Announcements 2018

Northam secures R2 billion of additional funding capacity for growth initiatives and an update regarding the second furnace at Zondereinde

Northam is pleased to advise shareholders that it has secured a new R1 billion two-year unsecured revolving credit facility (“New R1bn RCF”), which matures in April 2020.


Additional R1 billion revolving credit facility

Northam is pleased to advise shareholders that it has secured a new R1 billion two-year unsecured revolving credit facility (“New R1bn RCF”), which matures in April 2020. This facility is in addition to Northam’s existing R2 billion unsecured revolving credit facility (“R2bn RCF”), which matures in November 2021, and increases Northam’s total revolving credit facilities to R3 billion up until April 2020. The New R1bn RCF will accrue interest at the same rate as the R2bn RCF (variable rate of JIBAR plus a margin of 3.3%).

R1 billion fixed rate Domestic Medium Term Notes placement

Northam announced the issue of a R450 million tranche and a R550 million tranche of one-year senior unsecured fixed rate notes (“Notes”) on 19 April 2018 and 17 May 2018, respectively. The cumulative R1 billion of Notes were issued under Northam’s R2 billion Domestic Medium Term Note Programme and attract a fixed coupon of 11% per annum, compounded annually. Interest on the Notes is payable upon redemption.

Rationale for and application of the additional funding

During the past 12 months Northam has completed the construction and commissioning of its second furnace at Zondereinde (at a capital cost of approximately R1 billion); settled its purchase price commitments pertaining to the acquisition of the Tumela resource, the Eland mine and the recycling assets in the USA; accelerated certain capital growth projects; and made significant progress with the development and construction of its new Booysendal South mine. The combined funding requirement in respect of the aforementioned was well in excess of R3 billion. During this period a significant surplus concentrate stockpile, with an approximate value of R2 billion, was built up at Zondereinde in anticipation of commissioning the second furnace. Processing of this stockpile at the second furnace is currently underway and the working capital lock-up is expected to be released during financial year 2019.

A significant new purchase of concentrate agreement has been entered into with a third party and processing of this concentrate has already commenced.

A portion of the proceeds from the Notes has been used to repay previous drawdowns under the R2bn RCF and the New R1bn RCF remains undrawn. In view of the successful commissioning of the furnace and the ongoing working capital release from the concentrate stockpile, Northam opted to place the Notes for a one-year term only.

As at 30 April 2018, Northam’s net debt position amounted to approximately R2.5 billion, comprising R875 million of domestic medium term notes in issue and a net drawdown of approximately R1.6 billion on the R2bn RCF. The Notes issued on 17 May 2018 will have no impact on the net debt position and the proceeds from this issue have been paid into the R2bn RCF.

The addition of the New R1bn RCF is intended to right-size Northam’s standby facilities from R2 billion to R3 billion during a capital intensive development period at the Booysendal South mine whilst releasing value locked in the stockpile and, following that, to maintain a prudent level of standby facilities, taking into account Northam’s significantly enlarged operational footprint.

Update on the second furnace at Zondereinde

Ramp-up of the newly commissioned second furnace is progressing as planned with concentrate feed currently averaging approximating 400 tonnes per day at 13.5 MW. Northam is on track to complete processing of the surplus stockpile in financial year 2019, taking into account the additional concentrate purchased.

Paul Dunne, Northam’s Chief Executive Officer, said “the additional R2 billion funding flexibility addresses our investment in the concentrate stockpile during this capital intensive period for the Booysendal South project. The increased RCF also provides additional medium-term flexibility to take advantage of further potential opportunities Which may arise in the PGM sector.”

Johannesburg
23 May 2018

Corporate Advisor and JSE Sponsor to Northam
One Capital

Attorneys to Northam
Cliffe Dekker Hofmeyr Inc.

Arranger, Dealer and Debt Sponsor to Northam in respect of the Notes
One Capital

Legal Advisors to Northam, Arranger and Dealer in respect of the Notes
Bowman Gilfillan Inc.

Mandated Lead Arranger, Original Lender and Facility Agent in respect of the RCF
Nedbank Limited (acting through its Corporate and Investment Banking division)

Read more

Listing of new financial instrument – NHM005

The JSE Limited has granted approval for the listing of NHM005 Senior Unsecured Fixed Rate Notes, under the Northam Platinum Limited ZAR2 000 000 000 Domestic Medium Term Note Programme dated 3 August 2012 (“Programme”), as guaranteed by Booysendal Platinum Proprietary Limited, with effect from 18 May 2018.


The JSE Limited has granted approval for the listing of NHM005 Senior Unsecured Fixed Rate Notes, under the Northam Platinum Limited ZAR2 000 000 000 Domestic Medium Term Note Programme dated 3 August 2012 (“Programme”), as guaranteed by Booysendal Platinum Proprietary Limited, with effect from 18 May 2018.

Instrument Type: Senior Unsecured Fixed Rate Notes
Total Notes in Issue: ZAR1 425 000 000.00 including this issue
Instrument Code: NHM005
Nominal Amount: ZAR550 000 000.00
Issue Price: 100%
Interest Rate: 11% percent per annum payable annually
Coupon Rate Indicator: Fixed
Issue Date: 18 May 2018
Interest Commencement Date: 18 May 2018
Maturity date: 18 May 2019
Final Redemption Amount: 100% of Nominal Amount
Last day to Register: By 17:00 on 7 May 2019
Books Close: 8 May 2019
Interest Payment Dates: 18 May 2019
ISIN No: ZAG000151242
Business Day Convention: Modified following Business Day
Other: The pricing supplement does not contain additional terms and conditions or changes to the terms and conditions as contained in the Programme
Summary of additional terms: Not Applicable

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

Johannesburg
17 May 2018

Arranger, Dealer and Debt Sponsor
One Capital

Attorneys to Northam in respect of the Notes
Bowman Gilfillan Inc.

Read more

Interest payment notification

Northam bondholders are advised of the following interest payment due on Monday, 14 May 2018.


Northam bondholders are advised of the following interest payment due on Monday, 14 May 2018:

Bond Code NHM002
ISIN No ZAG000129024
Coupon 13.5% per annum
Interest Period 12 November 2017 to 11 May 2018
Interest Amount Due R11,812,500.00
Payment Date 14 May 2018
Date Convention Modified Following Business Day


09 May 2018

Debt Sponsor
One Capital

Read more

Listing of new financial instrument – NHM004

The JSE Limited has granted approval for the listing of NHM004 Senior Unsecured Fixed Rate Notes, under the Northam Platinum Limited ZAR2 000 000 000 Domestic Medium Term Note Programme dated 3 August 2012 (“Programme”), as guaranteed by Booysendal Platinum Proprietary Limited, with effect from 20 April 2018.


The JSE Limited has granted approval for the listing of NHM004 Senior Unsecured Fixed Rate Notes, under the Northam Platinum Limited ZAR2 000 000 000 Domestic Medium Term Note Programme dated 3 August 2012 (“Programme”), as guaranteed by Booysendal Platinum Proprietary Limited, with effect from 20 April 2018.

Instrument Type: Senior Unsecured Fixed Rate Notes
Total Notes in Issue: ZAR875 000 000.00 including this issue
Instrument Code: NHM004
Nominal Amount: ZAR450 000 000.00
Issue Price: 100%
Interest Rate: 11% percent per annum payable annually:
Coupon Rate Indicator: Fixed
Issue Date: 20 April 2018
Interest Commencement Date: 20 April 2018
Maturity date: 20 April 2018
Final Redemption Amount: 100% of Nominal Amount
Last day to Register: By 17:00 on 9 April 2019
Books Close: 10 April 2019
Interest Payment Dates: 20 April 2019
ISIN No: ZAG000150764
Business Day Convention: Modified following Business Day
Other: The pricing supplement does not contain additional terms and conditions or changes to the terms and conditions as contained in the Programme
Summary of additional terms: Not Applicable

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

Johannesburg
19 April 2018

Arranger, Dealer and Debt Sponsor
One Capital

Attorneys to Northam in respect of the Notes
Bowman Gilfillan Inc.

Read more

Murray & Roberts Cementation Limited (“MRC”) work stoppage at Northam’s Booysendal north mine (“Booysendal”)

Northam shareholders are referred to the announcement published on SENS on 27 March 2018 relating to the unprotected work stoppage of approximately 750 MRC employees at the Booysendal mine from Monday night, 26 March 2018.


Northam shareholders are referred to the announcement published on SENS on 27 March 2018 relating to the unprotected work stoppage of approximately 750 MRC employees at the Booysendal mine from Monday night, 26 March 2018.

Northam is pleased to announce that an agreement has been reached with the Association of Mineworkers and Construction Union (AMCU), the representative union, for a full return to work by the affected MRC employees, beginning with the morning shift of 4 April 2018.

Booysendal will transition to owner-operator status on 1 May 2018.

Johannesburg
4 April 2018

Sponsor and Debt Sponsor
One Capital

Read more

Dealings in securities

In compliance with paragraphs 3.63 to 3.66 of the JSE Limited (“JSE”) Listings Requirements, Northam advises its shareholders of the following dealings in shares by a director of a major subsidiary of the company.


In compliance with paragraphs 3.63 to 3.66 of the JSE Limited (“JSE”) Listings Requirements, Northam advises its shareholders of the following dealings in shares by a director of a major subsidiary of the company:

Name of director of major subsidiary Mr LC van Schalkwyk
Name of associate Mrs C van Schalkwyk
Relationship with director Wife of Mr van Schalkwyk
Name of major subsidiary Booysendal Platinum Proprietary Limited
Nature and extent of director’s interest Indirect beneficial
Class of shares Ordinary shares
Transactions completed on market Yes
   
Transaction 1  
Date of transaction 26 March 2018
Nature of transaction Indirect purchase of shares
Price per ordinary share R38.00
Total number of ordinary shares 18 386
Value of transaction R698 668.00
   
Transaction 2  
Date of transaction 26 March 2018
Nature of transaction Indirect sale of shares
Price per ordinary share Various different trades with the following price information:
- volume weighted average price of R37.5021;
- highest price of R37.53; and
- lowest price of R37.50
Total number of ordinary shares 70 915
Value of transaction R2 659 462.17
   
Transaction 3  
Date of transaction 27 March 2018
Nature of transaction Indirect purchase of shares
Price per ordinary share R37.50
Total number of ordinary shares 60 000
Value of transaction R2 250 000.00

Johannesburg
29 March 2018

Sponsor and Debt Sponsor
One Capital

Read more

Murray & Roberts Cementation Limited (MRC) work stoppage at Northam’s Booysendal North mine (Booysendal)

Northam confirms that approximately 750 employees at the Booysendal mine in Mpumalanga Province, embarked on an unprotected work stoppage with effect from Monday night, 26 March 2018.


Northam confirms that approximately 750 employees at the Booysendal mine in Mpumalanga Province, embarked on an unprotected work stoppage with effect from Monday night, 26 March 2018.

The MRC employees had been approached by Northam to become full-time employees in a move for Booysendal to become an owner-operating mine, which will result in them becoming permanent Northam employees. The affected employees are demanding end-of- contract termination packages from MRC.

Both MRC and the Association of Mineworkers and Construction Union (AMCU), the representative union, have been in consultation with the affected employees. MRC has applied for an urgent interdict to effect a return to work.

Shareholders will be kept informed of further developments.

Issued by
R&A Strategic Communications
Johannesburg
Tel: +27 (0)11 880 3924
Marion Brower: +27 71 493 0387
Jan Walker: +27 71 493 0429

Johannesburg
27 March 2018

Read more

Dealings in securities

In terms of the Northam broad-based economic empowerment transaction implemented on 18 May 2015, Zambezi Platinum holds ordinary shares in Northam. Pursuant to the preference share terms, Zambezi Platinum is entitled to elect to settle the preference share redemption amount in cash, Northam ordinary shares or a combination thereof.


Purchase of Zambezi Platinum (RF) Limited (“Zambezi Platinum”) preference shares (“preference shares”)

In terms of the Northam broad-based economic empowerment transaction implemented on 18 May 2015, Zambezi Platinum holds ordinary shares in Northam. Pursuant to the preference share terms, Zambezi Platinum is entitled to elect to settle the preference share redemption amount in cash, Northam ordinary shares or a combination thereof.

Accordingly, in compliance with paragraphs 3.63 to 3.66 of the JSE Listings Requirements (“Listings Requirements”), Northam advises its shareholders of the following dealings by a director and chairman of the company and of Zambezi Platinum:

Name of director Mr K B Mosehla
Name of associate Adelaide Trust
Relationship with director Trustee
Date of transaction 12 March 2018
Nature of transaction Indirect purchase of preference shares
Class of shares Preference shares
Price per ordinary share Various different trades with the following price information:
- volume weighted average price of R59.92;
- highest price of R60.00; and
- lowest price of R58.67
Total number of ordinary shares 17 200 preference shares
Value of transaction R1 030 615.47
Nature and extent of director’s interest Indirect beneficial interest in Zambezi Platinum resulting in an indirect exposure to Northam ordinary shares
Transaction completed on market Yes
Clearance obtained in terms of paragraph 3.66 of the Listings Requirements Yes

Johannesburg
13 March 2018

Sponsor and Debt Sponsor
One Capital

Read more

Interest payment notification

Northam bondholders are advised of the following interest payment due on Friday, 9 March 2018.


Northam bondholders are advised of the following interest payment due on Friday, 9 March 2018:

Bond Code NHM003
ISIN No ZAG000129032
Coupon 11.025%
Interest Period 11 December 2017 to 8 March 2018
Interest Amount Due R6 645 205.48
Payment Date 9 March 2018
Date Convention Modified Following Business Day


06 March 2018

Debt Sponsor
One Capital

Read more

Sustained progress and steady performance at Northam

Northam Platinum today issued results for the first half-year of the 2018 financial year.


Johannesburg, Friday, 23 February 2018. Northam Platinum today issued results for the first half-year of the 2018 financial year.

KEY FEATURES

  • Group LTIIR improved by 15.8% to 1.01
  • Steady operational progress
  • Equivalent 4E refined metal from own operations up 4.7%% to 246 473oz
  • Revenue increased by 3.1% to R26 516/Pt oz sold
  • Unit cash costs well contained at R20 851/Pt oz
  • Execution of growth strategy on track – capex at R2.6 billion
  • New 20MW furnace commissioned
  • Booysendal South absorbed R940 million capex
  • Tumela transaction concluded for consideration of R1.0 billion

Financial overview

Refined metal production from group operations increased to 246 473oz (H1 F2017: 235 375oz), pointing to a sound operational effort at the group’s operations.

Sales volumes in the period were lower, reflecting the continued build-up of inventory ahead of the commissioning of the new furnace at the Zondereinde metallurgical complex. The lower volumes, along with a stronger South African currency (ZAR13.43/USD cf to H1 F2017: R13.99/USD) over the period, had a predictable effect on sales revenues, which dropped marginally to R3.4 billion (H1 F2017: R3.5 billion).

Despite significant US dollar price increases for palladium and rhodium, revenue from platinum, which constitutes approximately 60% of the production basket, dropped by 17.8%, resulting in a lower average market price achieved.

Operating costs for mining and concentrating increased by 10.6% to R2.4 billion (H1 F2017: R2.2 billion) and 12.1% to R347.0 million (H1 F2017: R309.6 million) respectively, owing to labour and power cost increases and the expenditure associated with commissioning the dense media separation (DMS) plant at Booysendal mine.

The group operating profit was down by 3.8% to R338.8 million, with the operating margin largely unchanged from the previous period at 10.1% (H1 F2017: 10.2%).

Operating cash flows were negative to the value of R562.7 million (H1 F2017: positive R216.4 million) owing to the high inventory levels and prepayments resulting in higher working capital requirements. The high level of inventory is expected to normalise during H2 F2018 given the recent commissioning of the new furnace as concentrate is processed through this new facility.

Cash utilised in investing activities rose by 181.6% to R2.2 billion (H1 F2017: R778.0 million) reflecting the intensity of the group’s capital expenditure programme as production is expanded in line with the growth strategy. The major spend has been on the new 20MW furnace at Zondereinde, which is now complete and commissioned, the acquisition of the Tumela block and the development of Booysendal South mine.

Group performance

Milled tonnages from the combined operations increased by 3.7% to 2.3 million tonnes. Both Zondereinde and Booysendal contributed to the increase and the 4.7% improvement in PGM production to 246 000 ounces. Purchased metal also picked up year on year to 30 000 ounces with two additional long term customers secured. “We intend to grow our third party smelting business over the next year or two,” said CEO Paul Dunne, “thereby taking advantage of the increase in furnace capacity.”

The smelter constraints continued to impact refined metal production, which was lower by 9% at 212 000oz. Refined metal production is expected to increase significantly in the second half.

The production of chrome concentrate increased by 10% to 311 000 tonnes in line with the higher UG2 tonnages milled at both operations. This is an important revenue stream for Northam.

Zondereinde operations

Year-on-year tonnages at Zondereinde were largely unchanged at 1 136 541 tonnes with the UG2’s contribution 10.2% higher at 673 042 tonnes, and the Merensky tonnages 9.6% lower at 463 499 tonnes. With the increase in the higher grade P2 reef mined, the Merensky head grade increased to 6.1g/t. Equivalent refined metal production was 5.7% higher at 152 487oz. Third party concentrate added 4E equivalent metal of 27 561oz (H1 F2017: 14 179oz) to on-mine production.

Zondereinde continues to be impacted by the constrained availability of Merensky reef. The Tumela block is expected to improve the availability of Merensky mining face over the next two years as new reserves are established.

With plans being put in place to access and develop the Tumela block, the permanent workforce has been increased by 6%. The combination of higher costs and volumes translated into a 9.0% increase in unit cash costs per equivalent refined platinum ounce to R21 775/oz (H1: F2017 R19 980/oz).

With a significant increase in metal inventory Zondereinde’s operating profit fell to R155 million. “We believe,” commented Northam’s Dunne, “that Zondereinde remains in a competitive cost position.”

The on-mine capital expenditure for the year was R1.4 billion which included the R1.0 billion payment for the Tumela resource. R94 million was spent on sustaining capex. Forecast capex for the remainder of the financial year is R162 million for expansion capex and R205 million for sustaining capex.

Zondereinde’s total resource estimate increased to 102.59 million oz (Moz) (F2017: 83.98Moz), owing to the inclusion of the Tumela block resources acquired.

Booysendal operations

Tonnages from the UG2 mine declined by 1.8% to 1 190 215 tonnes milled (H1 F2017: 1 212 281 tonnes) at a constant head grade of 2.7 g/t. Given some teething problems associated with the start-up of the DMS plant, the overall plant recovery declined. Operating the DMS will enable the processing of higher mined tonnages with a marginal overall recovery sacrifice.

Chrome produced for the current period was 144 382 tonnes (H1 F2017: 138 635 tonnes), a 4.1% increase, while metal in concentrate dropped marginally to 98 900oz.

Booysendal operating costs increased by 5.8% to R1.0 billion (H1 F2017: R948.8 million). The cash cost per equivalent 4Eoz in concentrate is R9 938 (H1 F2017: R9 218). This equates to a cash cost per platinum oz of R16 459/oz (H1 F2017: R15 271/oz), an increase of 7.8%.

Capital expenditure at Booysendal reached R1.2 billion for the period (H1 F2017: R330.0 million) with R1.1 billion on project expenditure and R25.2 million on sustaining expenditure. In addition, R140.2 million was prepaid for the construction of the aerial rope conveyor system. The estimated expansionary and sustaining capital expenditure for the remainder of F2018 will be R690.7 million and R72.0 million respectively.

Issued by
R&A Strategic Communications
Johannesburg
Tel +27 (0)11 880 3924
Marion Brower +27 71 493 0387
Jan Walker +27 71 493 0429

Read more

Subcategories