Issue.

Fractions of New Shares arising under the Rights Issue will not be allotted to
Qualifying Shareholders and, where necessary, fractional entitlements will  be 
rounded down to the nearest whole  number of New Shares. Holdings of  Existing 
Shares in  certificated  form  and  uncertificated form  will  be  treated  as 
separate holdings for the purpose of calculating entitlements under the Rights
Issue.

Applications have been made for  the New Shares to  be admitted to listing  on 
the premium segment of the  Official List and to  trading on the London  Stock 
Exchange's main market for  listed securities. It  is expected that  Admission 
will become effective and dealings will commence (nil paid) in the New  Shares 
at 8:00 a.m. (London time) on 20 November 2012.

Application has been made to JSE Ltd for the Letters of Allocation and the New
Shares to be admitted to listing and trading on the Main Board of the JSE.  It 
is expected  that  South African  Admission  will become  effective  and  that 
dealings on the  JSE in the  Letters of Allocation  (on a deferred  settlement 
basis) will commence at 9:00 a.m. (Johannesburg time) on 20 November 2012  and 
in the New Shares (fully paid) will commence at 9:00 a.m. (Johannesburg  time) 
on 4 December 2012.

Any changes to  the timetable of  the Rights  Issue will be  announced by  the 
Company in accordance with  applicable rules in the  United Kingdom and  South 
Africa.

The Rights Issue is conditional upon:

a) the  passing  of the  Resolution  by  the Shareholders  at  the  General 
Meeting;

b) Admission becoming effective by not  later than 8:00 a.m. (London  time) 
on 20 November 2012  (or such later  time and/or date as  the Company and  the 
Underwriters may agree,  but provided that  the Acceptance Date  is not  later 
than 10 January 2013);

c) admission of the  New Shares and Letters  of Allocation to listing  and 
trading on the JSE's  Main Board for listed  securities becoming effective  by 
not later than Admission; and

d) the  Underwriting  Agreement  otherwise becoming  unconditional  in  all 
respects (other than in regard to Admission and the South African  Admission), 
and not  having  been  terminated  in  accordance  with  its  terms  prior  to 
Admission.

The New  Shares will,  when issued  and fully  paid, rank  pari passu  in  all 
respects with the Existing Shares, including  the right to receive all  future 
dividends and other  distributions declared, made  or paid after  the date  of 
their issue.

The Rights Issue will  result in the  issue of up  to 365,503,264 New  Shares, 
which  will  form  approximately  64.3  per  cent.  of  the  Shares  in  issue 
immediately following the Rights Issue.

The offer of New Shares  pursuant to the Rights Issue  is not being, and  will 
not be, made by means of the Prospectus  into the United States or any of  the 
Excluded Territories or any other  jurisdiction outside the United Kingdom  or 
South Africa in which it would be illegal to make an offer. In order to comply
with the  provisions  of  the  Companies  Act, the  offer  of  New  Shares  to 
Qualifying Shareholders with registered addresses outside the EEA and who have
not given the Company  an address within  the EEA for  the serving of  notices 
will be made  to such  Shareholders through a  notice in  the London  Gazette, 
details of which will be provided in the Prospectus.

Further information on the Rights Issue, including the terms and conditions of
the Rights  Issue  and  the  procedure for  acceptance  and  payment  and  the 
procedure in respect of Rights not taken up will be set out in the  Prospectus 
and, where relevant, will  be set out in  the Provisional Allotment Letter  or 
the Form of Instruction.

DIRECTORS' INTENTIONS

Each Director who holds Shares (other than Ian Farmer, in light of the  course 
of treatment he is  receiving) has undertaken  to take up in  full his or  her 
Rights to subscribe for New Shares under the Rights Issue in respect of his or
her beneficial holding, which together  amount to 74,115 Shares,  representing 
0.03 per cent. of the issued ordinary  share capital of the Company as at  the 
date of the Prospectus.



EXPECTED TIMETABLE OF PRINCIPAL EVENTS IN THEUNITED KINGDOM

Each of the times and dates in the table below is indicative only and may be
subject to change.

Approval of prospectus by UKLA..............................................................................                                  9 November
                                                                                                                                                    2012
Restrictions on transfers between UKRegister andSA Register begin.............                                                               5:00p.m.
                                                                                                                                                   on 15
                                                                                                                                                November
                                                                                                                                                    2012
Record date for entitlement under the Rights Issue for Qualifying CREST Shareholders and Qualifying Non-CREST                                  5:00p.m.
Shareholders.................................                                                                                                      on 15
                                                                                                                                                November
                                                                                                                                                    2012
Latest time and date for receipt of forms of proxy                                                                                             5.00 p.m.
                                                                                                                                                   on 16
                                                                                                                                                November
                                                                                                                                                    2012
General Meeting..........................................................................................................                      9:30 a.m.
                                                                                                                                                   on 19
                                                                                                                                                November
                                                                                                                                                    2012
Despatch of Provisional Allotment Letters (to Qualifying Non-CREST Shareholders                                                                       19
only)^(1).............................................................................................                                          November
                                                                                                                                                    2012
Notice to be published in the London Gazette.......................................................                                                   19
                                                                                                                                                November
                                                                                                                                                    2012
Start of subscription period.....................................................................................                                     20
                                                                                                                                                November
                                                                                                                                                    2012
Dealings in New Shares, nil paid, commence on the London Stock Exchange..                                                                      8:00a.m.
                                                                                                                                                   on 20
                                                                                                                                                November
                                                                                                                                                    2012
Existing Shares marked "ex" by the London Stock Exchange..............................                                                         8:00a.m.
                                                                                                                                                   on 20
                                                                                                                                                November
                                                                                                                                                    2012
Nil Paid Rights credited to stock accounts in CREST (Qualifying CREST Shareholders                                                             8:00a.m.
only)^(1).............................................................................................                                             on 20
                                                                                                                                                November
                                                                                                                                                    2012
Nil Paid Rights and Fully Paid Rights enabled in CREST.....................................                                                    8:00a.m.
                                                                                                                                                   on 20
                                                                                                                                                November
                                                                                                                                                    2012
Recommended latest time and date for requesting withdrawal of Nil Paid Rights and Fully Paid Rights from CREST (i.e.if your Nil Paid Rights   4:30p.m.
and Fully Paid Rights are in CREST and you wish to convert them to certificated                                                                     on 4
form)...................................................................................................                                        December
                                                                                                                                                    2012
Latest time for depositing renounced Provisional Allotment Letters, nil or fully paid, into CREST or for dematerialising Nil Paid Rights or    3:00p.m.
Fully Paid Rights into a CREST stock account (i.e.if your Nil Paid Rights and Fully Paid Rights are represented by a Provisional Allotment         on 5
Letter and you wish to convert them to uncertificated form)..........................................                                           December
                                                                                                                                                    2012
Latest time and date for splitting Provisional Allotment Letters, nil or fully                                                                 3:00p.m.
paid............................................................................................................................                    on 6
                                                                                                                                                December
                                                                                                                                                    2012
Latest time and date for acceptance, payment in full and registration of renunciation of Provisional Allotment                                11:00a.m.
Letters.................................................                                                                                           on 10
                                                                                                                                                December
                                                                                                                                                    2012
Results of the Rights Issue announced^(2)...............................................................                                       7:00a.m.
                                                                                                                                                   on 11
                                                                                                                                                December
                                                                                                                                                    2012
Dealings in New Shares, fully paid, commence on the London Stock                                                                               8:00a.m.
Exchange.....................................................................................................................................      on 11
                                                                                                                                                December
                                                                                                                                                    2012
New Shares credited to CREST stock accounts......................................................                                              8:00a.m.
                                                                                                                                                   on 11
                                                                                                                                                December
                                                                                                                                                    2012
Restriction on transfers between UK Register and SA Register ends................                                                              8:00a.m.
                                                                                                                                                   on 11
                                                                                                                                                December
                                                                                                                                                    2012
Despatch of definitive share certificates for the New Shares in certificated form                                                                  By no
                                                                                                                                              later than
                                                                                                                                                      18
                                                                                                                                                December
                                                                                                                                                    2012

Notes:

1. The  Rights Issue  is subject  to certain  restrictions relating  to 
Shareholders with registered addresses  in the United  States or the  Excluded 
Territories, details of which will be set out in the Prospectus.

2. The  results of  the Rights  Issue will  be announced  by way  of  a 
simultaneous RIS  and SENS  announcement  at 7:00  a.m.  (London time)  on  11 
December 2012.

3. The times and dates set  out in the expected timetable of  principal 
events above and mentioned throughout the Prospectus may be adjusted by Lonmin
in consultation with the Underwriters, in which event details of the new times
and dates  will be  notified to  the UK  Listing Authority,  the London  Stock 
Exchange  and,  where  appropriate,  Qualifying  Shareholders  by  way  of   a 
simultaneous RIS and SENS announcement.

4. References to times in this timetable are to London time.



EXPECTED TIMETABLE OF PRINCIPAL EVENTS INSOUTH AFRICA

Each of the times and dates in the table below is indicative only and may be
subject to change.

Rights Issue announcement......................................................................................                   9 November
                                                                                                                                        2012
Restrictions on transfers between UKRegister andSA Register begins...........                                                 7:00p.m. on
                                                                                                                                 15 November
                                                                                                                                        2012
Latest time and date for receipt of Forms of Proxy                                                                              7:00 p.m. on
                                                                                                                                 16 November
                                                                                                                                        2012
Shareholders Meeting                                                                                                            11:30a.m. on
                                                                                                                                          19
                                                                                                                                November2012
Last day to trade Existing Shares on the JSE to qualify to participate in the Rights Issue (cum                                  19 November
Rights)......................................................................................                                           2012
In respect of Qualifying South African Shareholders who hold their Shares in certificated form, commencement of period during       Close of
which the SA Registrar will not register the transfer of Existing Shares.............................                            business on
                                                                                                                                 20 November
                                                                                                                                        2012
Listing of and trading in Letters of Allocation on the JSE on a deferred settlement basis                                       9:00a.m. on
begins........................................................................................                                   20 November
                                                                                                                                        2012
Existing Shares marked "ex" by the JSE...................................................................                       9:00a.m. on
                                                                                                                                 20 November
                                                                                                                                        2012
Despatch of Forms of Instruction to Qualifying South African Shareholders who hold their Shares in certificated                 5:00p.m. on
form^(1)...................................................                                                                      23 November
                                                                                                                                        2012
Record date for entitlements under the Rights Issue for Qualifying South African                                                 26 November
Shareholders.............................................................................................                               2012
In respect of Qualifying South African Shareholders who hold their Shares in certificated form, end of period during which the      Close of
SA Registrar will not register the transfer of Existing Shares..............................................................     business on
                                                                                                                                 26 November
                                                                                                                                        2012
Qualifying South African Shareholders who hold their Shares in uncertificated form will have their accounts at their CSDP or    9:00a.m. on
broker automatically credited with their Letters of Allocation (Rights Issue                                                     27 November
opens)^(1)...................................................................................................................           2012
Qualifying South African Shareholders who hold their Shares in certificated form will have their Letters of Allocation credited 9:00a.m. on
to an account held with theSA Registrar (Rights Issue opens)^(1)..........................                                      27 November
                                                                                                                                        2012
In respect of Qualifying South African Shareholders who hold their Shares in certificated form wishing to sell all or part of     12:00p.m.
their Letters of Allocation, latest time and date for submission of Form of Instruction to                                              on 3
SARegistrar..............................................................................................................          December
                                                                                                                                        2012
Last day to trade Letters of Allocation on the JSE to settle trades by the closing date of the Rights Issue in order to         5:00p.m. on
participate in the Rights Issue                                                                                                   3 December
                                                                                                                                        2012
Listing and trading of New Shares on the JSE and dealings in New Shares on a deferred settlement basis                          9:00a.m. on
commence........................................................                                                                  4 December
                                                                                                                                        2012
Rights Issue closes.....................................................................................................        1:00p.m. on
                                                                                                                                 10 December
                                                                                                                                        2012
Record Date for Letters of Allocation......................................................................                         Close of
                                                                                                                                 business on
                                                                                                                                 10 December
                                                                                                                                        2012
CSDP/broker accounts credited with New Shares and debited with payments due in respect of New Shares in uncertificated          9:00a.m. on
form^(7)................                                                                                                         11 December
                                                                                                                                        2012
Results of Rights Issue announced^(2) .....................................................................                     9:00 a.m. on
                                                                                                                                 11 December
                                                                                                                                        2012
Results of Rights Issue announced in the press...................................................                               9:00a.m. on
                                                                                                                                 11 December
                                                                                                                                        2012
Restrictions on transfers between UKRegister andSA Register ends..............                                                9:00a.m. on
                                                                                                                                 11 December
                                                                                                                                        2012
Despatch of definitive share certificates for the New Shares in certificated                                                     By no later
form...........................................................................................................................      than 18
                                                                                                                                    December
                                                                                                                                        2012

Notes:

1. The Rights Issue is subject to certain restrictions relating to
Shareholders with registered addresses in the United States or the Excluded
Territories, details of which will be set out in the Prospectus.

2. The results of the Rights Issue will be announced by way of a
simultaneous RIS and SENS announcement at 9:00 a.m. (Johannesburg time) on 11
December 2012.

3. The times and dates set out in the expected timetable of principal
events above and mentioned throughout the Prospectus may be adjusted by Lonmin
in consultation with the Underwriters, in which event details of the new times
and dates will be notified to JSE Ltd and, where appropriate, Qualifying South
African Shareholders and announced by way of a simultaneous RIS and SENS
announcement.

4. References to times in this timetable are to Johannesburg times.

5. Qualifying South African Shareholders who hold their Shares in
uncertificated form are required to inform their CSDP or broker of their
instructions in terms of the Rights Issue in the manner and time stipulated in
the agreement governing the relationship between the shareholder and their
CSDP or broker.

6. Share certificates may not be dematerialised or rematerialised
between 19 November 2012 and 26 November 2012, both days inclusive. Qualifying
South African Shareholders who hold their Existing Shares in uncertificated
form will have their accounts at their CSDP or broker automatically credited
with their Letters of Allocation and Qualifying South African Shareholders who
hold their Existing Shares in certificated form will have their Letters of
Allocation credited to an account with the SA Registrar.

7. CSDPs effect delivery in respect of Qualifying South African
Shareholders who hold their shares in uncertificated form on a delivery versus
payment method.

This announcement is not for release, publication or distribution, directly or
indirectly, in whole or in part, in  or into theUnited Statesor, in or  into 
any of theExcludedTerritories. This announcement does not constitute or form
part of an offer or solicitation in respect of the Nil Paid Rights, the  Fully 
Paid Rights,  the  New Shares  or  the  Letters of  Allocation  in  theUnited 
Statesor any of theExcludedTerritories. In particular, the Nil Paid Rights,
the Fully Paid Rights, the New  Shares and the Letters of Allocation  referred 
to in this announcement -

· have not been and will not be registered under the US Securities Act of
1933 (the "US Securities Act") or the securities legislation of any other  any 
State or other jurisdiction of the United States and may not be offered, sold,
taken up,  exercised, resold,  pledged, renounced,  transferred or  delivered, 
directly or  indirectly,  within  the  United States  except  pursuant  to  an 
applicable exemption from the registration  requirements of the US  Securities 
Act and in  compliance with  any applicable securities  laws of  any State  or 
other jurisdiction of the United States. There will be no public offer of  the 
Nil Paid Rights, the Fully Paid Rights, the Letters of Allocation or the  New 
Shares in the United States;

· have not and will not be  offered, sent or credited to any  shareholder 
with a registered address in Australia;

· have not been and will not be qualified by prospectus for offer or sale
to  the  public  inCanadaunder  applicable  Canadian  securities  laws   and 
accordingly, no  offer or  sale of  Nil Paid  Rights, Fully  Paid Rights,  New 
Shares or Letters  of Allocation  will be  made inCanada  and no  Provisional 
Allotment Letter or Form of Instruction will be sent to any Shareholder in  or 
with a registered address in Canada; and

·  have  not  been  and  will  not  be  registered  under  the  Financial 
Instruments and Exchange  Law of  Japan, as  amended (the  ''FIEL'') and  this 
announcement does not constitute an offer of securities for sale, directly  or 
indirectly, in Japan or to, or for the benefit of, any resident of Japan or to
others for reoffer or resale, directly or  indirectly, in Japan or to, or  for 
the benefit of, any  resident in Japan, except  pursuant to an exemption  from 
the registration requirements under the FIEL and otherwise in compliance  with 
such  law  and  such  other  applicable  laws,  regulations  and   ministerial 
guidelines in Japan.

This announcement does not  constitute an invitation or  offer to sell or  the 
solicitation of an  invitation or an  offer to buy  New Shares or  to take  up 
entitlements to Nil Paid Rights, Fully Paid Rights or Letters of Allocation in
any  jurisdiction  in  which  such  offer  or  solicitation  is  unlawful  and 
accordingly persons  who  come into  possession  of this  announcement  should 
inform themselves  about and  observe any  such restrictions.  Any failure  to 
comply with these restrictions  may constitute a  violation of the  securities 
law of any such jurisdiction.

This announcement includes  forward-looking statements within  the meaning  of 
the securities laws of certain jurisdictions. These forward-looking statements
include,  but  are  not  limited  to,  statements  other  than  statements  of 
historical fact including, without  limitation, those regarding the  Company's 
intentions, beliefs or  current expectations concerning,  among other  things, 
the Company's results of  operations, financial condition, prospects,  growth, 
strategies and  the industry  in which  the Company  operates.Forward-looking 
statements are typically identified by the use of forward-looking  terminology 
such as "believes",  "expects", "may", "will",  "could", "should",  "intends", 
"estimates", "plans", "assumes"  or "anticipates" or  the negative thereof  or 
other variations  thereon  or comparable  terminology,  or by  discussions  of 
strategy   that   involve   risks   and   uncertainties.By   their    nature, 
forward-looking statements involve risks and uncertainties, including, without
limitation, the risks  and uncertainties to  be set forth  in the  Prospectus, 
because they relate to events and depend on circumstances that may or may  not 
occur in the future; actual events or results may differ materiallyfrom those
expressed in  or  implied  by  these  statementsas  a  result  of  risks  and 
uncertainties facing the Company and its subsidiaries.Many of these risks and
uncertainties relate  to factors  that  are beyond  the Company's  ability  to 
control or estimate precisely,  such as changes  in future market  conditions, 
currency fluctuations, the behaviour of other market participants, the actions
of governmental  regulators and  other risk  factors such  as changes  in  the 
political, social and regulatory framework in which the Company operates or in
economic or  technological  trends  or  conditions,  including  inflation  and 
consumer confidence, on a global,  regional or national basis.Such risks  and 
uncertainties could cause actual  results to vary  materially from the  future 
results indicated, expressed  or implied in  such forward-looking  statements. 
The forward-looking statements contained in this announcement speak only as of
the date of this announcement and the Company undertakes no duty to update any
of them publicly in light of new  information or future events, except to  the 
extent required by applicable law, the Prospectus Rules, the Listing Rules and
the Disclosure and Transparency Rules.

ISIN CODES

The ISIN code for the New Shares will be the same as that of the Existing
Shares being GB0031192486.

The ISIN code for the Nil Paid Rights is GB00B844GQ10 and for the Fully Paid
Rights is GB00B731C910.

DEFINITIONS

The following definitions shall apply throughout this announcement unless the
context requires otherwise:



''Admission''                         admission of the New Shares to the
                                      Premium Segment of the Official List and
                                      to trading, nil paid, on the London
                                      Stock Exchange's main market for listed
                                      securities;
''ADR holders''                       the holders of any ADRs from time to
                                      time and ''ADR Holder'' means any one of
                                      them;
''ADRs''                              American Depositary Receipts evidencing
                                      American Depositary Shares issued by the
                                      Depositary pursuant to the Deposit
                                      Agreement;
"Amended Facilities"         the Amended US Dollar Facility and
                                      Amended Rand Facilities;
"Amended Rand                         the Rand Facilities as proposed to be
Facilities"            amended;
"Amended US Dollar                    the US$400 million revolving credit
Facility"              facility to be made available pursuant
                                      to the US Dollar Facilities Amendment
                                      Agreement;
''BEE''                               broad based black economic empowerment,
                                      or black economic empowerment, which
                                      arises as a result of the following
                                      South African legislation: the
                                      Employment Equity Act No. 55 of 1998;
                                      the Skills Development Act No. 97 of
                                      1998; the Preferential Procurement
                                      Policy Framework Act No. 5 of 2000; the
                                      Broad Based Black Economic Empowerment
                                      Act No. 53 of 2003; the MPRDA and the
                                      Mining Charter;
''BNP Paribas''                       BNP PARIBAS, a French société anonyme;
"Banks"                               each of Greenhill, the SA Sponsor and
                                      the Underwriters;
''Board'' or ''Directors''            the board of directors of the Company;
''certificated form''                 in relation to a share or other
                                      security, a share or other security
                                      which is not in uncertificated form
                                      (that is, not in CREST or Strate);
''Citi''                              Citigroup Global Markets Limited;
"Companies Act"                       the Companies Act 2006;
''Company'' or ''Lonmin''             Lonmin Plc, a company registered in
                                      England and Wales with registered number
                                      103002 and registered as an external
                                      company in South Africa under
                                      registration number 1969/000015/10;
''CREST''                             the computerised system for the
                                      paperless settlement of sales and
                                      purchases of securities and the holding
                                      of uncertificated securities operated by
                                      Euroclear UK & Ireland in accordance
                                      with the CREST Regulations;
''CREST Regulations''                 the Uncertificated Securities
                                      Regulations 2001 (SI 2001 No. 3755), as
                                      from time to time amended;
''CSDP''                              Central Securities Depository
                                      Participant, a "participant" as defined
                                      in the Securities Services Act;
"Deposit Agreement"                   the amended and restated deposit
                                      agreement dated 25 February 2002 between
                                      the Company, the Bank of New York Mellon
                                      and holders from time to time of ADRs;
"Depositary"                          the Bank of New York Mellon, as
                                      depositary under the Deposit Agreement;
"Disclosure and Transparency Rules"   the disclosure rules and transparency
                                      rules of the FSA;
''EBITDA''                            earnings before interest, tax,
                                      depreciation and amortisation;
''EPL''                               Eastern Platinum Limited, a subsidiary
                                      of the Group in which Lonmin has an 82
                                      per cent. interest;
''ETF''                               Exchange Traded Fund and references to
                                      ETFs are references to platinum,
                                      palladium or rhodium ETFs, funds
                                      generally backed by physical metal, the
                                      performance of which replicates the
                                      performance of the relevant metal's
                                      price;
''Euroclear UK & Ireland''            Euroclear UK & Ireland Limited, the
                                      operator of CREST;
"Events at Marikana"                  the illegal strike at the Company's
                                      Marikana operations in August and
                                      September 2012;
''Excluded Territories''              the Commonwealth of Australia, its
                                      territories and possessions, Canada, and
                                      Japan and ''Excluded Territory'' means
                                      any one of them;
''Existing Shares''                   the Shares in issue at the Record Date;
''Form of Instruction''               each of the forms of instruction, to be
                                      posted to Qualifying South African
                                      Shareholders who hold their Existing
                                      Shares in certificated form, in respect
                                      of their Letters of Allocation and
                                      reflecting the entitlement of that
                                      Qualifying Shareholder to Nil Paid
                                      Rights;
''FSA''                               the Financial Services Authority acting
                                      in its capacity as the competent
                                      authority for listing in the UK for the
                                      purposes of Part VI of the FSMA;
''FSMA''                              the Financial Services and Markets Act
                                      2000 (as amended);
''Fully Paid Rights''                 rights to acquire the New Shares fully
                                      paid;
"General Meeting"                     the general meeting of Lonmin to be held
                                      in connection with the Rights Issue,
                                      notice of which was sent to Shareholders
                                      as part of an explanatory circular on 2
                                      November 2012;
"Greenhill"                          Greenhill & Co. International LLP;
''Group''                             Lonmin and its subsidiary undertakings
                                      (as defined in the Companies Act);
''HDSA''                              historically disadvantaged South
                                      Africans, as defined in the Mining
                                      Charter. It refers to South African
                                      citizens who were disadvantaged by
                                      unfair discrimination before the
                                      implementation of the Constitution of
                                      the Republic of South Africa in 1993;
''HDSA shareholders''                 companies owned by HDSAs which are
                                      shareholders in Incwala Resources;
"HSBC"
                                      HSBC Bank plc;
''Incwala'' or ''Incwala Resources''  Incwala Resources (Proprietary) Limited,
                                      a company incorporated in accordance
                                      with the laws of South Africa;
''Investec''                          Investec Bank plc;
''ISIN''                              International Security Identification
                                      Number;
''Issue Price''                       the UK Issue Price or the SA Issue
                                      Price, as appropriate;
''J.P. Morgan Cazenove''              J.P. Morgan Securities plc;
''JSE''                               the securities operated by the JSE Ltd;
"JSE Ltd"                             JSE Limited, a company incorporated in
                                      accordance with the laws of South Africa
                                      and licensed to operate a securities
                                      exchange in terms of the Securities
                                      Services Act;
"JSE Listings Requirements"           the JSE Limited Listings Requirements in
                                      force as at the Latest Practicable Date;
''Latest Practicable Date''           7 November 2012 (being the latest
                                      practicable date for the inclusion of
                                      information in this announcement prior
                                      to the finalisation of this
                                      announcement);
''Letter of Allocation                a renounceable letter of allocation
                                      issued by the Company in electronic form
                                      conferring Nil Paid Rights on a
                                      Qualifying South African Shareholder;
"Listing Rules"                       the listing rules made by the UKLA
                                      pursuant to Part VI of FSMA;
''London Stock Exchange''             London Stock Exchange plc;
"Mining Charter"                      the Amendment of the Broad-Based Socio
                                      Economic Empowerment Charter for the
                                      South African Mining and Minerals
                                      Industry published in September 2010 in
                                      terms of Section 100(2) of the MPRDA,
                                      including any amendment, supplement,
                                      replacement or successor thereto, and
                                      any legislation or regulation of a
                                      similar or related nature adopted in
                                      South Africa;
"Mining Division"                     the division of the Company that defines
                                      mineral reserves and mineral resources,
                                      sinks shafts and develops and operates
                                      mines supplying ore to the Process
                                      Division;
"MPRDA"                               the South African Mineral and Petroleum
                                      Resources Development Act No. 28 of
                                      2002;
''New Shares''                        the new Shares of US$1 each to be issued
                                      pursuant to the Rights Issue;
''Nil Paid Rights''                   in the case of Qualifying Shareholders
                                      (other than Qualifying South African
                                      Shareholders), New Shares in nil paid
                                      form provisionally allotted to such
                                      Qualifying Shareholders pursuant to the
                                      Rights Issue and, in the case of
                                      Qualifying South African Shareholders,
                                      the right to subscribe for New Shares at
                                      the SA Issue Price, as represented by
                                      Letters of Allocation automatically
                                      credited to their CSDP or broker
                                      accounts;
''Non-CREST Shareholders''            Shareholders whose Shares are on the UK
                                      Register and are held in certificated
                                      form;
''Official List''                     the Official List of the FSA;
''pound sterling'' or ''£'' or        the lawful currency of the United
''pence'' or "p"                      Kingdom;
''Process Division''                  the division of the Company responsible
                                      for isolating and refining individual
                                      PGMs for sale into the market place;
''Prospectus''                        the document setting out the details of
                                      the Rights Issue, which document is a
                                      prospectus for purposes of FSMA but is a
                                      circular as defined in the JSE Listings
                                      Requirements (and is not a prospectus
                                      within the meaning of the South African
                                      Companies Act);
"Prospectus Rules"                    the prospectus rules made by the FSA
                                      under Part VI of FSMA;
''Provisional Allotment Letters''     the renounceable provisional allotment
                                      letters relating to the Rights Issue,
                                      expected to be dispatched to Qualifying
                                      Non-CREST Shareholders (other than,
                                      subject to certain exceptions,
                                      Qualifying Non-CREST Shareholders with
                                      registered addresses in the United
                                      States or any of the Excluded
                                      Territories);
''Qualifying CREST Shareholder''      Shareholders whose Shares are on the UK
                                      Register as at the UK Record Date and
                                      which are in uncertificated form and
                                      held through CREST;
''Qualifying Non-CREST Shareholder''  Shareholders whose Shares are on the UK
                                      Register as at the UK Record Date and
                                      which are in certificated form;
''Qualifying Shareholder''            A Qualifying Non-CREST Shareholder,
                                      Qualifying CREST Shareholder and/or
                                      Qualifying South African Shareholder, as
                                      the case may be (which, for the
                                      avoidance of doubt, does not include ADR
                                      holders);
''Qualifying South African            Shareholders on the SA Register as at
Shareholders''                        the SA Record Date;
''Rand'' or ''ZAR'' or ''R'' or       the lawful currency of the Republic of
''Rand and cents''                    South Africa;
or ''Rand and cents''
''Rand Facilities''                   the Company's three bilateral bank debt
                                      facilities of R660 million each made
                                      available pursuant to the Rand
                                      Facilities Agreements;
''Rand Facilities Agreement''         the existing agreements in relation to
                                      the Rand Facilities;
''Rand Merchant Bank''                Rand Merchant Bank, a division of
                                      FirstRand Bank Limited, a company
                                      incorporated in accordance with the laws
                                      of South Africa;
''Record Date''                       the UK Record Date and/or the SA Record
                                      Date, as the context so requires;
"Resolution"                          the resolution to be proposed at the
                                      General Meeting;
''Rights Issue''                      the 9 for 5 rights issue announced by
                                      the Company on 9 November 2012;
''SA Issue Price''                    the price at which Shares will be issued
                                      to Qualifying South African Shareholders
                                      pursuant to the Rights Issue, being
                                      ZAR19.4872;
''SA Record Date''                    close of business on 26 November 2012;
''SA Register''                       the branch of the register of members of
                                      the Company maintained in South Africa;
''SA Registrar''                      Link Market Services South Africa
                                      (Proprietary) Limited of 16th Floor, 11
                                      Diagonal Street, Johannesburg, South
                                      Africa;
''SA Sponsor''                        J.P. Morgan Equities Limited;
''Securities Services Act''           the Securities Services Act 36 of 2004;
''SENS''                              the Securities Exchange News Service of
                                      the JSE;
''Shareholders''                      the holders of any Shares from time to
                                      time and ''Shareholder'' means any one
                                      of them;
''Shares''                            the ordinary shares of US$1 each in the
                                      capital of the Company (which, for the
                                      avoidance of doubt, do not include
                                      ADRs);
''South Africa''                      the Republic of South Africa;
''South African Admission''           admission of the Letters of Allocation
                                      and the New Shares to trading on the
                                      JSE's Main Board;
''South African Companies Act''       the South African Companies Act No. 71
                                      of 2008;
''South African Registrar of          the Registrar of Companies in South
Companies''                           Africa;
"Standard Bank"                       Standard Bank plc;
''Standard Chartered'                 Standard Chartered Securities (Hong
                                      Kong) Limited;
''Strate''                            Strate Limited, a central securities
                                      depository licensed in terms of the
                                      Securities Services Act, and the
                                      electronic clearing and settlement
                                      system used by the JSE Ltd to settle
                                      trades;
''UK Issue Price''                    the price at which Shares will be issued
                                      to Qualifying Shareholders (other than
                                      Qualifying South African Shareholders)
                                      pursuant to the Rights Issue, being
                                      140pence;
''UK Listing Authority'' or ''UKLA''  the UK Listing Authority, being the FSA
                                      acting as the competent authority for
                                      the purposes of Part VI of the FSMA;
''UK Record Date''                    close of business on 15 November 2012;
''UK Register''                       the register of members of the Company
                                      maintained in the United Kingdom;
''UK Registrar''                      Equiniti Limited of Aspect House,
                                      Spencer Road, Lancing, BN99 6DA;
''UK Sponsor''                        Greenhill;
''uncertificated form''               in respect of a Qualifying Shareholder
                                      other than a Qualifying South African
                                      Shareholder, describes the form of a
                                      share held by such person in CREST; and
                                      in respect of a Qualifying South African
                                      Shareholder describes the form of a
                                      share held by such person trading on the
                                      JSE not evidenced by a certificate or
                                      written instrument, incorporated into
                                      Strate and entered and recorded in the
                                      Company's sub-register in electronic
                                      form in terms of the Securities Services
                                      Act;
''Underwriters''                      Citi, HSBC, J.P. Morgan Cazenove,
                                      Standard Bank, BNP Paribas, Investec,
                                      Rand Merchant Bank and Standard
                                      Chartered;
''Underwriting Agreement''            the underwriting agreement dated 9
                                      November 2012 entered into between the
                                      Company and the Underwriters, among
                                      others, relating to the Rights Issue;
''United Kingdom'' or ''UK''          the United Kingdom of Great Britain and
                                      Northern Ireland;
''United States'' or ''US''           the United States of America, its
                                      territories and possessions, any state
                                      of the United States of America, the
                                      District of Columbia;
"US Dollar(s)" or ''US dollar(s)'' or the lawful currency of the United
''US$'' or "$"                        States;
"US Dollar Facilities"      US Dollar Term Loan and US Dollar
                                      Revolving Credit Facility;
"US Dollar Facilities                 the existing agreement in relation to
Agreement"             the US Dollar Facilities;
"US Dollar Facilities Amendment       the amendment agreement in relation to
Agreement"                    the US Dollar Facilities Agreement;
"US Dollar Revolving Credit           the US$400 million revolving credit
Facility"                            facility made available pursuant to the
                                      US Dollar Facilities Agreement;
"US Dollar Term Loan"           the US$300 million term loan facility
                                      made available pursuant to the US Dollar
                                      Facilities Agreement;
''US Shareholders''                   Shareholders with registered addresses
                                      in the United States; and
''WPL''                               Western Platinum Limited, a subsidiary
                                      of the Group in which Lonmin has an 82
                                      per cent. Interest.
All references to legislation in this announcement are to the legislation of
England and Wales unless the contrary is indicated. Any reference to any
provision of any legislation shall include any amendment, modification,
re-enactment or extension thereof.

In this announcement, unless the context otherwise requires, words importing
the singular shall include the plural and vice versa and words denoting any
gender shall include all genders.
GLOSSARY
''average PGM basket price''          the weighted average price achieved by
                                      the Group for PGMs in a given period;
''care and maintenance''              the state of a mine or other facility
                                      that is not in current use, although it
                                      is maintained in good condition to
                                      enable it to be brought back into
                                      service;
''concentrate''                       material that has been processed to
                                      increase the content of contained
                                      material or mineral relative to the
                                      contained waste;
''cost curve''                        a graphic representation in which the
                                      total production volume of a given
                                      commodity across the relevant industry
                                      is arranged on the basis of average unit
                                      costs of production from lowest to
                                      highest to permit comparisons of the
                                      relevant cost positions of particular
                                      production sites, individual producer
                                      groups or producers across the world or
                                      in any given country or region;
''grade''                             the quality of an ore, alloy or metal,
                                      expressed as a percentage of the primary
                                      element or as a ratio of grammes per
                                      tonne;
''matte''                             the homogonous metallic sulphide
                                      produced by the process of matte
                                      smelting, formed by a combination of
                                      metallic sulphides which comprise the
                                      metallic charge in the smelting process;
''ore''                               a mineral or mineral aggregate
                                      containing precious or useful minerals
                                      in such quantities, grade and chemical
                                      combination to make extraction
                                      commercially viable;
''ore reserve development''           the process of developing a known
                                      reserve in order to facilitate the
                                      stoping of PGMs;
''ounce''                             a troy ounce, being approximately
                                      31.1034 grams or 1.09714 imperial
                                      ounces;
''PGM''                               Platinum Group Metals, being platinum,
                                      palladium, rhodium, ruthenium, iridium
                                      and, in respect of Lonmin, gold but not
                                      osmium;
''reef''                              a layer, vein or lode containing
                                      potentially economic mineralisation;
''slag''                              the waste material left after metal has
                                      been smelted;
"stoping"                             the main method of ore extraction used
                                      once the ore block has been developed
                                      and prepared for production. Ore faces
                                      are drilled and blasted using explosives
                                      and the ore is moved from the stope face
                                      to the shaft hoisting system using
                                      conventional or mechanised rock
                                      transportation systems;
''smelter''                           a plant in which concentrates are
                                      processed into an upgraded product by
                                      melting the concentrate to separate
                                      matte from slag;
''tailings''                          the waste residue from the concentrating
                                      process, containing finely ground rock
                                      and minor quantities of mineralisation
                                      which is generally subeconomic to
                                      recover using current technologies
                                      and/or under current market conditions.



                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


IOEMMMGMFLVGZZG -0- Nov/09/2012 07:00 GMT