Announcements 2004

Announcement

Northam appoints independent sub-committee to advise the board on the proposed acquisition of the JV interest in Booysendal.


Further to the joint announcement, dated 12 February 2004, by the company and Mvelaphanda Resources Limited (“Mvela Resources”) regarding the proposed acquisition, by the company from Mvela Resources, of a 50% Joint Venture interest (“the JV interest”) in the Booysendal Platinum Project, the company announces that Messrs A J Wright and K W Maxwell, both of whom have extensive experience in the mining industry, have been appointed, together with Mr M E Beckett, a director of the company, to serve on an independent sub-committee of the board to consider the terms pertaining to the proposed acquisition of the JV interest and to advise the board in this regard.

Mr Alan Wright, previously Chief Executive Officer of Gold Fields of South Africa Limited, is a former Chairman of Northam and is currently the Deputy Chairman of Gold Fields Limited.

Mr Ken Maxwell, who previously held the positions of Managing Director of Rustenburg Platinum Mines Limited, Chairman of the JCI Gold Division and President of the Chamber of Mines of South Africa, is currently a Non-Executive Director (and former Chairman) of Anglovaal Mining Limited.

The JV interest includes 38,4 million attributable resource ounces on the UG2 horizon and 23,8 million attributable resource ounces on the Merensky horizon. The proposed consideration, which is to be settled by a combination of cash, new Northam ordinary shares and Northam deferred ordinary shares, is equivalent to R11,99 (US$1,74 at an exchange rate of R6,90 per US$) per UG2 resource ounce and R7,38 (US$1,07 at an exchange rate of R6,90 per US$) per combined Merensky and UG2 resource ounce.

Sponsor
Barnard Jacobs Mellet Corporate Finance (Pty) Limited

Change to the Board

Mr. AS Malone has resigned as a non-executive director.


Northam advises that Mr. AS Malone has resigned as a non-executive director of the company with effect from 1 March 2004.

Sponsor
Barnard Jacobs Mellet Corporate Finance

Mvela acquires 50% JV interest in Booysendal - Confirms intent to consolidate platinum interests in Northam

Mvela and Northam announced today that agreement has been reached on Northam’s acquisition of Mvela’s Khumama interest in the Booysendal Platinum Project.

SENS announcement: Acquisition by Mvela Resources of a 50% joint venture interest in the Booysendal Platinum Project and consolidation of this interest into Northam (PDF - 80KB)


SENS announcement: Acquisition by Mvela Resources of a 50% joint venture interest in the Booysendal Platinum Project and consolidation of this interest into Northam (PDF - 80KB)

Mvelaphanda Resources Limited (Mvela) and Northam Platinum Limited (Northam) announced today that agreement has been reached on Northam’s acquisition of Mvela’s Khumama interest in the Booysendal Platinum Project.

This follows Mvela having acquired the entire issued share capital of and loan accounts against Khumama Platinum (Proprietary) Limited (“Khumama”) for a total consideration of R313 million, comprising a combination of cash and new Mvela ordinary shares.

The shares issued by Mvela will be subject to a lock-in period of five years, with Mvela having the pre-emptive right to take these up after this period, and a voting pool agreement.

Mvela Director Mark Willcox said today “The purchase of Khumama not only brings access to a world class PGM resource, but also significantly enhances the direct and beneficial broad based empowerment ownership in Mvela.”

With the Khumama transaction Paseka Ncholo, Nomazizi Mtsotshisa and Robinson Ramaite, currently directors of Khumama, will join the Mvela board.

Booysendal is a well explored area on the Eastern Limb of the Bushveld Complex, and is underlain by the Merensky and UG2 reef horizons. Measured, indicated and inferred resources on the UG2 horizon total some 76.8 Moz with 38.4Moz attributable to Khumama. The resource base on the Merensky Reef horizon measures 47.6 Moz, with 23.8 Moz being attributable to Khumama.

The consideration payable by Northam for the JV right (or the Khumama interest) will be a combination of cash, Northam deferred ordinary shares and new Northam ordinary shares. The total consideration is estimated at R460.3 million. This consideration is equivalent to R11.99 (US$1.74 at an exchange rate of R6.90 per US$) per UG2 oz attributable to Khumama and R7.38 (US$1.07 at an exchange rate of R6.90 per US$) per combined ounce on the Merensky and UG2 horizons, attributable to Khumama.

This transaction will significantly enhance Northam’s empowerment status with a BEE equity participation of approximately 34%.

Commenting on the transaction, Mvela director Mark Willcox said today that this was the first phase in Mvela’s stated strategy of consolidating its platinum interests and creating a world class black-owned and operated PGM company. “With Northam’s proven track record and expertise in mining and smelting, its ungeared balance sheet and improved production profile, Northam is an obvious choice to develop the Khumama asset.”

Mvela director Bernard van Rooyen added that Mvela was continuing to explore ways of bringing its other platinum projects, including the Dwaalkop JV with Southern Era into Northam. We will be keeping shareholders informed of progress.”

Northam general manager Glyn Lewis said “Over the past couple of years Northam has proved its operational robustness. With this transaction, Mvela has brought to the party an expansion opportunity which will significantly increase our resource base, and will provide Northam with the opportunity of diversifying its asset base. This will stand us in good stead as we continue to focus on reducing costs.”

Queries:

For Mvela:
Mark Willcox: Tel: +27 82 823 6666
Bernard van Rooyen: Tel: +27 82 659 1421

For Northam:
Derek Wolstenholme: Tel: +27 82 655 3413
Marion Brower: Tel: +27 82 895 0698

Record production results for Northam Platinum while stronger SA currency dents earnings

Northam Platinum Limited reported strong PGM production for the first half of the 2004 financial year, with output of precious metals in concentrate exceeding the 180,000 oz level, 9.4% higher than for the comparable period in F2003.


Northam Platinum Limited reported strong PGM production for the first half of the 2004 financial year, with output of precious metals in concentrate exceeding the 180,000 oz level, 9.4% higher than for the comparable period in F2003.

With the higher output, unit sales of precious metals rose strongly by 32.4% to 208,523 oz. Sales revenues however increased by only 3.2%, reflecting the effects of a sustained stronger Rand, which offset the 8.1% increase in the US dollar basket price to US$549/oz. The net effect was an average basket price realised of R123,121/kg, 22.2% lower than for the six months ended December 2002.

Operating profit fell by 44.6% to R167 million. This, together with sundry expenditure, translated into a drop of 44.9% in headline earnings to R104 million, equivalent to 44.9 cents per share.

The directors have declared a dividend of 45 cents per share for the period ended 31 December 2003.

The mine’s stronger operational performance is also evidenced by the higher tonnages milled in the period, increasing by 7% to 1.2125 million tonnes (Merensky – 0.8541 million; UG2 0.3584 million) and the higher combined headgrade of 5.5 g/t made up of Merensky at 6.1 g/t (Dec 2002: 6,0 g/t), and UG2 at 4.3 g/t (Dec 2002: 4.0 g/t).

The Merensky Reef ore reserve position has remained constant, with availability of 18 months. This unchanged position is the result of reduced extraction ratios flowing from poor ground conditions. The UG2 ore reserve position is at 31 months’ availability, in line with expectations and providing for some mining flexibility.

Costs were well controlled in the period under review, with unit cash costs rising only marginally by 2.5%. This was a very creditable performance taking into account the 11% increase in labour costs since July 2003. As anticipated, the growth in production volumes resulted in total operating costs increasing by 12.1%.

Expansion

Opportunities to acquire growth assets are actively being pursued in conjunction with Mvelaphanda Resources Limited, which has a 22.3% equity interest in Northam. Shareholders will be advised of developments as they occur.

Discussions in respect of Pandora are continuing. It is the understanding of the directors of Northam that the Department of Minerals and Energy has not yet processed the application for a mining licence.

Hedging

In F2003, on account of the company’s sensitivity to metal prices and the exchange rate, Northam embarked on a programme of hedging metals to protect its revenues from any significant decline in metal prices and to ensure the company’s continued sustainability. Whilst the palladium programme has proved successful, a strong, unanticipated rise in the platinum price resulted in an unrealised loss of R22.8 million at 31 December 2003 being recorded. The platinum hedging programme was suspended in October 2003.

With the continued strengthening of the ZAR against the US Dollar during the first six months of the financial year, the hedging programme was extended to include the forward sale of currency for the period ending June 2004. A total of US$66 million was sold forward at an average rate of US$1 = R6.87. Whilst this programme resulted in gains of R8.1 million being realised up to 31 December 2003, the sudden turnaround in the value of the Rand at the end of the period resulted in an unrealised loss of R6.8 million being recorded.

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