Announcements 2009

Appointment of alternate director

Shareholders of Northam are advised that Mr Atul Kumar Gupta has been appointed as alternate director to the chairman, Mr P L (Lazarus) Zim.


Shareholders of Northam are advised that Mr Atul Kumar Gupta has been appointed as alternate director to the chairman, Mr P L (Lazarus) Zim, effective 27 February 2009.

Mr Gupta is chairman and managing director of Sahara Holdings (Proprietary) Limited and is a member of the Afripalm Resources (Proprietary) Limited board of directors.

Johannesburg
3 March 2009

Sponsor:

Barnard Jacobs Mellet Corporate Finance (Pty) Limited

Northam interim results

Northam Zondereinde mine reports a strong operating performance, Cash positive, healthy operating margin in difficult market conditions


Northam Zondereinde mine reports a strong operating performance

Cash positive, healthy operating margin in difficult market conditions

Northam Platinum Limited (Northam, JSE: NHM) released results for the half year ended 31 December 2008.

Key features:

  • Metal production higher by 10.7% at 5 193 kg (166 952 oz)
  • Sales revenue increases by 7.7% to R1 612 million
  • Cash operating cost increases held to below inflation
  • Smelter refurbishment completed on schedule and within budget
  • Booysendal bankable feasibility study on track
  • Cash positive in tough market environment
  • Operating margin at 37.5%

Financial and operating results

Higher production and sales volumes from Northam’s Zondereinde mine, contributed to a 7.7% increase in sales revenues to R1 612 million for the half year ending 31 December 2008.

The rand basket price received over the period was slightly higher than in the comparable period in F2008, largely owing to the 21% decline in the rand/US dollar exchange rate, thereby partially offsetting the lower US dollar price for Northam’s basket of metals at US$1 197 per ounce.

A sustained focus on cost control has contained unit costs to single-digit increases, below inflation:

  • R/tonne milled - 7.1% higher at R823
  • R/kg produced - 9.8% higher at R184 213

Inflationary increases in the cost of labour, consumables and services, in combination with the 10.7% increase in production resulted in total operating costs of R970 million. Reflected in the cost of sales are those associated with additional smelting and refining, which were R42 million higher over the period owing to once-off costs relating to toll treating charges during the Northam smelter refurbishment, which was completed on schedule and within budget.

Profit attributable to shareholders decreased by 21.5% to R371 million compared with that for the six months ended 31 December 2007. Headline earnings per share were lower at 113.5 cents, also reflecting the increase in share capital associated with the acquisition of Booysendal during the period.

Northam metallurgical operations

The metallurgical upgrade programme continued during the reporting period with the refurbishment of the smelter, which started in October 2008 and which was completed on schedule and within budget at the end of December 2008. The smelter has been successfully recommissioned.

In line with Northam’s stated strategy of leveraging the metallurgical operations at the Zondereinde mine, and providing a competitive alternative to juniors entering the sector, an offtake agreement was concluded during the period with Platmin’s Pilanesberg platinum mine, and a toll-treatment agreement with Braemore Resources was concluded.

Northam CEO Glyn Lewis said today, "In the medium term Northam will benefit from the additional flexibility which we will derive from mining different ratios of reef type; in the longer term this adds an opportunity to increase our sales offering to the market and represents a further step in our stated strategy of growing production to feed into the modular build-up of the Heraeus Refinery SA."

Booysendal platinum project – shallow ounce growth into the future

The Booysendal bankable feasibility study is on track for completion in the first half of F2010, according to plan. The expectation that Booysendal’s development will be modular, with an incremental production build-up, remains unchanged. Optimisation studies on alternative mine designs have been completed, and have confirmed that a mechanized approach remains the preferred and lowest cost option.

Commenting on Booysendal’s development Lewis said, "We are initially focusing on developing a 120 000 tpm production unit which will be replicated as market conditions and the availability of power allow. This approach gives us the flexibility to manage our capital expenditure and production in line with prevailing market conditions."

Lewis added, "At current spot metal prices, Northam remains cash positive at an operating level, has no debt and should be able to develop Booysendal from a combination of internal retentions and medium-term loan finance."

Prospects

Production of metals in concentrate is expected to be marginally lower in the second half of the year, whilst sales of PGMs are expected to be in line with those of the first half. Given the prevailing uncertainty in the global economic climate, and its dampening effect on commodity prices, the rand PGM basket price is likely to remain at current levels in the medium term. This should result in earnings in the second half of the financial year being lower than the first half.

Distributed by:

Russell and Associates
Tel: +27 (0)11 880 3924
Fax: +27 (0)11 7880 3788

Withdrawal of cautionary announcement

  • The unbundling by Mvela Resources of its entire shareholding in Northam to its shareholders;
  • The acquisition by Implats of the entire issued share capital of Northam; and
  • The acquisition by Implats of the entire share capital of Mvela Resources, post the unbundling of Northam


Withdrawal of cautionary announcement regarding the following proposed inter-conditional transactions:

  • The unbundling by Mvela Resources of its entire shareholding in Northam to its shareholders;
  • The acquisition by Implats of the entire issued share capital of Northam; and
  • The acquisition by Implats of the entire share capital of Mvela Resources, post the unbundling of Northam

Shareholders of Mvela Resources, Northam and Implats (“Shareholders”) are referred to the joint announcements by Mvela Resources, Northam and Implats (‘the Parties”) dated 2 October 2008, 19 November 2008 and 7 January 2009 and to the announcements by Mvela Resources and Northam dated 20 October 2008 and 27 October 2008, regarding the proposed acquisition by Implats of the entire issued share capital of Mvela Resources and Northam through a series of inter-conditional transactions (the “Proposed Transaction”).

Shareholders are advised that due to the current global economic climate as well as the ongoing volatility in commodity and equity prices, the Parties have not been able to agree on equitable ratios for the implementation of the Proposed Transaction. Negotiations have therefore been terminated. Although the near-term outlook for the platinum sector remains challenging, the Parties continue to believe in the long-term fundamentals of the industry.

Shareholders of Mvela Resources, Northam and Implats are advised that the cautionary announcement published on 19 November 2008 has been withdrawn and that they are no longer required to exercise caution in their share dealings.

Johannesburg
14 January 2009

Financial advisor to Implats:
Morgan Stanley South Africa (Pty) Ltd

Legal advisor to Implats:
Bell Dewar Inc.

Financial advisors to Mvela Resources:
JPMorgan Chase Bank N.A. (Johannesburg branch) and
N M Rothschild & Sons South Africa (Pty) Ltd

Legal advisor to Mvela Resources:
Bowman Gilfillan

Independent expert advisor to Northam and Mvela Resources:
Barnard Jacobs Mellet Corporate Finance (Pty) Limited

Legal advisor to Northam:
Brink Cohen Le Roux Inc.

Sponsor to Implats:
Deutsche Securities (SA) (Pty) Ltd

Sponsor to Mvela Resources:
JPMorgan Equities Ltd

Sponsor to Northam:
Barnard Jacobs Mellet Corporate Finance (Pty) Ltd

Trading update

Shareholders are advised that the company’s earnings per share and headline earnings per share for the six months ended 31 December 2008 are estimated to be between 100 and 120 cents.


Johannesburg, 14 January 2009. Shareholders are advised that the company’s earnings per share and headline earnings per share for the six months ended 31 December 2008 are estimated to be between 100 and 120 cents. This compares with the 199 cents per share reported for the previous comparable period ended 31 December 2007.

The anticipated decline in earnings stems from the effects of inflation and increased production on operating costs and the increase in the number of shares in issue during the period under review.

The weighted average number of shares in issue as at 31 December 2008 was 326 813 788, compared with 237 529 261 as at 31 December 2007.

The planned rebuild of the smelter was completed on schedule and within budget and the smelter was re-commissioned during December 2008. The remaining metal derived from stockpiled concentrate is being processed during the second half of the 2009 financial year.

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

It is anticipated that the interim results for the six months ended 31 December 2008 will be released on or about 5 February 2009.

Johannesburg
14 January 2009

Sponsor:

Barnard Jacobs Mellet Corporate Finance (Pty) Limited

Fatality at Northam Platinum Limited

The management of Northam regrets to advise the death of an employee at its mine near Thabazimbi in the Limpopo province in a shaft-related accident on the evening of Tuesday, 13 January 2009.


Johannesburg, 14 January 2009. The management of Northam Platinum Limited (Northam) regrets to advise the death of an employee at its mine near Thabazimbi in the Limpopo province in a shaft-related accident on the evening of Tuesday, 13 January 2009.

The name of the deceased is being withheld until his next of kin have been informed.

A joint investigation into the cause of the accident is currently being undertaken by the safety inspectorate of the DME, union representatives and management.

Issued by:

Russell & Associates
Johannesburg
Tel: +27 11 880 3924

Sponsor:

Barnard Jacobs Mellet Corporate Finance (Pty) Limited

Renewal of cautionary announcement

Discussions regarding the proposed acquisition by Implats of the entire issued share capital of Mvela Resources and Northam are continuing. Shareholders will be notified of any further developments in due course.


Renewal of cautionary announcement regarding the following proposed inter-conditional transactions:

  1. The unbundling by Mvela Resources of its entire shareholding in Northam to its shareholders;
  2. The acquisition by Implats of the entire issued share capital of Northam; and
  3. The acquitision by Implats of the entire issued share capital of Mvela Resources, post the unbundling of Northam.

Shareholders of Mvela Resources, Northam and Implats (“Shareholders”) are referred to the joint cautionary announcement by Mvela Resources, Northam and Implats (“the Parties”) dated 19 November 2008 regarding the proposed acquisition by Implats of the entire issued share capital of Mvela Resources and Northam through a series of inter-conditional transactions (“the Proposed Transaction”).

Discussions regarding the Proposed Transaction are continuing. Shareholders will be notified of any further developments in due course and are advised to continue to exercise caution in their share dealings until a further announcement is made.

Johannesburg
7 January 2009

Financial advisor to Implats:
Morgan Stanley South Africa (Pty) Ltd

Legal advisor to Implats:
Bell Dewar Inc.

Financial advisors to Mvela Resources:
JPMorgan Chase Bank N.A. (Johannesburg branch) and
N M Rothschild & Sons South Africa (Pty) Ltd

Legal advisor to Mvela Resources:
Bowman Gilfillan

Independent expert advisor to Northam and Mvela Resources:
Barnard Jacobs Mellet Corporate Finance (Pty) Limited

Legal advisor to Northam:
Brink Cohen Le Roux Inc.

Sponsor to Implats:
Deutsche Securities (SA) (Pty) Ltd

Sponsor to Mvela Resources:
JPMorgan Equities Ltd

Sponsor to Northam:
Barnard Jacobs Mellet Corporate Finance (Pty) Ltd