Announcements 2013

Innovative fund-raising programme to raise R1 billion

Northam Platinum today announced the details of a funding programme to the value of R1 billion which comprises a R600 million fully subscribed claw back rights offer and a R400 million additional revolving credit facility.


Northam Platinum today announced the details of a funding programme to the value of R1 billion which comprises a R600 million fully subscribed claw back rights offer and a R400 million additional revolving credit facility. In addition, certain covenant restrictions have been lifted on the revolving credit facility.

In terms of the claw back rights offer 15 million new Northam ordinary shares will be offered to shareholders at a price of R40 per share, representing a total subscription consideration of R600 million. The claw back offer has been fully subscribed by Coronation Asset Management (Proprietary) Limited. Further details of the claw back offer, the revolving credit facility and covenant holiday are available in an unabridged SENS announcement on the company’s website. (PDF - 62KB)

A challenging economic and operational environment has beset the South African mining industry for an extended period of time, with depressed platinum group metal basket prices, volatile exchange rates, rising costs and a complex industrial relations environment being at the forefront of the industry’s challenges. In addition to these, Northam has had to deal with the following specific circumstances:

  • the effects of a three-week strike at the Zondereinde division which resulted in revenue losses of R192 million;
  • capital outlay of approximately R55 million associated with the rebuild of the smelter at Zondereinde, along with the toll treatment costs and the considerable lengthening of the working capital pipeline and increased cost of production during the toll treatment period ; and
  • funding the balance of the Booysendal capital expenditure programme amounting to approximately R530 million in the 2014 financial year .
  • funding of Zondereinde’s ongoing capital programme

After an extensive board and executive management review of the company’s capital and funding requirements, it was agreed to implement a balanced funding programme, with a view to:

  • strengthen the company’s balance sheet with a moderate equity injection, amounting to less than 4% of the company’s current issued share capital in order to provide for a portion of Northam’s permanent capital requirements, against the backdrop of the R4 billion capex programme at Booysendal, which is now nearing completion;
  • strengthening Northam’s medium-term funding capacity through the introduction of a new revolving credit facility, and
  • pro-actively address Northam’s key short to medium term potential borrowing risks and exposure, by introducing amendments to its revolving credit facility.

A circular with details of the claw back offer will be posted to shareholders on or about 18 November 2013. The claw back offer remains conditional upon, inter alia, approval by the JSE of the listing of the claw back shares and the related circular.

Issued by Russell & Associates
Johannesburg
20 September 2013

New R1 Billion funding programme and amendments to the existing R1 Billion credit facility


Interest rate reset announcement

Noteholders are hereby advised of the interest rate reset on the following note.


Noteholders are hereby advised of the interest rate reset on the following Note:

NHM001 8.633% p.a. (350bps above 3 month Jibar of 5.133%) for the period 4 September 2013 to 3 December 2013, payable on 4 December 2013 (Modified Following*)
  Next reset: 4 December 2013

JIBAR rates as at 4 September 2013: 3 Month 5.133%

*When the Interest Payment Date falls on a non-business day, one of the following business day conventions will be applied, as specified for each individual bond in its applicable pricing supplement:

  1. Following: Means interest will be paid on the first business day after the weekend or public holiday.
  2. Modified Following: Means interest will be paid on the first business day after the weekend or public holiday. However, if the first business day after the weekend or public holiday falls in a new calendar month, interest will then be paid on the last business day before the weekend / public holiday.
  3. Preceding: Means interest will be paid on the last business day before the weekend or public holiday.

Sponsor and Debt Sponsor
One Capital

Change to the board of directors

In compliance with paragraph 3.59(b) of the Johannesburg Stock Exchange listings requirements, shareholders of Northam are advised that Dr N J Dlamini has resigned as a non-executive director, with effect from 30 September 2013.


In compliance with paragraph 3.59(b) of the Johannesburg Stock Exchange listings requirements, shareholders of Northam are advised that Dr N J Dlamini has resigned as a non-executive director, with effect from 30 September 2013.

The board would like to thank Dr Dlamini for her invaluable contribution to the company during her nine year tenure as a director of Northam.

Sponsor and Debt Sponsor
One Capital

Solid year for Northam Platinum

Northam Platinum Limited (Northam) posted results for the year ended 30 June 2013 to shareholders today.


Booysendal mine successfully commissioned

Johannesburg, Thursday 15 August 2013. Northam Platinum Limited (Northam) posted results for the year ended 30 June 2013 to shareholders today.

Key features for the year:

  • Operational recovery at Zondereinde sustained
  • Sales revenues increase by 20% to R4.4 billion
  • Operating and unit cash cost increases well contained
  • Operating margin 13.7%
  • Booysendal mine successfully commissioned
  • Earnings per share 62.6% higher

Reviewed preliminary results for the year ended 30 June 2013 (PDF - 590KB)

Financial results

Northam posted improved results year on year on the back of higher sales volumes combined with the weakness of the rand which contributed to a 20.0% increase in sales revenues to R4.4 billion (F2012: R3.7 billion).

Metal sales were up by 7.3% to 10 704kg (F2012: 9 980kg) and over the reporting year the rand had weakened by 13.5% against the US dollar to an average of R8.82/US$. At the same time the average US dollar price realised during the period declined by 5.1% from US$1 345 per ounce to US$1 276 per ounce (3PGE+Au).

Cost of sales increased by 14.0% to R3.8 billion, driven by higher volumes sold and higher operating costs. Operating costs were up by 7.3%, reflecting the sustained impact of higher labour and power costs - the most significant components contributing to mining inflation in South Africa. The cost of sales was also adversely impacted by a 60.6% increase in refining costs owing to a weaker ZAR/Euro exchange rate and the outsourcing of smelter services.

Investment revenues were 38.0% lower at R33.4 million (F2012: R54.0 million) owing to the depletion of cash reserves which were used for the construction of the Booysendal mine. After taking account of finance charges incurred, and increases in sundry income, the operating profit increased by 70% to R607.7 million.

Operations – Zondereinde mine

The safety performance at the Zondereinde mine was improved year on year, with some notable achievements in reducing both fatalities and injury rates.

Tonnages milled at Zondereinde mine were 9.4% up at 2 115 712 tonnes, yet the head grade was lower at 4.9g/t (F2012: 5.1g/t) – attributable largely to the lower average UG2 grade, reflecting some poor grade control. Chief executive Glyn Lewis explained that this would be a key focus area for management in the year ahead. In spite of the lower head grade, metal output from underground operations was 5.4% higher.

Production was badly impacted by a three-week strike by rock drill operators (RDOs) in April this year. Their dispute was centred on the payment methodology of production related bonuses. These differences have since been resolved. Wage negotiations for F2014 have begun at Zondereinde.

Operations – Booysendal mine

The group’s new Booysendal mine on the eastern limb was commissioned in the second half of the F2013 financial year. At 30 June 2013 the labour force numbered 1 915 people. Booysendal recorded a million fatality free shifts on 9 March 2013, a commendable achievement in start-up phase.

A total of 242 602 tonnes were milled in F2013, to produce 473kg of metal in concentrate which has been processed. To counter certain delays in the construction of conveyors and other services underground, management has taken on additional contractors in a temporary capacity to mitigate delays to the production ramp-up.

With the permanent power supply having been commissioned in early March this year, the cold and hot commissioning of the concentrator continued until the year end. During this phase, a number of issues have been identified for rectification. These have largely been remedied.

Lewis concluded today that the platinum industry in South Africa remains dominated by social and economic uncertainty, which is manifested in certain uncontrollable factors such the exchange rate between the US dollar and the South African rand, as well as the strong possibility of labour disruptions during F2014. “Northam’s performance will depend largely on a combination of market circumstances and international metal prices, a peaceful and productive labour force, and regular underground mining conditions.”

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

Trading statement and general update

Shareholders are advised that the group’s earnings and headline earnings per share for the year ended 30 June 2013 are estimated to be between 60% and 70% higher than in the previous comparable period. Earnings per share of 81.2 cents and headline earnings per share of 80.9 cents were reported for the year ended 30 June 2012.


Shareholders are advised that the group’s earnings and headline earnings per share for the year ended 30 June 2013 are estimated to be between 60% and 70% higher than in the previous comparable period. Earnings per share of 81.2 cents and headline earnings per share of 80.9 cents were reported for the year ended 30 June 2012.

The anticipated increase in earnings reflects, inter alia, higher sales volumes, coupled with a higher average basket price realised during the period under review, in comparison with the previous comparable period, notwithstanding certain production interruptions experienced during the financial year (as notified to Shareholders in previous announcements).

The weighted average number of shares in issue during the year ended 30 June 2013 was 382 560 902, compared to 382 426 483 shares in issue during the year ended 30 June 2012.

This information contained in this trading statement has not been reviewed or reported on by the group’s auditors.

It is anticipated that the reviewed preliminary results for the year ended 30 June 2013 will be released on or about 15 August 2013.

Booysendal mine

The Booysendal mine was successfully commissioned by 30 June 2013 and commercial production commenced with effect from 1 July 2013. During the commissioning phase that occurred prior to 30 June 2013, approximately 15 000 oz (3PGE+Au) were produced and some 3 500 oz were sold, the proceeds of which were capitalised.

At 30 June 2013 Booysendal had a stockpile of approximately 400 000 tonnes. Northam estimates that design capacity of 150 000 mill tonnes per month should be achieved during the second half of calendar year 2015.

Zondereinde smelter update

Shareholders are referred to the announcements published on 16 and 23 May 2013, respectively, regarding the rebuild of the Zondereinde smelter. The smelter rebuild is progressing in accordance with the planned operational procedures to complete this process and during the rebuild period, a third party is toll treating Zondereinde’s production.

The total estimated direct cost of the smelter rebuild is approximately R55 million and these costs overlap the financial years ended 30 June 2013 and ending 30 June 2014. The aforesaid cost estimate does not include working capital fluctuations attributable to the rebuild and excludes the opportunity costs, including interest associated with toll treatment of production. This cost estimate has not been reviewed or reported on by the Company’s auditors.

Update on Domestic Medium Term Note Programme (“DMTN Programme”) and funding arrangements

Northam successfully executed a R120 million tap issue in terms of its existing DMTN Programme during July 2013. Following this issue, Northam has a capital amount of R1 370 million in issue in terms of the DMTN Programme. All these notes mature on 4 September 2015.

In addition to the debt funding from the DMTN Programme, Northam has a R1 billion revolving credit facility (“RCF”).

General industry outlook

Northam’s operations remain vulnerable to, inter alia, factors affecting the South African general mining industry and, in particular, the platinum sector.  At the time of this announcement and for the foreseeable short to medium term, the South African mining industry remains engaged in industry wide wage negotiations, as frequently reported on in the public domain and through press commentary.  Should such wage negotiations result in industrial action, Northam’s operations may be affected.  Northam therefore remains cautious about production and other estimates, until such time as clarity in the mining industry in general and in respect of Northam’s operations specifically has been achieved.

Johannesburg
8 August 2013

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

Listing of a tap issue – NHM001

The Johannesburg Stock Exchange has granted approval with effect from 11 July 2013 for the listing of a tap issue of NHM001 Senior Unsecured Floating Rate Notes, under the Northam R2 000 000 000 Domestic Medium Term Note Programme dated 3 August 2012.


The Johannesburg Stock Exchange (JSE) has granted approval with effect from 11 July 2013 for the listing of a tap issue of NHM001 Senior Unsecured Floating Rate Notes, under the Northam R2 000 000 000 Domestic Medium Term Note Programme dated 3 August 2012.

Instrument Type Floating Rate Notes
Total Notes in Issue R1 370 000 000 as at the Issue Date
   
Instrument Code: NHM001
Nominal Issued: R120 000 000
Total NHM001 Notes in Issue: R1 370 000 000
Issue Price: 101.261515%
Interest Rate: 8.625% (3-month Jibar of 5.125% as at 4 June 2013 plus 350 basis points)
Coupon Rate Indicator:  Floating
Tap Issue Date: 11 July 2013
Interest Commencement Date:  4 June 2013
Initial Issue Date: 4 September 2012
Maturity Date: 4 September 2015
Last Day to Register: By 17h00 on 22 February, 24 May, 24 August and 23 November of each year until the Maturity Date
Books Close: 23 February, 25 May, 25 August and 24 November of each year until the Maturity Date
Interest Payment Dates:       4 March, 4 June, 4 September and 4 December of each year until the Maturity Date
First Interest Payment Date: 4 September 2013
Interest Reset Dates: 4 March, 4 June, 4 September and 4 December of each year until the Maturity Date
ISIN: ZAG000099524
Business Day Convention: Modified Following
Dealer: Nedbank Capital
Arranger: One Capital

Notes:

  1. The tap issue notes were placed at a lower interest rate of Jibar plus 330bps, which is accounted for in the issue price.
  2. The Notes will be immobilised in the Central Securities Depository (“CSD”) and settlement will take place electronically in terms of the JSE Rules.

11 July 2013

Debt Sponsor
One Capital

Interest rate reset announcement

Noteholders are hereby advised of the interest rate reset on the following note.


Noteholders are hereby advised of the interest rate reset on the following note:

NHM001 8.625% p.a. (350bps above 3 month Jibar of 5.125%) for the period 4 June 2013 to 3 September 2013, payable on 4 September 2013 (Modified Following*)
  Next reset: 4 September 2013

JIBAR rates as at 4 June 2013: 3 Month 5.125%

*When the Interest Payment Date falls on a non-business day, one of the following business day conventions will be applied, as specified for each individual bond in its applicable pricing supplement:

  1. Following: Means interest will be paid on the first business day after the weekend or public holiday.
  2. Modified Following: Means interest will be paid on the first business day after the weekend or public holiday. However, if the first business day after the weekend or public holiday falls in a new calendar month, interest will then be paid on the last business day before the weekend / public holiday.
  3. Preceding: Means interest will be paid on the last business day before the weekend or public holiday.

Debt Sponsor
One Capital

Fatality at Zondereinde mine

Northam Platinum management advises with regret that an employee lost his life in a fall of ground accident at the company’s Zondereinde mine yesterday afternoon, Monday 27 May 2013.


Northam Platinum management advises with regret that an employee lost his life in a fall of ground accident at the company’s Zondereinde mine yesterday afternoon, Monday 27 May 2013. One other employee sustained injuries in the accident. He is being treated in hospital and is in a satisfactory condition.

Mine management has notified the Department of Mineral Resources (DMR), while operations have been suspended at the mine pending a joint investigation into the cause of the accident by the DMR, Mine Management and organised labour.

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

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

Update on Northam’s Zondereinde smelter

Further to the company’s announcement on 16 May 2013 with regard to the reduction of energy intensity at the Zondereinde mine smelter, a series of ultrasonic tests and temperature readings have demonstrated erosion of the refractory bricks comprising the walls of the smelter in proximity to the slag interface. This has necessitated a rebuild of the smelter.


Further to the company’s announcement on 16 May 2013 with regard to the reduction of energy intensity at the Zondereinde mine smelter, a series of ultrasonic tests and temperature readings have demonstrated erosion of the refractory bricks comprising the walls of the smelter in proximity to the slag interface. This has necessitated a rebuild of the smelter.

Further pyrometallurgical and chemical analyses will be carried out to ascertain the cause of the erosion.

The Zondereinde mine and concentrators continue to operate normally, while the concentrate will be treated on a toll basis at other facilities.

The duration and cost of the rebuild will be determined in due course as further information becomes available.

Johannesburg
23 May 2013

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