Announcements 2014

Zondereinde mine – shaft accident

The management of Northam regrets to advise of an incident at the company’s Zondereinde mine on the afternoon of Sunday 27 July 2014 during routine maintenance work in the shaft.



The management of Northam regrets to advise of an incident at the company’s Zondereinde mine on the afternoon of Sunday 27 July 2014 during routine maintenance work in the shaft.

The incident occurred in the mine’s No.1 Shaft when a counterweight in one of the shaft’s hoisting compartments became detached and fell down to the bottom causing damage to the steelwork between 12 and 13 levels, approximately 2 000 metres underground. There were no injuries.

The shaft will be out of commission for up to six weeks for repairs. During this time the mine’s production will be reduced by approximately 50%. No 2 shaft remains fully operational.

Further investigations into the cause of the incident will be carried out together with the DMR.

Johannesburg
28 July 2014

Issued by
Russell & Associates
Johannesburg
Tel +27 (0)11 880 3924

Further cautionary announcement

Northam shareholders are referred to the cautionary announcements released on SENS on Thursday, 27 March 2014 and Thursday 15 May 2014, wherein shareholders were advised of a proposed transaction to increase Northam’s Historically Disadvantaged South African share ownership levels within the company (proposed HDSA transaction).



Northam shareholders are referred to the cautionary announcements released on SENS on Thursday, 27 March 2014 and Thursday 15 May 2014, wherein shareholders were advised of a proposed transaction to increase Northam’s Historically Disadvantaged South African share ownership levels within the company (proposed HDSA transaction).

Shareholders are further advised that details of the proposed HDSA transaction are being finalised and the proposed transaction, if successfully concluded, may have a material effect on the price of the company’s securities. Accordingly, shareholders are advised to continue exercising caution when dealing in the company’s securities until a full announcement is made.

Johannesburg
27 June 2014

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 9.30% p.a. (350bps above 3 month Jibar of 5.80%) for the period 4 June 2014 to 3 September 2014, payable on 4 September 2014 (Modified Following*)
  Next reset: 4 September 2014

JIBAR rates as at 4 June 2014: 3 Month 5.80%

*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.

4 June 2014

Sponsor and Debt Sponsor
One Capital

Further cautionary announcement

Northam shareholders are referred to the cautionary announcement released on SENS on Thursday, 27 March 2014.


Northam shareholders are referred to the cautionary announcement released on SENS on Thursday, 27 March 2014, wherein shareholders were advised of a proposed transaction to increase Northam’s Historically Disadvantaged South African share ownership levels within the company (proposed HDSA transaction).

Shareholders are further advised that the proposed HDSA transaction is still in progress and if successfully concluded, may have a material effect on the price of the company’s securities. Accordingly, shareholders are advised to continue exercising caution when dealing in the company’s securities until a full announcement is made.

Johannesburg
15 May 2014

Corporate Advisor, Sponsor and Debt Sponsor
One Capital

Cautionary announcement

In an announcement published on SENS on 3 August 2012, Northam shareholders were advised that as a result of the then significant decline in the share prices of platinum group metal producers, certain of Northam’s HDSA shareholders had been compelled to dispose of a significant portion of their Northam shares following the breach of related finance agreement covenants.


In an announcement published on SENS on 3 August 2012, Northam shareholders were advised that as a result of the then significant decline in the share prices of platinum group metal producers, certain of Northam’s HDSA (Historically Disadvantaged South African) shareholders had been compelled to dispose of a significant portion of their Northam shares following the breach of related finance agreement covenants.

In this regard, Northam has made significant progress in structuring a proposed transaction which will increase its HDSA ownership level (proposed HDSA transaction). The terms of the proposed HDSA transaction are being finalised and a detailed announcement in this regard will be released in the near future.

The detailed terms of the proposed HDSA transaction may have a material effect on the price of the company’s securities. Accordingly, shareholders are advised to exercise caution when dealing in the company’s securities until a further announcement in this regard is made.

Johannesburg
27 March 2014

Corporate Advisor, Sponsor and 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 9.200% p.a. (350bps above 3 month Jibar of 5.700%) for the period 4 March 2014 to 3 June 2014, payable on 4 June 2014 (Modified Following*)
  Next reset: 4 June 2014

 

JIBAR rates as at 4 March 2014: 3 Month 5.700%

*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.

4 March 2014

Sponsor and Debt Sponsor
One Capital

Strike action hits Northam H1 results

Northam Platinum Limited today posted results for the six months ended 31 December 2013.


Johannesburg, Friday 21 February 2014. Northam Platinum Limited (Northam) today posted results for the six months ended 31 December 2013.

Key features

  • Protracted strike action (79 days) at Zondereinde
  • Significant decline in production and sales
  • First operating loss recorded since 1998
  • Booysendal ramp-up progressing
  • R1 billion raised in successful fund raising

Results for the six months ended 31 December 2013 (PDF - 128KB)

Introduction

The most significant feature of the reporting period was the loss recorded by the company, the first since 1998, reflecting the damaging effect of the strike at the Zondereinde operation, which at 11 weeks was one of the longest in the South African labour environment.

Commenting on the strike, Northam CEO Glyn Lewis said today, “It is probably worth reminding our stakeholders that by the time employees proceeded on strike action on 3 November 2013 our offer was already equal to or better than any other settlement the NUM had agreed to in the mining industry. I am sure that, after 11 lean weeks, a lot of questions remain about the wisdom of this move, given the final settlement. Apart from the serious losses incurred by the company and shareholders, employees also lost R151 million in wages.

“We hope that common sense will prevail sooner rather than later in the current impasse in the platinum sector. Perhaps there is also some merit in an overhaul of some of the legislation surrounding industrial action. We believe, for example, that this should include the introduction of an independent strike ballot process, and that strike action should only proceed if the overwhelming majority of all union members vote in favour of strike action. Furthermore, the validity of a strike certificate should be limited to one week.”

Operations - Zondereinde

Production at Zondereinde was slashed by almost 30% to 3 477kg (H1 F2013: 4 889kg); PGM sales however were less severely hit owing to release of inventory build-up during the Zondereinde smelter rebuild which took three months from June to October 2013. The additional revenue from these sales contributed to the mine breaking even at an operating level.

Mining conditions at Zondereinde continue to be impacted by poor ground conditions particularly on the Merensky reef. This has been exacerbated by the downtime occasioned by the strike and requires slow and careful mining start-up activities. Steady progress has been made with the decline project including initial stoping from 15 level.

The industrial action had little effect on the rate of capital expenditure which consumed R243.5 million, with the smelter rebuild and the deepening project being the main capex items.

Labour relations

Wage negotiations at Zondereinde started on 31 July 2013. From the outset the negotiations were challenging, and marked by disputes. Following the intervention of third party facilitators and extensive talks, the NUM was granted a certificate of non-resolution and proceeded with strike action with effect from 3 November 2013. The strike continued for 79 days beyond the end of the reporting period until 21 January 2014. Losses amounted to 48 000oz of PGMs, revenues of R750 million and employees lost R151 million in wages. The settlement reached included increases ranging from 7.5% to 9.5%, along with an ex gratia payment of R3 000 per employee.

Operations - Booysendal

Booysendal came into production on 1 July 2013, and the ramp-up continues. Mining averaged 102 000 tonnes/month, but the mill throughput was significantly higher at 145 000 tonnes/month, supplemented by the surface stockpile in order to produce as much metal as possible to mitigate the effect of the strike at Zondereinde. At 31 December 2013 the surface stockpile contained 197 000 tonnes of run of mine (ROM) ore. Total tonnes milled in the six months amounted to 870 072 tonnes.

This strategy of adding stockpile tonnes to the mill resulted in unit costs for the period being artificially low. This will normalise as run of mine tonnages build up from underground. A more realistic impression of Booysendal ’s cost performance will become apparent once the mine ramps up to steady state production and the initial stockpile is depleted.

Booysendal recorded an operating loss of R131 million for the reporting period.

Capital expenditure in the first half of F2014 was R270.1 million (H1 F2013: R761.8 million). A further R314.6 million is expected to be spent in the remainder of the financial year on the underground capital footprint.

Since inception the total capital expenditure for the development of Booysendal mine is R4.3 billion against a projected total expenditure of R4.6 billion. The original capital budget for Booysendal was R3.9 billion in June 2010 terms.

Financial arrangements

The group ’s total debt facilities currently amount to R2.77 billion. This includes a revolving credit facility of R1.4 billion and R1.37 billion in a domestic medium term notes programme. In the current reporting period the group also raised an additional R1 billion through a R600 million claw-back rights offer underwritten by Coronation Asset Management (Proprietary) Limited and a R400 million additional revolving credit facility from Nedbank. Further, certain covenant conditions have been relaxed until December 2014. At the end of the reporting period an amount of R750 million was still available and uncommitted.

Prospects

Social and economic uncertainty is likely to continue to influence the fortunes of the platinum industry in the near future. Barring any disruptions to Northam ’s operations in the second half of the financial year, the Zondereinde mine is expected to recover to a steady state of production and the Booysendal mine to continue its production build-up. The financial performance of the company for the full year however, will be negatively impacted by the 11 week strike which ended on 21 January 2014.

Issued by
Russell & Associates
Johannesburg
Tel +27 (0)11 880 3924

Successor named at Northam

The board of Northam announces the appointment of Mr Paul Dunne as successor to Mr Glyn Lewis, current Chief Executive Officer (CEO) of Northam.


Paul Dunne profile picThe board of Northam announces the appointment of Mr Paul Dunne as successor to Mr Glyn Lewis, current Chief Executive Officer (CEO) of Northam. This follows a decision by Mr Lewis to slightly accelerate his retirement plans as Northam’s CEO. In the best interests of Northam and in order to ensure a smooth transition, the board is therefore pleased to confirm that Mr Lewis will remain an employee of Northam until his current employment contract expires on 30 June 2014.

The appointment of Mr Dunne arises from a comprehensive process followed by the board to timeously find a suitable replacement for Mr Lewis.

Mr Dunne is a former executive director of Impala Platinum Holdings Limited (Implats) who held responsibility for mining, concentrating and smelting operations at Implats’ Rustenburg and Marula mines. The board has full confidence in Mr Dunne’s ability to take over from Mr Lewis and is pleased to have found a highly qualified and experienced replacement for Mr Lewis.

In order to allow Mr Dunne to effectively fulfil his position as new CEO and to do so as soon as possible, whilst ensuring a smooth transition with Mr Lewis, Mr Dunne will assume the CEO role with effect from 1 March 2014.

Mr Lewis joined Northam in 2001 as manager of the Zondereinde division and was appointed as CEO in 2005. During Mr Lewis’ tenure the geologically challenging and technically difficult operation at Zondereinde has been placed on a stable and sustainable footing. Decline access to 2 300 metres below shaft collar is being developed, where new levels, to access conformable Merensky Reef reserves will progressively become available for mining. The Booysendal project was commissioned on 30 June 2013, on schedule, within budget and is currently being ramped up to the design capacity of 150 000 tons milled per month.

Northam’s directors express their grateful appreciation to Mr Lewis for his outstanding service to the company and its stakeholders and especially for pro-actively ensuring that a smooth transition with Mr Dunne will occur. They wish him well in his future endeavours and they welcome Mr Dunne as CEO.

Issued by
Russell & Associates
Johannesburg
Tel +27 (0)11 880 3924

Trading statement

Shareholders are advised that Northam anticipates reporting a loss per share and headline loss per share of between 15 and 25 cents for the reporting period ended 31 December 2013.


Shareholders are advised that Northam anticipates reporting a loss per share and headline loss per share of between 15 and 25 cents for the reporting period ended 31 December 2013. This compares with earnings and headline earnings per share of 35.6 and 36.3 cents respectively for the six months ended 31 December 2012.

The expected decline in earnings is largely attributable to the industrial action which started on 3 November 2013 and ended on 21 January 2014 at the group’s Zondereinde mine, which will cost the group approximately R750 million in lost revenue for F2014. The group’s new Booysendal mine, which commenced production in July 2013, is still ramping up to full production, and is not yet in a position to contribute positively to the group’s earnings.

The weighted average number of shares in issue for the period ended 31 December 2013 increased to 384 461 090 compared to 382 536 125 shares in issue for the period ended 31 December 2012, reflecting the effects of the claw-back rights offer concluded in December 2013.

This estimate has not been reviewed or reported on by the group’s auditors.

It is anticipated that the interim results for the six months ended 31 December 2013 will be released on or about 21 February 2014.

Issued by
Russell & Associates
Johannesburg
Tel +27 (0)11 880 3924

Settlement reached at Northam’s Zondereinde mine

Northam management is pleased to advise that the strike at the company’s Zondereinde mine has ended. Employees are expected to return to work tomorrow, Wednesday 22 January 2014. This follows the signing of a two-year wage agreement this afternoon.


Johannesburg, Tuesday 21 January 2014. Northam management is pleased to advise that the strike at the company’s Zondereinde mine has ended. Employees are expected to return to work tomorrow, Wednesday 22 January 2014. This follows the signing of a two-year wage agreement this afternoon.

The two-year wage agreement is based on increases on basic wages of 8.5% to 9.5% for Category 2 to 8 employees, and a 9% increase in the living out allowance; Category 9 to 10 employees’ increases range from 7.5% to 8%, with a living out allowance increase of 7%.

Upon return to work, the company will pay an ex-gratia amount of R3 000. The terms for payment of the ex-gratia amount will be applied in the manner elected by employees, i.e. either upfront or over time.

Northam’s revenue losses are estimated at R749.7 million and employees have lost R151.7 million in wages.

Northam chief executive Glyn Lewis noted today that the focus now would be on ensuring a safe and expeditious return to work and start-up of operations.

Issued by
Russell & Associates
Johannesburg
Tel +27 (0)11 880 3924