Announcements 2008

Northam Platinum reports strong set of results in tough operating conditions

 


Establishes firm strategic foothold in the eastern Bushveld Complex

Johannesburg, 25 August 2008: Northam Platinum Limited (Northam, JSE: NHM) released results for the year ended 30 June 2008 today, Monday 25 August 2008. Highlights include:

  • The diversification of the company’s asset base with the consummation of the Booysendal transaction, thereby transforming the company’s prospects to grow into a significant, long-life PGM producer;
  • Securing the company’s BEE credentials at the equity level and establishing a strategic foothold in the eastern limb of the Bushveld Complex;
  • Signing a concentrate offtake agreement with Platmin’s Pilanesberg Platinum Mines;
  • Sales revenues climb to record R3.89 billion;
  • Northam mine continues to generate strong cash flows at R1.55 billion;
  • 12.6% increase in after-tax profits to R1.50 billion;
  • Healthy operating margin at 58.9%;
  • Headline earnings reach 627 cps;
  • Final dividend of 185 cps declared (330 cps for the year);
  • Strong, ungeared balance sheet remains intact.

The Northam mine continued to generate strong levels of cash, at R1.50 billion in the year under review, underpinned by the growth in revenue from metal sales, 3.9% higher year on year at R3.89 billion. Exceptionally strong metal prices, particularly in H2, helped to offset the effect of lower production of metals in concentrate at 9,113 kg (292,989 oz). The 9.7% drop in output was attributable largely to the effects of safety-related stoppages, operational difficulties arising from intermittent power supply and industrial action, which was a feature of the mining industry in South Africa in the reporting period. These impacts were exacerbated at the Northam mine by the ongoing difficulties associated with mining the Merensky pothole facies. Year on year, tonnages mined from the Merensky reef horizon were 17.8% lower at 205,251 tonnes.

“However,” said Northam chief executive Glyn Lewis, “with the continued management focus on improvements to our metallurgical operations, we were able to grow the proportion of UG2 ore treated, which contributed to the 3.8% increase in tonnages from this reef to 963,033 tonnes (F2007: 928,149). Taking into account the production shifts lost, this was a creditable performance and helped to stem the decline in total tonnages milled to 10.9%.”

The lower volumes, along with inflationary cost pressure, had a negative impact on unit cash costs, which at R175,197/kg were 29.5% higher year on year. However the increase in total operating costs was contained to 19.5%. Looking to F2009, Lewis commented, that in the absence of external factors affecting operations, production levels in the next year were likely to increase, which would lead to some improvement in the relative cost performance.

Booysendal platinum project

With the consummation of the Booysendal transaction, work continues apace on the Booysendal project. The prefeasibility study review, which included a geological review, an investigation of mining methods and project elements such as metallurgy, engineering, infrastructure and the associated environmental issues, has been concluded.

Lewis added that the intensive and extensive work of the prefeasibility review had now laid the foundation for the bankable feasibility study. “We are pleased with the progress made by our enormously experienced project team and are very encouraged by the outcomes of the prefeasibility review. A range of production scenarios, 11 in all, ranging in scale from 120,000 to 480,000 tonnes per month have been considered. Although these are initial findings, results suggest a modular production build-up offering flexibility and ameliorating potential risks relating to issues such as power supply and water.”

PGM markets

The year under review was characterized by another period of buoyant market conditions and robust demand for Northam’s basket of metals. This was particularly apparent in the H2 period, when the average basket price rose to levels in excess of R500,000/kg.

Commenting on the recent slump in metal prices, Lewis acknowledged that this had been prompted by negative sentiment from the world’s major vehicle manufacturers and significant speculative disinvestment. “Nevertheless,” he added, “the current basket price still compares favourably with the average basket price of R304,000/kg in the first half of the year.

“With the softer platinum price, there are already some signs of a modest increase in demand from jewellery manufacturers. For the automobile sector, which we believe will continue to be the principal driver of PGM prices, emissions legislation continues to tighten. We believe that these factors, combined with the prospect of higher vehicle sales in the BRIC countries will continue to support demand, and we are confident that the outlook for fundamental demand for PGMs remains sound.”

Prospects

After an eventful year in the life of the company, Northam continues to build on its track record of consistent delivery to shareholders, generating strong levels of cash, standing the company in good stead as it develops a new project. With the Booysendal transaction concluded Northam has now established a firm strategic foothold in the eastern limb of the Bushveld Complex, and has acquired a world-class PGM prospect which brings a near-term expansion opportunity and asset diversification. This new project, together with Northam’s associated metals processing infrastructure and downstream beneficiation opportunities, offers the possibility to provide processing alternatives also for emerging producers in the sector.

Acknowledgement

In acknowledging the role of Anglo Platinum in the company’s fortunes, Lewis concluded, “The finalisation of the Booysendal transaction has brought with it the exit of Anglo Platinum as a long-standing, supportive shareholder and partner in our business. In particular too I must pay tribute to Norman Mbazima, who has recently resigned from the Northam board, and who played an important part in the conclusion of this company-transforming deal.”

Distributed by
Russell & Associates
Johannesburg
Tel +27 11 880 3924

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Resignation of director


Northam advises that Mr Norman Mbazima, a non-executive director, has resigned from the board of directors of the company with effect from 20 August 2008.

Johannesburg
21 August 2008

Sponsor:
Barnard Jacobs Mellet Corporate Finance (Pty) Limited

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Notice of trading of new Northam and Mvela Resources ordinary shares and Booysendal Transaction update

 


Further to the joint announcement on 8 July 2008 regarding an update on Booysendal Transaction ("the Transaction"), shareholders of Mvela Resources and Northam are advised that implementation of the Transaction has commenced as follows:

  • Mvela Resources will take delivery of 53.1 million Northam shares from Anglo Platinum Limited on 20 August 2008;
  • 121 million new Northam ordinary shares will be allotted and issued to Mvelaphanda Equity (Proprietary) Limited, a wholly-owned subsidiary of Mvela Resources. Application for the listing of these shares has been made to the JSE Limited(“JSE”) and the listing is expected to commence on 20 August 2008;
  • 3.58 million new Mvela Resources ordinary shares have been allotted and issued to a subsidiary of Afripalm Resources(Proprietary) Limited and were listed on the JSE Limited on 15 August 2008;
  • The first 50% of the Booysendal Platinum Project (“Booysendal”), will be transferred to Northam on 20 August 2008 and the remaining 50% will be pledged and held in escrow by Northam pending conversion of the Old Order Mining Title.

Application for the conversion of the Old Order Mining Title covering nine of the eleven Booysendal farms, and for the grant of Mining Title over the remaining two farms presently held under New Order Prospecting Rights, has been lodged with the Department of Minerals and Energy and is currently being processed.

On the grant of the New Order Mining Rights, the implementation will be complete. Shareholders of Mvela Resources and Northam will be advised in due course.

Johannesburg
19 August 2008

Sponsor to Mvela Resources
J.P. Morgan Equities

Sponsor to Northam
Barnard Jacobs Mellet Corporate Finance (Pty) Limited

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Fatality at Northam Platinum

The management of Northam regrets to advise the death of an employee, Mr TJ Masilo.


Johannesburg, 11 August 2008. The management of Northam Platinum Limited (Northam) regrets to advise the death of an employee, Mr TJ Masilo. Mr Masilo passed away in hospital on Sunday 10 August 2008, following injuries sustained in an accident at the Northam mine on Thursday 7 August 2008.

The accident occurred some 2000 metres below surface in a footwall drive development end when a mechanical prop dislodged (became loose) and struck Mr Masilo.

No one else was injured in the incident.

The affected area has been closed by management and the cause of the accident is being investigated in co-operation with the Department of Minerals and Energy (DME) and organized labour.

The Northam board and management express their sincere condolences to Mr Masilo’s family and friends.

Issued by:

Russell & Associates
Marion Brower
Tel: +27 11 880 3924
Cell: 082 895 0698

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Advisory notice to shareholders

Northam advises that it intends to release its financial results for the year ended 30 June 2008 on Monday 25 August 2008.


Northam advises that it intends to release its financial results for the year ended 30 June 2008 on Monday 25 August 2008. Further details on timing and a presentation venue will be available on this site shortly.

Johannesburg
29 July 2008

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Trading update

Shareholders are advised that the company’s earnings per share and headline earnings per share for the year ended 30 June 2008 are expected to be between 620 and 660 cents.


Shareholders are advised that the company’s earnings per share and headline earnings per share for the year ended 30 June 2008 are expected to be between 620 and 660 cents. This compares with the 560 cents per share reported for the previous comparable period ended 30 June 2007.

The expected increase in earnings results from a substantial rise in the average Rand receipts for the company’s basket of metals relative to the previous comparable period, thereby offsetting the effects of anticipated production shortfalls.

The forecast earnings have not been reviewed by the company’s auditors.

It is anticipated that the preliminary results for the year ended 30 June 2008 will be released on or about 7 August 2008.

Issued by

Russell & Associates
Tel: +27 11 880 3924
Marion Brower
Mobile: +27 82 895 0698

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Booysendal Transaction update

Further to the joint announcement on 6 June 2008 regarding the Booysendal Transaction , shareholders of Mvela Resources and Northam are advised that all contractual elements of the Transaction have been concluded.


Further to the joint announcement on 6 June 2008 regarding the Booysendal Transaction ("the Transaction"), shareholders of Mvela Resources and Northam are advised that all contractual elements of the Transaction have been concluded. There remains one regulatory Condition Precedent outstanding, that being the consent for the transfer of control of the New Order prospecting rights under the Minerals and Petroleum Resources Development Act. Shareholders will be advised in due course when this is received and the transaction is implemented.

Johannesburg
8 July 2008

Sponsor to Mvela Resources
J.P. Morgan Equities

Sponsor to Northam
Barnard Jacobs Mellet
Corporate Finance (Pty) Limited

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Results of general meetings

Further to the circular to Mvela Resources shareholders dated 9 May 2008 regarding the proposed acquisition by Mvela Resources of Anglo Platinum Limited's interest in the Booysendal Platinum Project.


Further to the circular to Mvela Resources shareholders dated 9 May 2008 regarding:

  • the proposed acquisition by Mvela Resources of Anglo Platinum Limited’s (“Anglo Platinum’s”) interest in the Booysendal Platinum Project (“Booysendal”) and Anglo Platinum’s 22.2% interest in Northam for a total cash consideration of R4 billion;
  • the proposed subsequent sale by Mvela Resources to Northam of its 100% interest in Booysendal; and
  • a specific issue of new ordinary shares by Mvela Resources to a subsidiary of Afripalm Resources (Proprietary) Limited;

and the circular to Northam shareholders dated 9 May 2008 regarding:

  • the proposed acquisition by Northam from Mvela Resources of Booysendal;
  • the proposed creation of 125 000 000 Northam ordinary shares and proposed issue of 121 000 000 ordinary shares to Mvela Resources in consideration for the acquisition of Booysendal;
  • proposed amendments to Northam’s Memorandum and Articles of Association; and
  • the proposed waiver by the independent Northam shareholders of their right to receive a mandatory offer from Mvela Resources, (collectively “the Transaction”);

the requisite majorities of Mvela Resources and Northam shareholders passed all the ordinary and special resolutions required to implement the Transaction at their respective general meetings held on 6 June 2008.

The special resolutions have been submitted to the Companies and Intellectual Property Registration Office (CIPRO) for registration as required by the Companies Act, 1973, as amended.

The Transaction is expected to become unconditional and to be implemented by the end of June 2008.

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Joint updated Booysendal transaction announcement

Shareholders are advised that the Northam and Mvela Resources circulars relating to the transaction, including the relevant Competent Person’s reports and notices of general meeting required in terms of the JSE Listings Requirements, were posted to shareholders today.

Joint updated Booysendal transaction announcement (PDF - 82KB)


Shareholders are advised that the Northam and Mvela Resources circulars relating to the transaction, including the relevant Competent Person’s reports and notices of general meeting required in terms of the JSE Listings Requirements, were posted to shareholders today.

Joint updated Booysendal transaction announcement (PDF - 82KB)

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Media statement

The management of Northam regrets to advise the death of an employee, Mr JM Lethiba at its Northam mine in Limpopo Province.


The management of Northam Platinum Limited (Northam) regrets to advise the death of an employee, Mr JM Lethiba at its Northam mine in Limpopo Province.

Mr Lethiba failed to report on surface after the shift in the afternoon of Thursday 20 March 2008. Thirty two proto (rescue) teams, mine personnel and three SAP search and rescue canine units spent approximately 48 hours searching for Mr Lethiba. His body was discovered in the evening of Saturday 22 March 2008 in an area about six kilometres from where he had worked.

An investigation into the cause of Mr Lethiba’s death will be conducted in co-operation with the Department of Minerals and Energy and organised labour.

Issued by:

Russell & Associates
Johannesburg
Tel: +27 11 880 3924

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