Announcements 2015

Full capital redemption

In accordance with the Terms and Conditions of Northam’s ZAR 2 000 000 000 Domestic Medium Term Note Programme dated 3 August 2012, investors are herewith advised of the full capital redemption of the NHM001 notes.


In accordance with the Terms and Conditions of Northam’s ZAR 2 000 000 000 Domestic Medium Term Note Programme dated 3 August 2012, investors are herewith advised of the full capital redemption of the NHM001 notes (“Notes”), effective on Friday, 4 September 2015, the maturity date of the Notes.

  Capital Redemption Amount Amount Outstanding after the Capital Redemption
NHM001 R1 370 000 000 R0.00

Johannesburg
28 August 2015

Sponsor and Debt Sponsor
One Capital

Steady progress at Northam

The company’s results for the 2015 financial year were released on SENS this morning and posted to shareholders today, Thursday 20 August.


Sustained focus on costs in challenging markets

The company’s results for the 2015 financial year were released on SENS this morning and posted to shareholders today, Thursday 20 August.

The main features of the year:

  • Empowerment status secured
  • Successful capital raising of R4.6 billion
  • Acquisition of Everest signals strategic growth on track
  • Satisfactory performance from operations
  • Booysendal ramp-up on track
  • Depressed market fundamentals persist
  • Three-year wage deal signed (post year-end)

The R6.6 billion Black Economic Empowerment (BEE) equity transaction with Zambezi Platinum (RF) Limited (Zambezi Platinum), was the singlemost important development of the year. With its empowerment status now pegged at 35.4%, Northam was ideally placed to acquire the Everest mine assets and mineral reserves from Aquarius Platinum South Africa Proprietary Limited (AQPSA) during the year. This asset will be integrated into Northam’s Booysendal South operation which has a large unmined resource.

Developing the Booysendal South property is expected to continue over the next five years.

However, commenting on the lacklustre markets, Northam chief executive Paul Dunne said today, “Dollar-denominated metal prices have progressively declined over the year, reflecting an oversupplied platinum market. The simultaneous weakening of the South African (SA) rand has not fully compensated for this decline.

“With the pressure on our revenue line from a declining basket price, our focus has been and continues to be on containing the unit costs of producing each platinum group metal ounce.”

Financial overview

Main features of the income statement

  • Sales revenues up 13.0% to R6.1 billion
  • SA currency weakens to an average of R11.45/US dollar (F2014: R10.35/US dollar)
  • Operating profit of R595.8 million
  • Corporate transactions incur once-off expenditure amounting to R1 587 million
  • Loss of R1 033.9 million (F2014: profit of R19.6 million), in line with guidance
  • Loss per share of 264.3 cents (F2014: profit of 2.4 cents per share)

A 6.6% increase in PGM sales for the year at 422 630oz, combined with a weaker South African rand, contributed to the 13.0% rise in sales revenues to R6 035.5 million. Year on year, the rand was 10.6% weaker against the US dollar. The higher sales volumes are on the back of increased production volumes for the group (excluding purchased concentrates) which were up 15.1% to 378 070 oz.

Booysendal’s new production, higher power and wage costs, combined to push operating costs up by 22.8% The increase in the cost of sales was only 3.1% however, and Northam’s operating profit for the year was R595.8 million (F2014: R61.4 million), attributed to the solid operating performance of the group’s underlying assets.

Sundry expenditure amounted to R1 587.3 million (F2014: R26.7 million) reflecting accounting charges and costs associated with the two major corporate deals undertaken in the current year. These expenses impacted negatively on the bottom line, resulting in the group reporting a loss of R1 033.9 million (F2014: profit of R19.6 million), and a loss per share of 264.3 cents (F2014: profit of 2.4 cents per share) reflecting the year’s loss and the effect of the increase in the weighted average number of shares in issue of 391 834 708 shares (F2014: 390 969 652).

The cash balance of the group at year end was a healthy R4 138.2 million, most of which was received in May 2015, following a capital raising in conjunction with the BEE transaction.

Operations

Zondereinde

Turning to the operations, Dunne commented, “The Zondereinde mine is operating at steady state, and its performance during the year under review reflects this stability and our confidence in its sustainability.” Despite the shaft incident early in the financial year, and the one-week work stoppage in January, Zondereinde’s tonnages were 7.9% higher. The UG2 performance was good, as management works towards shifting the mining ratio at Zondereinde towards 65:35 UG2: Merensky. This has necessarily had an impact on the average head grade which declined marginally year on year to 4.9g/t (F2014: 5.0g/t).

Metals produced from underground increased by 8.4% to 255 595oz, while concentrates purchased grew by 18.4% to 75 168oz.

Challenging geology continues to put pressure on mining flexibility on the Merensky reef horizon. With modifications planned to the processing plant, the smelter will be in a position to accommodate the higher proportion of UG2 reef.

Construction of the decline section for the deepening project has progressed satisfactorily; an underground refrigeration plant was commissioned during the year which has considerably improved environmental conditions in the deepening section of the mine. The completion of infrastructure associated with the deepening project will provide access to good quality Merensky reef and increase the life of Zondereinde to more than 20 years.

Wage negotiations got underway in May 2015 and were successfully concluded after the year end when a three-year agreement was signed with the National Union of Mineworkers.

Northam has taken a cautious approach to capital spending. Certain non-essential expenditure was deferred resulting in total spend of R303.2 million at Zondereinde, including the deepening project.

Commenting on this cutback, Dunne said, “We cannot, however, defer capital projects indefinitely and we shall persist with projects that are of strategic importance to the business.

“This will include the construction of a new furnace, an upgrade to the UG2 concentrator and the development of mining infrastructure to 18 level to extend the life of the mine. The annual cost of this five-year deepening project is expected to run to R130 million and is included in Zondereinde’s F2016 stay in business capital estimate of R303.0 million.

Processing and refining

The group’s processing and refining capability is a strategic advantage. A decision has been made to increase the throughput of the UG2 concentrator from the current 90 000 tonnes per month. Testwork is currently in progress, the results of which will inform the final design parameters for the upgrade. This project is expected to cost R60 million.

The board has approved capital expenditure for the installation of an additional 20MW furnace as part of the smelter expansion and de-risking programme. To date, a sum of R10.0 million has been committed for design and drawing work for the new furnace. The additional capacity will add mining flexibility, allowing for higher volumes of UG2 ore to be mined and treated and will support the growth in production from Booysendal.

Earlier this year a new autoclave with sufficient capacity to match the potential throughput from the expanded smelter facility was installed and commissioned at the base metal removal plant at a cost of R31.0 million.

Booysendal

Booysendal continued the ramp-up to its annual steady-state PGMs production target of 160 000oz planned to be reached in the first half of F2016. For the year as a whole Booysendal’s run-of-mine production totalled 1 670 437 tonnes (F2014: 1 233 089 tonnes) with the tonnage milled increasing to 1 786 375 tonnes (F2014: 1 517 109 tonnes) at a head grade of 2.6g/t (F2014: 2.6g/t). The concentrator performed well above its nameplate capacity in the last three months of the year, achieving an average recovery of 86%.

Underground the last two production sections are being equipped, thereby completing the original capital footprint. There have been significant advances in planning to exploit the Merensky reef, with bulk sampling work in progress. A decision to develop a Merensky mining module will be taken in the second half of F2016.

Conceptual design work on exploiting the Booysendal South orebody (including the former Everest mine infrastructure) will be progressed to a feasibility study. The decision to begin construction of new mining modules will be informed by market conditions and the potential return on investment. The feasibility is expected to cost R22.0 million and will be completed by May 2016.

With the progression towards steady-state levels, costs are approaching more realistic levels. Booysendal’s total operating costs were R1 192.2 million against R806.8 million in F2014 with unit operating costs 0.9% lower at R358 554/kg (F2014: R361 902/kg) and cash costs 11.3% higher at R308 719/kg (F2014: R277 308/kg).

As Booysendal reaches its design capacity, capital expenditure levels have declined accordingly. Total capital expenditure since the start of the phase 1 Booysendal mine development is expected to close out at R4.5 billion.

Business Outlook

Prospects for PGMs in the short to medium term seem to remain subdued.  Higher costs, mainly from labour and power inputs have eroded margins. However, Northam remains well placed to take advantage of opportunities that may arise from the current adverse economic conditions.

The recent three-year wage agreement with the recognised union at the Zondereinde mine provides stability going forward and allows management to focus on operational matters. On the eastern limb social unrest poses a risk to normal operations at Booysendal.

The group’s financial performance depends largely on better metal prices, and a stable working environment. Management is confident that the group’s strong balance sheet and prudent financial controls will provide support until such time that metal prices rise sustainably.

Trading statement

Northam’s R6.6 billion black economic empowerment (BEE) equity transaction (BEE Transaction), which raised the Company’s empowerment levels to 35.4% secured for 10 years, and incorporated an equity injection, was the single most important development for the Company in the financial year ended 30 June 2015.


Northam’s R6.6 billion black economic empowerment (BEE) equity transaction (BEE Transaction), which raised the Company’s empowerment levels to 35.4% secured for 10 years, and incorporated an equity injection, was the single most important development for the Company in the financial year ended 30 June 2015.

As is customary with transactions of this nature, certain once-off charges were incurred during the year, including a “share based payment” charge in terms of International Financial Reporting Standards 2 (IFRS). In combination, these expenses have had an impact on the income statement, resulting in the Company anticipating reporting a net loss for the period under review.

The anticipated loss is not a reflection of the performance of the Group’s operating assets, all of which performed satisfactorily during the year. The Booysendal mine is continuing to ramp up to full production and has contributed positively to the Group’s results for the year ended 30 June 2015.

Non-recurring transaction costs

Shareholders were advised in the BEE Transaction circular dated 17 February 2015 (Transaction Circular) that the BEE Transaction would attract an adverse initial IFRS share-based payment charge (BEE IFRS Charge), as illustrated in the pro forma financial effects of the Transaction Circular. The BEE IFRS Charge is non-recurring and will be fully accounted for in the Group’s results for the year ended 30 June 2015.

The BEE Transaction also included a R400 million once-off lock-in and restraint payment (Lock-in and Restraint Payment) for Northam’s BEE partners, represented by Zambezi Platinum (RF) Limited, in respect of the 10 year BEE period. The Lock-in and Restraint Payment is a non-recurring expense and will be fully accounted for in the Group’s results for the year ended 30 June 2015.

Other sundry non-recurring BEE Transaction implementation costs and impairments of non-core assets will also be accounted for in the Group’s results for the year ended 30 June 2015.

Details of anticipated results:

  • the Group’s loss per share for the year ended 30 June 2015 is estimated to range between a loss of 264.06 cents per share and 265.54 cents per share, compared to the earnings of 2.4 cents per share reported for the year ended 30 June 2014, reflecting a decrease of between 11 103% and 11 123%, respectively; and
  • the Group’s headline loss per share for the year ended 30 June 2015 is estimated to range between a loss of 202.7 cents per share and 203.1 cents per share, compared to the headline earnings of 2.2 cents per share reported for the year ended 30 June 2014, reflecting a decrease of between 9 313% and 9 333%, respectively.

The weighted average number of shares in issue for the year ended 30 June 2015 increased to 391 834 708, compared to 390 969 652 shares for the year ended 30 June 2014. As part of the BEE Transaction, Northam issued 112 195 122 additional shares resulting in 509 781 212 shares in issue at 30 June 2015. Of these shares, 159 905 453 are treasury shares which are not accounted for in the above loss and headline loss per share calculation.

The 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 2015 will be released on or about 20 August 2015.

Johannesburg
17 August 2015

Sponsor and Debt Sponsor
One Capital

Wage settlement concluded at Northam’s Zondereinde mine

Northam Platinum is pleased to advise that wage negotiations at its Zondereinde mine have been concluded with the representative union, the National Union of Mineworkers.


Johannesburg, 30 July 2015: Northam Platinum is pleased to advise that wage negotiations at its Zondereinde mine have been concluded with the representative union, the National Union of Mineworkers.

The three-year agreement  provides for increases on basic wages and allowances of 13.0% for entry level underground employees in year one, 11.6% in year two and 10.5% in year three. 

Supervisory employees will receive a basic increase of 7.5% per year for each of the three years.

Northam chief executive Paul Dunne said today: “This is a good outcome for both employees and the company as it provides certainty and allows all stakeholders to focus on the sustainability of the business going forward. We also recognise the mature and constructive manner in which engagement has been undertaken.”

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

Marion Brower +27 (0) 82 895 0698
Charmane Russell +27 (0) 82 372 58164

Disruption to Booysendal operations - update

Further to the announcement on 21 July, Northam advises shareholders that operations at its Booysendal mine have normalised. 


Further to the announcement on 21 July, Northam advises shareholders that operations at its Booysendal mine have normalised. This follows on a successful intervention by the Minister of Mineral Resources, officials from the Department of Mineral Resources and local authorities to seek to resolve the issues that appear to have fuelled the community unrest.

Milling operations continued whilst employees were prevented from getting to work. 

Johannesburg
23 July 2015

Sponsor and Debt Sponsor
One Capital

Disruption to Booysendal operations

Shareholders are advised that civil unrest in the form of protests by communities in the Steelpoort valley is impacting the company’s production effort at its Booysendal mine.


Shareholders are advised that civil unrest in the form of protests by communities in the Steelpoort valley is impacting the company’s production effort at its Booysendal mine.

Protesters have been blocking roads and disrupting transport which has prevented employees getting to work. There have also been incidents of damage to the Lebalelo pipeline which supplies water to eastern limb operations.

Whilst mining operations have been disrupted, milling from the surface stockpile is continuing.

Shareholders will be advised of further developments.

Johannesburg
21 July 2015

Sponsor and Debt Sponsor
One Capital

Termination of the Northam American Depositary Receipt (“ADR”) program

Northam advises that the company’s sponsored ADR Level 1 program, through the Bank of New York Mellon (“BNY Mellon”), will terminate with effect from 15 June 2015.


Northam advises that the company’s sponsored ADR Level 1 program, through the Bank of New York Mellon (“BNY Mellon”), will terminate with effect from 15 June 2015.

The ADR program has attracted little or no interest since it was established in June 2011.

BNY Mellon ceased issuing Northam ADR’s on 1 June 2015.

Johannesburg
2 June 2015

Equity and debt sponsor to Northam 
One Capital

Notification in terms of section 122(3)(b) of the companies act, no. 71 of 2008 (the "Act") and section 3.83(b) of the JSE Limited listings requirements (“JSE Listing Requirements”)

Shareholders are referred to the Northam SENS announcement published on Wednesday, 20 May 2015 pertaining to the notification received from...


Shareholders are referred to the Northam SENS announcement published on Wednesday, 20 May 2015 pertaining to the notification received from shareholders in terms of section 122(3)(b) of the Act and section 3.83(b) of the JSE Listings Requirements.

The Public Investment Corporation SOC Ltd. (''PIC'') disposed of shares in Northam pursuant to Northam’s R6.6 billion, 10 year, secured broad-based black economic empowerment transaction (BEE Transaction). Following a review of their external managed holdings, the PIC has confirmed its total interest in the issued ordinary share capital of Northam to be 7.86% following the BEE Transaction.

Northam has filed the relevant notices with the Takeover Regulation Panel in terms of section 122(3)(a) of the Act.

Johannesburg
25 May 2015

Sponsor and Debt Sponsor
One Capital

Dealings in securities

Shareholders are referred to the Northam circular dated 17 February 2015 relating to Northam’s fully funded R6.6 billion, 10 year secured broad-based black economic empowerment transaction.


Shareholders are referred to the Northam circular dated 17 February 2015 relating to Northam’s fully funded R6.6 billion, 10 year secured broad-based black economic empowerment transaction (the “BEE Transaction”).

Pursuant to the BEE Transaction, certain Northam directors acquired beneficial interests in the ordinary share capital of Zambezi Platinum (RF) Limited (“Zambezi Platinum”). This has therefore resulted in the relevant Northam directors and their associates acquiring Northam shares. Disclosure of these directors interests are provided in the BEE Transaction circular.

In compliance with paragraph 3.63 of the JSE Limited Listings Requirements (“Listings Requirements”), shareholders are advised of the following indirect beneficial interests in Northam shares, held by directors and/or their associates through Zambezi Platinum.

Name of director: Mr PL Zim
Effective number of Northam ordinary shares: 17 547 097
Name of director: Ms TE Kgosi
Effective number of Northam ordinary shares: 635 000
Name of director: Mr CK Chabedi
Effective number of Northam ordinary shares: 204 000
Date of issue: 18 May 2015
Class of securities: Northam ordinary shares
Price per share: The nominal amount per Northam ordinary share
Nature and extent of directors’ interest: Indirect beneficial interest in Northam ordinary shares held by Zambezi Platinum
Transaction completed on market: No
Clearance obtained in terms of paragraph 3.66 of the Listings Requirements: Yes

Johannesburg
22 May 2015

Sponsor and Debt Sponsor
One Capital

Notification in terms of section 122(3)(b) of the companies act, no. 71 OF 2008 (the "Act") and section 3.83(b) of the JSE Limited Listings Requirements (“JSE Listing Requirements”)

Shareholders are referred to the Northam circular dated 17 February 2015 and the Northam offer circular dated 21 April 2015 relating to Northam’s...


Shareholders are referred to the Northam circular dated 17 February 2015 and the Northam offer circular dated 21 April 2015 relating to Northam’s fully funded R6.6 billion, 10 year secured broad-based black economic empowerment transaction (the “BEE Transaction”).

Pursuant to the BEE Transaction, and in accordance with Section 122(3)(b) of the Act and paragraph 3.83(b) of the JSE Listings Requirements, shareholders are advised of the following:

  • the Public Investment Corporation SOC Ltd. (''PIC'') has disposed of shares in Northam, and the total interest held by the PIC now amounts to 4.8% of the total issued share capital of Northam; and
  • Zambezi Platinum (RF) Ltd (“Zambezi Platinum”) has acquired shares in Northam, and the total interest held by Zambezi Platinum amounts to 31.4% of the total issued share capital of Northam

Northam will file the relevant notices with the Takeover Regulation Panel, as required in terms of section 122(3)(a) of the Act.

Johannesburg
20 May 2015

Sponsor and Debt Sponsor
One Capital