Announcements 2016

Notice of annual general meeting

The annual general meeting of Northam shareholders will be held at Glenhove Conferencing, 52 Glenhove Road, Melrose Estate, Johannesburg, South Africa on Wednesday, 9 November 2016 at 10:00 to transact the business as stated in the notice of annual general meeting, forming part of the abridged annual report 2016.


The annual general meeting of Northam shareholders will be held at Glenhove Conferencing, 52 Glenhove Road, Melrose Estate, Johannesburg, South Africa on Wednesday, 9 November 2016 at 10:00 to transact the business as stated in the notice of annual general meeting, forming part of the abridged annual report 2016 (“notice and abridged report 2016”).

No change statement

Shareholders are advised that the summarised audited financial statements for the 12 months ended 30 June 2016 as contained in the notice and abridged report 2016, will be distributed electronically to shareholders today, 30 September 2016, whilst the physical mailing process of the notice and abridged report 2016 is expected to be completed by no later than Wednesday, 5 October 2016. The audited annual financial statements 2016 contain no material modifications to the reviewed preliminary results, which were published on SENS on 26 August 2016.

The annual integrated report 2016, containing the full audited annual financial statements, and the notice and abridged report 2016, are available at www.northam.co.za or can be obtained from the company’s registered office on request.

The salient dates of the annual general meeting are as follows:

 2016
Record date to determine which shareholders are entitled to receive the notice and abridged report 2016 Friday, 16 September
Posting date of the notice and abridged report 2016 Friday, 30  September
Last day to trade in order to be eligible to attend and vote at the annual general meeting Tuesday, 1 November
Record date to determine which shareholders are entitled to attend and vote at the annual general meeting Friday, 4 November
Forms of proxy for the annual general meeting to be lodged by 10:00 on Tuesday, 8 November
Annual general meeting at 10:00 on Wednesday, 9 November
Results of annual general meeting released on SENS on Wednesday, 9 November

Johannesburg
30 September 2016

Sponsor and Debt Sponsor
One Capital

A year of consolidation for Northam

Northam Platinum has released its preliminary annual results for the year ended 30 June 2016. The statement which follows captures the key features for the year, and contains a message from chief executive Paul Dunne.


...company moving into growth phase

Johannesburg, Friday 26 August 2016. Northam Platinum has released its preliminary annual results for the year ended 30 June 2016. The statement which follows captures the key features for the year, and contains a message from chief executive Paul Dunne.

KEY FEATURES

  • Exemplary group safety performance
  • PGM production up 15.7% to 436 960 ounces
  • Group capital investment reaches the R1.2 billion mark
  • Healthy year-end cash balance of R3.1 billion
  • Normalised headline earnings of 87.1cps
  • US$ basket price 25% lower year on year
  • Booysendal South expansion approved

A WORD FROM PAUL DUNNE – CHIEF EXECUTIVE

The past year was one of consolidation for the group as we completed the restructuring and strengthening of our balance sheet and as we progressed development of the physical assets on which our corporate future is being built. Northam is moving into a growth phase, funded by significant cash holdings and internally generated cash flows. Successful project execution will be critical in the coming year.

Health and safety

Our operations completed the past financial year with no fatal accidents. In terms of providing safe working environments, the mechanised operations at Booysendal continue to be the differentiator. However, Zondereinde’s performance was exemplary and was rewarded with five million fatality-free shifts. My congratulations go to all employees who worked hard to achieve these milestones.

PGM markets

The past year has been one of the most challenging this industry has faced. Metal prices have languished at levels not seen since 2009, with platinum plummeting to USD814/oz in January this year. Some recovery has been discernible since, taking the metal to USD1 023/oz at the financial year’s end.

Palladium’s trading followed a somewhat similar pattern, with spot metal opening the financial year at USD699/oz, touching a low of USD470/oz in January and ending the year at USD589/oz.

Recent research has indicated that the current 2016 calendar year will end with an overall platinum supply deficit of 455 000oz based on forecast demand of 8.26Moz and supply of 7.80Mz. Newly-refined production is projected to fall in each of the four principal platinum producing regions – as mining firms curtail output of unprofitable ounces and deliver just shy of 6Moz into the market. Nevertheless, Northam expects platinum demand to continue to grow at a rate similar to the growth in world gross domestic product.

The operating environment

Challenges in the labour relations arena are likely to persist in the near term, even though labour relations at our two operating mines were largely stable in the wake of securing three-year wage agreements.

I believe that these agreements illustrate that competition between unions can be set aside for the overall benefit of employees. Longer-term agreements provide a platform for a stable operating environment, a fundamental tenet of our business strategy.

Civil unrest in the Steelpoort valley is not a new phenomenon, and occasionally resulted in production losses at Booysendal when passage for employees was too dangerous. We are optimistic that the task team set up to deal with community issues will generate some fresh impetus and that these concerns will be resolved.

The situation at Zondereinde was potentially more serious in early June when a mine employee was killed in the neighbouring Northam town. This was followed by the death of another employee, raising tensions on the mine and resulting in eight days’ underground production losses. This issue is still being actively managed by mine management.

My thanks, and those of the board, go to all the stakeholders who contributed to resolving the immediate situation at Zondereinde, in particular the SAPS and the Minister of Mineral Resources, Mr Mosebenzi Zwane.

Performance

The introduction of Zambezi Platinum (RF) Proprietary Limited as a 31.4% shareholder in the company, along with the capital injection it brought, have been accounted for in our financials, contributing to the healthy cash position of R3.1 billion shown on the statement of financial position at the financial year’s end. Dollar-denominated PGM prices masked the solid performances at both operations.

In line with our focus on core business activities we disposed of our 20.3% stake in the Trans Hex Group Limited, further strengthened the balance sheet by issuing medium-term notes to the value of R425 million, and welcomed the Industrial Development Corporation of South Africa Limited (IDC) as a strategic funding partner. This financial strength provides the basis for funding expansion projects that will take our annual PGM production profile to 800 000oz.

While our balance sheet is particularly strong we shall continue with our conservative approach to growth and acquisition. The massive orebody at Booysendal, along with the Everest infrastructure (now part of the Booysendal South complex), secures contiguous, lease-bound brownfields growth in an area where the capital footprint has largely already been established.

Each one of our mines has ore reserves sufficient for at least 20 years of production. We have completed the ramp-up of Booysendal UG2 North’s operations to full capacity and are carrying out deepening projects at both Zondereinde and Booysendal North. The Merensky mine at Booysendal North and development of the Booysendal South mining complex have been approved and are progressing well. We are also extending and optimising our processing capacity. The smelter expansion at Zondereinde is in progress, and due for completion towards the end of calendar year 2017. An offtake agreement with Heraeus Deutschland GmbH & Co. KG (Heraeus) has secured an investment contribution of €20 million in this R750.0 million expansion programme.

Looking ahead

Looking ahead, Northam is confident that the fundamentals of the PGM markets will reassert, giving impetus to a stronger pricing environment. The perceived threats to demand are receding and South African primary supply is under pressure from underinvestment. Northam’s investment in new production through the cycle is intended to deliver into a rising market.

Issued by

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Johannesburg
Tel +27 (0)11 880 3924

Marion Brower +27 71 493 0387
Jan Walker +27 71 493 0429
Memory Johnstone +27 72 439 5430

Solid operational performance at group mines

Northam Platinum has released its preliminary annual results for the year ended 30 June 2016. The statement which follows captures the key features for the year, and an overview of the group’s operational performance.


Revenues hit by lower metal basket prices

Johannesburg, Friday 26 August 2016. Northam Platinum has released its preliminary annual results for the year ended 30 June 2016. The statement which follows captures the key features for the year, and an overview of the group’s operational performance.

KEY FEATURES

  • Exemplary group safety performance
  • PGM production up 15.7% to 436 960 ounces
  • Group capital investment reaches the R1.2 billion mark
  • Healthy year-end cash balance of R3.1 billion
  • Normalised headline earnings of 87.1cps
  • US$ basket price 25% lower year on year
  • Booysendal South expansion approved

INTRODUCTION

The Northam group’s PGM production from own operations of 436 960oz (equivalent refined metal) was 15.7% higher year on year, following a solid operating performance at Zondereinde, and the Booysendal UG2 North mine reaching steady-state production in the first half of the financial year.

Financial results were negatively impacted by lower ZAR basket prices.

In line with the group strategy to diversify into shallow mechanisable operations the board approved the development of the initial phase of the Booysendal South project in June 2016.

This project includes the development of two UG2 mining modules and a Merensky mining module which will contribute an additional 240 000oz per annum of PGMs to the group’s production profile.

The construction of the new 20MW furnace at the Zondereinde mining complex is progressing well. In addition to adding smelter capacity, it will also reduce operational risk. The total cost of the project is anticipated to be R750.0 million, with commissioning by the end of the 2017 calendar year.

The expansion work follows on the extension of Northam’s strategic partnership with Heraeus Deutschland GmbH & Co. KG (Heraeus) and Heraeus South Africa Proprietary Limited in terms of which Heraeus has agreed to contribute €20.0 million to the construction of the furnace. The first €10.0 million was received in June 2016. The agreement also provides for the renewal of the current refining arrangements and guarantees a supply of refined metal to Heraeus.

Operations: Zondereinde

Zondereinde recorded five million fatality free shifts during the year, a commendable performance by both employees and management particularly at a deep-level mine.

With a focus on husbanding the Merensky reef at Zondereinde, modifications to the processing plant will allow for higher proportions of UG2 reef to be mined and processed and therefore the targeted UG2 : Merensky mining ratio has successfully been adjusted to 60 : 40.

A total of 815 167 Merensky reef tonnes (FY2015: 795 885 tonnes) were milled at a head grade of 5.9g/t. The higher UG2 contribution, with a lower grade at 4.2g/t had a predictable effect on the combined head grade, which came in at 4.9g/t.

Overall the Zondereinde mine’s performance was good, in spite of the constrained mining flexibility on the Merensky reef, and production of equivalent refined metal from own operations increased by 10.6% to 282 765oz.

Zondereinde’s total operating costs were R3 464.4 million (FY2015: R3 147.0 million), an increase of 10.1% based on the higher production. This resulted in an overall 1.0% decline in the unit cash cost per equivalent refined 3PGE + Aukg to R374 846/kg, demonstrating the success of tight cost control at the operation.

Capex to the value of R554.1 million was invested at Zondereinde as follows:

  • Expansionary capex of R291.6 million on the construction of the new 20MW furnace
  • R259.8 million on sustaining capex of which R132.7 was spent on the deepening project

These projects will continue into the next financial year, with expansionary and sustaining capex reaching R379.1 million and R303.6 million respectively in FY2017.

Zondereinde’s total resource estimate has increased to 84.1Moz (FY2015: 81.1Moz) with 11.7Moz (FY2015: 10.6Moz) in the reserve category. The life of mine is now estimated at more than 20 years.

Operations: Booysendal

The Booysendal mine recorded two million fatality free shifts during the year. The LTIIR was 0.44 (FY2015: 0.54).

With the mechanised mining method continuing to prove to be a significant safety differentiator, management believes the growth of the group will be based on shallower, mechanisable operations. During the year the Booysendal North UG2 mine achieved its steady state run rate of 160 000oz per annum. A total of 2 165 603 tonnes were milled at a head grade of 2.7g/t compared to 1 786 375 tonnes at a head grade of 2.6g/t in 2015.

Metals in concentrate produced at Booysendal grew by 31.7% to 161 300oz, resulting in a 29.3% increase in total operating costs. However, the cash cost per equivalent 3PGE + Au kg in concentrate was R298 500/kg, a 1.4% reduction from the prior year’s unit cost of R302 695/kg.

Capital expenditure incurred amounted to R616.4 million (FY2015: R798.8 million). The capex was spent as follows:

  • R55.2 million on the acquisition of the Everest mineral resource
  • R178.0 million spent on the UG2 phase 1 mine and deepening project
  • Employee accommodation of R14.3 million
  • R89.1 million on sustaining capital expenditure at the UG2 North mine
  • Expansionary capex of R63.5 million on the Booysendal South feasibility study

Management estimates that expansionary and sustaining capital expenditure will be R527.0 million and R86.9 million respectively in FY2017.

PROSPECTS

The global economic outlook remains uncertain, resulting in volatile metal markets and exchange rates. The group’s financial performance will depend on achieving higher metal sales prices and a stable operating performance. Cost saving and productivity improvement initiatives are in place at both Zondereinde and Booysendal. Management is confident that the group’s strong financial position, prudent financial controls and the development of shallow, mechanisable operations at Booysendal will place the group in a position to take advantage of improved market conditions going forward.

Issued by

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

Marion Brower +27 71 493 0387
Jan Walker +27 71 493 0429
Memory Johnstone +27 72 439 5430

Trading statement

Shareholders are advised that the group’s loss per share for the year ended 30 June 2016 is estimated to range between a loss of 158.60 cents per share and 132.20 cents per share and the headline loss per share is estimated to range between 152.20 cents per share and 131.90 cents per share.


Shareholders are advised that the group’s loss per share for the year ended 30 June 2016 is estimated to range between a loss of 158.60 cents per share and 132.20 cents per share and the headline loss per share is estimated to range between 152.20 cents per share and 131.90 cents per share, compared with the loss per share of 264.30 cents and headline loss per share of 202.90 cents reported for the year ended 30 June 2015. The aforementioned range expressed in percentage terms is an increase in earnings per share of between 40% and 50% and headline earnings per share of between 25% and 35%.

The anticipated loss is attributable to the higher Zambezi Platinum (RF) Limited (“Zambezi”) preference share dividends consolidated in the group’s results compared to the previous year.  In line with International Financial Reporting Standards, Zambezi’s results are consolidated into the Northam group results, as a result of it having effective control over Zambezi.  The Zambezi preference shares accrue dividends at a cumulative variable dividend of 3.5% over the prime overdraft interest rate in South Africa.    

Shareholders are reminded that 159,905,453 Northam shares are held for settlement of the Zambezi preference share liability and that the accrued dividends consolidated into the Northam results are a non-cash item for Northam.

The group’s platinum group metal production was substantially higher year on year with both Zondereinde mine and Booysendal mine recording an operating profit.  However, the group’s total operating profit was between 30% and 40% lower than the previous comparable year owing to a lower average basket price achieved.

The weighted average number of shares in issue for the year ended 30 June 2016 was 349,875,759 (F2015: 391,834,708).

The information contained in this trading statement has not been reviewed or reported on by the group’s auditors, Ernst & Young Inc.

The preliminary results for the year ended 30 June 2016 are anticipated to be released on or about 26 August 2016.

Issued by

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

Marion Brower +27 (0) 71 493 0387
Jan Walker  +27 (0)71 493 0429

Northam secures new R1.5 billion revolving credit facility

Northam is pleased to advise shareholders that it has secured a new R1.5 billion five-year revolving credit facility to replace its existing R1.0 billion revolving credit facility which matures in November 2016.


Johannesburg Thursday 4 August 2016. Northam is pleased to advise shareholders that it has secured a new R1.5 billion five-year revolving credit facility to replace its existing R1.0 billion revolving credit facility which matures in November 2016.

The new facility further strengthens Northam’s balance sheet capability in support of the group’s key strategic initiatives, including the development of the Booysendal expansion projects. Together with existing cash reserves, the new facility provides Northam with increased financial flexibility, ensuring that the group’s growth initiatives remain fully funded in the medium-term.

The salient terms of the new facility are as follows:

  • Five-year senior unsecured revolving credit facility.
  • Facility limit of R1.0 billion for the first 18 months from inception, whereafter the new facility limit automatically increases to R1.5 billion for the remainder of the five year period.
  • Voluntary prepayments and redraws are permitted.
  • Other terms, conditions and covenants are typical for a facility of this nature.

Paul Dunne, Northam’s Chief Executive Officer, said “the new and increased long-term revolving credit facility, combined with Northam’s DMTN Programme and the equity raised in our empowerment transaction with Zambezi Platinum (RF) Limited, gives the company significant long-term balance sheet certainty and flexibility. Northam is well placed to pursue its strategic growth projects and to implement sound long-term strategies.”

Issued by

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

Marion Brower +27 71 493 0387
Jan Walker +27 71 493 0429

Operations resume at Zondereinde

The management of Northam Platinum advises that underground operations at the Zondereinde mine were resumed last night, Tuesday 14 June.


Johannesburg Wednesday 15 June 2016. The management of Northam Platinum advises that underground operations at the Zondereinde mine were resumed last night, Tuesday 14 June.

Employees embarked on the night shift after Minister Zwane’s visit to the operation and after the SAPS disclosing yesterday the arrest of a number of suspects for the death of two Zondereinde employees last week.

Northam management has congratulated the SAPS on the swift success of their investigations and has committed to further assistance, if required, as the law takes its course.

Northam chief executive Paul Dunne has welcomed the resumption of operations at Zondereinde and said today, “We are grateful for Minister Zwane’s intervention in this matter and are  encouraged by the progress that the SAPS investigations has delivered in a relatively short period.”

Issued by

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

Marion Brower +27 71 493 0387
Jan Walker +27 71 493 0429

Northam management welcomes Minister Zwane’s visit

The management of Northam Platinum has welcomed Minister Zwane’s visit to the company’s Zondereinde mine in Limpopo province today, Tuesday 14 June 2016.


Swift return to work in the best interests of all

The management of Northam Platinum has welcomed Minister Zwane’s visit to the company’s Zondereinde mine in Limpopo province today, Tuesday 14 June 2016.

Minister Zwane’s second visit comes as the investigation into the death of Zondereinde employees Messrs Somaxhama and Mhlabeni gains momentum.

Northam management is encouraged by the swift progress made by the SAPS in the investigations and the way they are being dealt with.

Weekend talks between the parties continued yesterday and today. Management has again called on all parties to return to work in the shortest possible time, so that underground operations may be resumed safely and smoothly.

“A swift return to work would be in the best interests of all parties,” concluded Northam chief executive Paul Dunne.

Issued by

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

Marion Brower +27 71 493 0387
Jan Walker +27 71 493 0429

Northam issues R250 million of domestic medium term notes

Shareholders are referred to the Northam SENS announcement dated 5 February 2016, wherein shareholders were advised that the company had entered into a subscription agreement with the Industrial Development Corporation of South Africa in terms of which the IDC agreed to subscribe for R250 million three year senior unsecured floating rate notes. 


Shareholders are referred to the Northam SENS announcement dated 5 February 2016, wherein shareholders were advised that the company had entered into a subscription agreement with the Industrial Development Corporation of South Africa (“IDC”) in terms of which the IDC agreed to subscribe for R250 million three year senior unsecured floating rate notes (“notes”). 

Northam is pleased to announce that the company has successfully raised the term debt referred to above through the issue of R250 million notes under its R2 billion Domestic Medium Term Note Programme dated 3 August 2012.  The notes will attract a floating coupon rate of 11.208% (3 month JIBAR as at 8 June 2016 plus 390 bps) and will mature on 9 June 2019.
The notes will be listed today, Friday, 10 June 2016 on the Interest Rate Market of the JSE Limited. The first interest payment date will be 9 September 2016.

Johannesburg
10 June 2016

Arranger, Dealer, JSE Sponsor and Debt Sponsor
One Capital

Legal Advisor to Northam in respect of the Notes
Bowman Gilfillan Inc. 

Zondereinde mine – situation update 4

The management of Northam Platinum has thanked the minister of mineral resources, Minister Zwane for his visit to the Zondereinde mine today.


The management of Northam Platinum has thanked the minister of mineral resources, Minister Zwane for his visit to the Zondereinde mine today.

Management is appreciative of the efforts of Mr Zwane and his ministry in attempting to resolve the tensions at the Zondereinde mine near Thabazimbi. Tensions were ignited after the death of Mr Mthetheleli Somaxhama in the town of Northam (some 20km from mine property), followed on Monday 6 June by that of another Zondereinde employee, Mr Thembinkosi Mhlabeni, also in the vicinity of the mine.

In thanking Mr Zwane for his support and the leadership efforts of the DMR, Northam chief executive Paul Dunne once again extended his sympathies also to the families and colleagues of Mr Somaxhama and Mr Mhlabeni.

Mr Dunne continued, “We will continue to provide support to the authorities in tracking down the perpetrators and bringing them to justice. We will also continue our plans to support the municipality as we have done over the years with infrastructure, expertise and developments, as we strive to improve the living conditions of our employees.

“We recognized that tensions were high immediately following these tragic deaths, and for this reason temporarily suspended underground operations. But, for all of us, it is time to go back to work. If we do not we run the risk of undermining the viability of operations here at Northam.

In closing I appeal to all employees and their representatives – let us all continue to engage and let the SAPS do their work. Let us help them where we can to bring the criminals that threaten the safety of our employees and their families to book so that justice may prevail. And let us not allow these tragic incidents to bring strife and violence onto our mine. We look forward to a speedy return to work.”

Johannesburg
9 June 2016

Issued by

Russell & Associates
Johannesburg
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Marion Brower +27 71 493 0387
Jan Walker +27 71 493 0429

Listing of a new financial instrument – NHM003

The JSE Limited has granted approval for the listing of NHM003 Senior Unsecured Floating Rate Notes, under the Northam Platinum Limited ZAR 2 000 000 000 Domestic Medium Term Note Programme dated 3 August 2012, with effect from 10 June 2016.


The JSE Limited has granted approval for the listing of NHM003 Senior Unsecured Floating Rate Notes, under the Northam Platinum Limited ZAR 2 000 000 000 Domestic Medium Term Note Programme dated 3 August 2012, with effect from 10 June 2016.

Instrument code: NHM003
Nominal Issued: ZAR 250 000 000
Issue price: 100%
Interest Rate: 11.208% (3 Month Jibar as at 8 June 2016 of 7.308% plus 390bps)
Coupon Rate Indicator: Floating
Issue date: 10 June 2016
Interest Commencement Date: 10 June 2016
Maturity date: 9 June 2019
Last day to trade: By 17:00 on 29 August, 28 November, 26 February and 29 May each year until the Maturity Date
Books Close: 30 August, 29 November, 27 February and 30 May each year until the Maturity Date
Interest Payment Dates: 9 September, 9 December, 9 March and 9 June each year until the Maturity Date
First Interest Payment Date: 9 September 2016
Interest Reset Dates: 9 March, 9 June, 9 September and 9 December each year until the Maturity Date
ISIN: ZAG000129032
Business Day Convention: Modified following
Dealer: One Capital

The Notes will be immobilised in the Central Depository (CSD) and settlement will take place electronically in terms of JSE Rules.

9 June 2016

Debt Sponsor
One Capital

Legal Advisor to Northam in respect of the Notes
Bowman Gilfillan Inc.