Announcements 2013

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

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

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

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

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.

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

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

Shareholders are informed that energy intensity at the Zondereinde mine smelter has been reduced from a maximum of 12 megawatts to a current average of 8 megawatts.

This reduction has been implemented to accommodate a series of ultrasonic and chemical tests to determine the extent of possible erosion of the refractory bricks comprising the walls of the smelter.

These tests will necessitate a reduction in the volume of concentrate treated in the smelter. Receipt of concentrate produced by Platmin Limited has been temporarily suspended. Captive concentrate produced in excess of the reduced capacity of the smelter will if necessary be treated at smelters operated by others on a toll basis.

Shareholders will be informed of the results of the tests as soon as they become available.

Johannesburg
16 May 2013

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

Northam management confirms that drilling operations resumed at Zondereinde this morning Tuesday, 23 April 2013. This follows an agreement between management and the National Union of Mineworkers (NUM) yesterday, Monday, 22 April 2013.

A Memorandum of Understanding signed between the two parties provides for the payment of ‘return to work’ compensation comprising a once off ex gratia payment equivalent to 50% of their basic wages for the duration of the strike period and R2 000.

Total production losses amount to 16 000oz 3PGE+Au with a current value of approximately R192 million.

Johannesburg
23 April 2013

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

Northam advises that the unprotected work stoppage at the company’s Zondereinde mine continued today, Monday 15 April 2013.

In an effort to resolve the impasse with striking rock drill operators, management has continued to engage with representatives of the National Union of Mineworkers (NUM) at national and regional level. The parties and the union have agreed on a review of the application of the mine’s productivity bonus system.

In terms of a Labour Court interdict the current work stoppage at Zondereinde is unprotected. Employees are urged to return to work, and to engage through the established and agreed dispute resolution procedures. Employees have been reminded that failure to heed the terms of the interdict could lead to dismissals.

To date, Northam has lost around 10 600 ounces of 3PGM + Au and around R122.1 million in revenues.

Shareholders will be kept informed of further developments.

Johannesburg
15 April 2013

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

Further to the notice to shareholders issued on Friday 5 April 2013, Northam advises that striking rock drill operators at Zondereinde have failed to resume their duties in spite of an ultimatum issued to them before close of business on Monday 8 April 2013. The company will now follow due process which could result in the dismissal of the affected employees.

The protracted interruption in drilling operations has a detrimental effect on underground working conditions, which could pose a safety risk, and which will deteriorate further if normal operations are not resumed expeditiously. A total of 165kg (5 300 ounces) of metal in concentrate has now been lost, with revenue losses amounting to R62.7 million.

Shareholders will be kept informed of further developments.

Johannesburg
9 April 2013

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

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

JIBAR rates as at 4 March 2013: 3 Month 5.100%

*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.

6 March 2013

Debt Sponsor
One Capital

Shareholders are advised that the group’s earnings and headline earnings per share for the six months ended 31 December 2012 are estimated to be between 30% and 45% lower than in the previous comparable period. Earnings per share of 51.8 cents and headline earnings per share of 51.9 cents were reported for the six months ended 31 December 2011.

The anticipated decline in earnings reflects the finance costs incurred on borrowings and a higher effective tax charge during the period under review. Operating profit for the six months ended 31 December 2012 is expected to be higher than for the period ended 31 December 2011.

The weighted average number of shares in issue for the period ended 31 December 2012 was 382 536 125, compared to 382 416 190 shares in issue for the period ended 31 December 2011.

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

It is anticipated that the interim results for the six months ended 31 December 2012 will be released on or about 22 February 2013.

Johannesburg
5 February 2013

Sponsor:
One Capital