Announcements 2012

Trading update, commencement of a domestic medium term note programme and proposed restructuring of Northam’s black economic empowerment shareholding

Northam shareholders are advised that the Company’s earnings per share and headline earnings per share for the year ended 30 June 2012 (“FY2012”) are both estimated to be between 70 and 85 cents.


Trading update

Northam shareholders (“Shareholders”) are advised that the Company’s earnings per share and headline earnings per share for the year ended 30 June 2012 (“FY2012”) are both estimated to be between 70 and 85 cents. This compares with earnings per share of 96.2 cents and headline earnings per share of 89.5 cents reported for the year ended 30 June 2011 (“FY2011”).

The anticipated lower earnings stems primarily from flat sales volumes (year on year) as a consequence of the smelter shut down in the fourth quarter of the financial year, as referred to in the Company’s announcements dated 11 May 2012 and 15 May 2012, respectively . This restricted the volume of material available for sale despite materially higher mine production compared to the previous year.

The weighted average number of shares in issue for FY2012 was 382 426 483, compared with 363 087 830 for FY2011.

The preliminary results for FY2012 are expected to be released on or about 24 August 2012.

The information provided above has not been reviewed or reported on by the Company’s auditors.

Domestic medium term note programme

Northam’s board of directors (“Board”) has resolved to initiate a R2 billion domestic medium term note programme (“DMTN Programme”), the purpose of which will be to raise additional third party debt funding to partially fund the approximately R4 billion total capital expenditure programme pertaining to Northam’s ongoing Booysendal mine development (“Booysendal Development”) and general working capital expenditure of the Company. Northam has to date funded approximately R2.5 billion (as at 30 June 2012) of the Booysendal Development with internally generated cash.

The Company expects to announce the outcome of its DMTN Programme’s first placement during August 2012.

Restructuring of broad based black economic empowerment (“BEE”) shareholding

Shareholders are advised that, as a result of the recent significant decreases in the share prices of Platinum Group Metals producers, including Northam (“Share Price Decline”) certain of Northam’s BEE Shareholders have been required to dispose of a significant portion of their Northam shareholdings in order to address current breaches of covenants contained in the BEE financing agreements entered into by these BEE Shareholders (“BEE Financing Agreements”).

In terms of the BEE Financing Agreements, two of Northam’s BEE Shareholders, namely Afripalm Resources (Proprietary) Limited (“Afripalm”) and Mvelaphanda Holdings (Proprietary) Limited (“Mvela Holdings”) pledged the Northam shares held by them as security (“Affected Shares”) for the funds provided to them (collectively referring to Afripalm and Mvela Holdings as “Affected BEE Shareholders”).

Accordingly, the lenders to the Affected BEE Shareholders have exercised their claims over the Affected Shares and are likely to dispose of a sufficient number of such Affected Shares so as to restore compliance by the Affected BEE Shareholders with the terms of the BEE Financing Agreements.

The resultant potential reduction in Northam’s BEE status is still uncertain but could be in the order of 10 percentage points, thereby reducing the total BEE shareholding in Northam from 26% to approximately 16% (“Potential BEE Decrease”).

In anticipation of the Potential BEE Decrease and in order to pro-actively seek solutions to address this, Northam has consulted with the Department of Mineral Resources (“DMR”). The DMR requires Northam to urgently restore its BEE shareholding to a minimum of 26% (“BEE Target”).

Proposed bee transactions to achieve the bee target

In conformity with Northam’s commitment to transformation, the Board has resolved that Northam should develop and implement an additional BEE transaction (“BEE Transaction”) to achieve and sustain the BEE Target and has furthermore established certain key principles around which the BEE Transaction should be structured and implemented. These are:

With the above principles in mind, and subject to approval by the DMR, Northam proposes to proceed with the creation of one or more BEE trusts (“BEE Trusts”), the beneficiaries of which are expected to include Northam’s existing BEE shareholders, a broad based women’s group and other BEE entities.

Following the establishment of the BEE Trusts, Northam proposes to create a new class of ordinary shares (““A” Shares”). These “A” Shares will rank pari passu with Northam’s current ordinary shares in issue with respect to voting rights but will be subject to dividend restrictions, as more fully set out below. A sufficient number of “A” Shares would then be issued to the BEE Trusts, at a value to be determined by the Board and to be approved by Northam’s Shareholders, so as to achieve the BEE Target.

It is further proposed that the issue of the “A” Shares to the BEE Trusts will be funded by way of a notional funding structure which will not require the BEE Trusts to encumber the “A” Shares with third party finance and furthermore will have no significant short to medium term cash flow implications for Northam.

In terms of the proposed notional funding structure, it is envisaged that the amount notionally owing by the BEE Trusts to Northam, created through the issuing of the “A” Shares, (“Notional Outstanding Amount”) will be escalated annually at a rate to be determined by the Board and approved by Shareholders.

The Notional Outstanding Amount will be reduced on the basis of a notional allocation of free cash flows generated by Northam (“Notional Repayment”). The Notional Repayment will not have a cash flow implication for Northam or its existing Shareholders.

Once the Notional Outstanding Amount has been reduced to zero, the “A” Shares will rank pari passu with Northam’s ordinary shares in all respects, including with respect to future dividends. Accordingly, until such time as the Notional Outstanding Amount is reduced to zero, the economic interest attributable to Northam’s existing issued shares will not be diluted.

Shareholder approval and circular

The BEE Transaction will require the approval of Shareholders in general meeting. A circular, including a notice convening a general meeting for this purpose and setting out full details of the BEE Transaction will be sent to Shareholders in due course.

Shareholders are further advised that the BEE Transaction is still in its initial stages and a further announcement will be made by the Company when the terms and conditions of the BEE Transaction have been finalised.

Johannesburg
3 August 2012

Corporate Advisor and Sponsor
One Capital

  • The BEE Transaction should ensure compliance by Northam and the relevant participants with the provisions and principles of the Mining Charter and the requirements of the Mineral and Petroleum Resources Development Act.
  • The BEE Transaction should be sustainable and be beneficial for all stakeholders, including Northam and its existing Shareholders.
  • The BEE Transaction should ensure that Northam’s BEE shareholding percentage is secured at the BEE Target for an extended period so as to ensure that Northam’s BEE status is not threatened in the future.
  • The cost of the BEE Transaction to existing Shareholders should be minimised.
  • Participation in the BEE Transaction should be broad-based to ensure that historically marginalised communities and individuals also benefit.

Announcement

Northam shareholders are advised that an unauthorised land occupation on the farm Schaapkraal 42JT to the east of the Booysendal mine has resulted in delays to the installation of a permanent power supply to the Booysendal mine.


Northam shareholders are advised that an unauthorised land occupation on the farm Schaapkraal 42JT to the east of the Booysendal mine has resulted in delays to the installation of a permanent power supply to the Booysendal mine.

Eskom’s sub-contractors are being prevented from completing the installation of a power line on an Eskom servitude from the national Eskom grid to the Booysendal mine

The company and Eskom are taking steps to protect their rights and to minimise further delays.

Johannesburg
19 July 2012

Sponsor
One Capital

Notice of acquisitions of beneficial interests in Northam Securities

In accordance with Section 122(3)(b) of the Companies Act, No 71 of 2008, as amended and paragraph 3.83(b) of the JSE Limited Listings Requirements, Northam shareholders are advised of the following:


In accordance with Section 122(3)(b) of the Companies Act, No 71 of 2008, as amended and paragraph 3.83(b) of the JSE Limited Listings Requirements, Northam shareholders are advised of the following:

  • the company has received notification that the Capital Group Companies, Inc. (on behalf of clients) (“CGC”) has acquired a beneficial interest in securities of the company (“the CGC Acquisition”). Following the CGC Acquisition, CGC now holds 5.18% of the issued ordinary share capital of the company.
  • the company has received notification that Coronation Asset Management (Proprietary) Limited (on behalf of clients) (“Coronation”) has acquired a beneficial interest in securities of the company (“the Coronation Acquisition”). Following the Coronation Acquisition, Coronation now holds 15.32% of the issued ordinary share capital of the company.

Johannesburg
3 July 2012

Sponsor
One Capital

Zondereinde operational update

The management of Northam advises that mining operations resumed on the night shift of Friday 25 May 2012 at the No 1 shaft of the company’s Zondereinde division.


Section 54

The management of Northam advises that mining operations resumed on the night shift of Friday, 25 May 2012 at the No 1 shaft of the company?s Zondereinde division following the upliftment of the section 54 instruction. As per the company?s previous advice to shareholders, the affected shaft was closed on Tuesday, 22 May 2012.

Smelter

Further to the announcements published on SENS on 11 May 2012 and 15 May 2012, the company advises that a toll smelting and refining agreement has been finalised with a third party. The toll agreement will have no effect on the company’s revenue or costs in the current financial year.

The previous guidance in the announcement dated 15 May 2012 indicating an anticipated R300 million drop in revenue in the financial year ending 30 June 2012 remains valid.

Johannesburg
28 May 2012

Sponsor
One Capital

Fatal accident at Zondereinde Mine

The management of Northam regrets to advise the death of an employee in a fall of ground at the company's Zondereinde mine in Limpopo province on Tuesday, 22 May 2012 at approximately 01H00.


The management of Northam regrets to advise the death of an employee in a fall of ground at the company’s Zondereinde mine in Limpopo province on Tuesday, 22 May 2012 at approximately 01H00. The name of the deceased has been withheld until his next of kin have been informed.

No other employees sustained any injuries in the incident which occurred some 2 000 metres underground.

Work at the affected shaft has been suspended following a Section 54 order by the Department of Mineral Resources.

Johannesburg
23 May 2012

Sponsor
One Capital

Update on smelter operations

Following an assessment of the associated damage to the smelter, Northam management has advised that it is implementing plans to rebuild the smelter as soon as is practicably possible.


Further to the announcement issued by Northam on Friday, 11 May 2012 advising of a smelter run-out at its Zondereinde mine, and following an assessment of the associated damage to the smelter, Northam management has advised that it is implementing plans to rebuild the smelter as soon as is practicably possible.

The rebuild, originally scheduled for the next financial year, could take up to four months to complete. Northam is currently in discussions to secure alternative smelting services in order to contain the impact on the company.

Commensurate with the lower sales volumes, revenues for the financial year ending 30 June 2012 are likely to be some R300 million lower than anticipated owing to the interruption to metals processing in the last two months of the year. These revenues should be realised in the next financial year when the metal will be sold.

Mining and concentrating activities are continuing at the Zondereinde mine.

Johannesburg
15 May 2012

Sponsor
One Capital

Northam advises interruption to smelting activities

The management of Northam Platinum Limited advises that smelting operations at the Zondereinde mine in Limpopo province were suspended yesterday, Thursday 10 May 2012.


The management of Northam advises that smelting operations at the Zondereinde mine in Limpopo province were suspended yesterday, Thursday 10 May 2012. This follows a run-out, which occurred subsequent to a rebuild of the furnace end-wall in April.

Management is currently assessing the extent of the damage to the smelter, the impact on refined metal production and sales, and alternative processing options, should this be required.

Mining and concentrating activities are unaffected.

Shareholders will be kept informed of developments and the potential effects on the company.

Issued by:
Russell & Associates
Johannesburg

Tel +27 11 880 3924

Withdrawal of alternate director

Shareholders of Northam are advised that Mr P L (Lazarus) Zim, chairman of the board, has withdrawn Mr A K Gupta as his alternate director, effective 5 April 2012.


Shareholders of Northam are advised that Mr P L (Lazarus) Zim, chairman of the board, has withdrawn Mr A K Gupta as his alternate director, effective 5 April 2012.

Johannesburg
5 April 2012

Sponsor
One Capital

Change to the board of directors

In compliance with paragraph 3.59(b) of the JSE Limited Listings Requirements, shareholders of Northam are advised that Mr BR van Rooyen has retired from the board of the company with effect from 12 March 2012.


In compliance with paragraph 3.59(b) of the JSE Limited Listings Requirements (“Listings Requirements”), shareholders of Northam are advised that Mr BR van Rooyen has retired from the board of the company with effect from 12 March 2012.

Mr van Rooyen has served on the company’s board since 1999, initially in a non-executive capacity, prior to being appointed an executive director in June 2011 to finalise the integration of Mvelaphanda Resources Limited’s remaining assets into Northam. Mr van Rooyen will continue to provide consultancy services to the company.

Johannesburg
13 March 2012

Sponsor
One Capital

Northam Platinum reports improved performance

Northam Platinum has issued its half-year results for the period ended 31 December 2011 today, Friday 24 February 2012.


Northam Platinum has issued its half-year results for the period ended 31 December 2011 today, Friday 24 February 2012.

Key developments in the period:

  • Improved production at Zondereinde
  • Two-year wage deal signed
  • Ongoing solid progress at Booysendal
  • Financing secured
  • Revenues reach R2 billion
  • Earnings 161% higher at R198.2 million.

Northam’s improved results for the half-year emerged largely on the back of Zondereinde’s performance. Metals in concentrate produced at the company’s western limb operation were 27% higher at 4 592kg (147 636oz). The higher rand basket price, averaging R341 725/kg (F2011 H1: R308 886/kg) over the period, helped to boost sales revenues to almost R2 billion.

In tandem with the higher volumes, and also reflecting the increases in mining input costs, total operating costs were higher by 24.2%. Inversely, however, unit operating costs declined by 3.3% year on year. As anticipated, the higher volumes also translated into higher refining costs, which were further impacted by the weakening of the rand against the euro by 11.6%.

Headline earnings rose by 161.6% to R198.3 million. The board declared a dividend of 5 cents per share, indicating the requirement to conserve cash to finance the group’s growth ambitions.

The increased momentum in the construction and development activities at the Booysendal mine led to the higher cash flows utilised in investing activities, which rose to R899.3 million in the period. The group’s cash position remains healthy, largely unchanged year-on-year at R972.1 million.

Zondereinde – an improved performance

Total tonnes milled at Zondereinde increased by 44.0% to 998 598 tonnes. The head grade was lower at 5.0g/t, reflecting the higher ratio of UG2 reef volumes mined. Metals in concentrate produced increased by 26.5% to 4 592kg (147 636oz), while metal sales rose to 5 295kg (170 238oz). Northam chief executive Glyn Lewis told the investment community today that mining conditions on the Merensky reef continue to be challenging. “However,” he added, “steady progress is being made in improving mining flexibility on the western side of the mine. In addition, the deepening project, with the aim of reaching more conformable Merenksy reef, is ongoing. Volumes from this area should pick up towards the end of H1 F2013.”

Booysendal – solid progress

Steady progress continues at the group’s new Booysendal mine on the eastern limb of the Bushveld Complex.

“Reef exposure has confirmed our expectations of structure and grade,” says Lewis, “while bulk surface earthworks are now largely complete and the focus is now on mechanical and electrical construction of plant infrastructure and the erection of mine buildings.”

A total of R785.2 million has been spent in the current period for the development of this mine. The estimated capital expenditure for F2012 is expected to be R1.8 billion. During the year Northam concluded an agreement to raise a R1.0 billion revolving credit facility, in line with the group’s previously stated funding strategy.

Outlook

Lewis pointed to the challenges at Zondereinde, indicating that the pace of the recovery will be largely determined by geological and mining conditions. Production in the second half of the year is likely to be slightly lower than that of H1 owing to more public holidays in the period, while costs are anticipated to be reasonably contained. In the absence of any untoward disruptions to production, and if the rand basket price were to remain at current levels (R335 000/kg) (F2011: R323 899/kg), earnings for the year are anticipated to increase.

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