Announcements 2014

Independent analysis of global supply, demand and above ground stocks of platinum

London, 3 December 2014: The World Platinum Investment Council (WPIC) today announces the launch of Platinum Quarterly - the first independent, freely-available, quarterly analysis of the global platinum market. This inaugural Platinum Quarterly incorporates analysis of annual platinum supply and demand for 2013 and 2014. Importantly, the first analysis of quarterly supply and demand (Q3 2014) and an estimate of global above ground stocks of platinum are also presented.

Commissioned by WPIC, the Platinum Quarterly is based upon independent research and detailed analysis conducted by SFA (Oxford).

Overview of key data presented in the first Platinum Quarterly:

Total global supply of platinum is expected to be 7.1 million ounces in 2014 (9% lower year-on-year), heavily impacted by the unprecedented South African mining strike.

• Total global annual supply from mining is expected to be 13% below 2013 levels by year-end 2014, largely attributable to the five-month mining strike in South Africa.
• Global refined platinum production from mining is expected to be 22% lower in 2014. However, during the five-month industrial action, South African producers sold some metal to customers from working inventories.
• Global platinum supply from recycling in 2014 is estimated to be 2% higher, or 40 thousand ounces more, than in 2013.

Total global demand for platinum in 2014 is expected to be 6% lower than in 2013 at 8 million ounces, as a decline in investment demand offsets growth in automotive and jewellery demand.

• The two largest sources of demand are both forecast to grow in 2014.
• In 2014, demand from the automotive industry is expected to expand by 5%, or 145 thousand ounces, as platinum is already benefitting from Euro VI-compliant vehicles being manufactured.
• Global jewellery demand in 2014 is expected to continue to grow, with an additional 115 thousand ounces of demand forecast (c. +4%). Overall purchasing in China remains robust and platinum continues to make important inroads into the newer, Indian market.
• The forecast year-on-year reduction in annual global investment demand of 82%, primarily reflects the exceptional demand for Exchange Traded Fund products (ETFs) recorded in 2013.

The expected twelve-month balance of supply and demand, a shortfall of 885 thousand ounces for 2014, will place the platinum market in deficit for the third consecutive year.

• The 2014 global platinum shortfall of 885,000 oz is 27% more than the 2013 shortfall of 695,000 oz.
• The inaugural analysis of supply and demand in Q3 2014 reveals that supply exceeded demand by 155,000 oz due to low seasonal Q3 automotive demand, a reduction in investment holdings and production increases following strike resolution.

Above ground stocks, the year-end estimate of cumulative platinum holdings unrelated to measured demand segments, are forecast at 2.56 million ounces at the end of 2014.

• The last two annual platinum shortfalls have reduced above ground stocks from their level of 4.14 million ounces at the end of 2012.

Paul Wilson, chief executive officer of WPIC commented:
“One of our key objectives is to introduce greater transparency to the market. Today’s report shows that the fundamentals of the industry have become tighter. Demand has exceeded supply in each of the last three years. As a result above ground stocks have declined significantly. The markedly different profile in the 2014 third quarter analysis highlights the value of more frequent scrutiny of actual performance, and reflects seasonality as well as some investment outflows.”

The Platinum Quarterly will deliver regular and consistently presented data to the global platinum market, helping potential investors in platinum distinguish seasonal and exceptional factors from secular trends. As the data series builds, WPIC’s aim is to bring greater clarity to all participants in the platinum market and further reinforce the case for platinum as a viable long-term investment asset.

To download the first Platinum Quarterly and/or subscribe to receive it in the future, please visit our website: www.platinuminvestment.com

For any media requests, please contact Capital MSL:

Simon Evans
+44 (0) 20 3219 8809
simon.evans@capitalmsl.com

Notes to Editors:

About World Platinum Investment Council

The World Platinum Investment Council (WPIC) is a global market authority on physical platinum investment, formed to meet the growing investor demand for objective and reliable platinum market intelligence. WPIC’s mission is to stimulate global investor demand for physical platinum through both actionable insights and targeted product development.

WPIC was created in 2014 by the six leading platinum producers in South Africa: Anglo American Platinum Ltd, Aquarius Platinum Ltd, Impala Platinum Holdings Ltd, Lonmin plc, Northam Platinum Ltd and Royal Bafokeng Platinum Ltd.

For further information, please visit: www.platinuminvestment.com

About SFA (Oxford)

Founded in 2001, SFA (Oxford) is regarded as one of the most important independent authorities on the platinum group metals market. The company’s in-depth market research and integrity is underpinned by extensive consulting from mine to market to recycler, as well as an unrivalled global industry network.

SFA have a team of eleven dedicated PGM analysts with wide and varied industry expertise and knowledge, each one specialising in a core area of the value chain, as well as many internationally-based associates. SFA is able to provide its clients with answers to the most difficult questions affecting the future of the industry.

For more information go to: https://www.sfa-oxford.com

About Platinum

Platinum is one of the rarest metals in the world with distinctive qualities making it highly valued across a number of diverse demand segments. Platinum’s unique physical and catalytic propertieshave established its value in industrial applications. At the same time, its unique precious metal attributes have made it the premier jewellery metal.

Platinum’s supply comes from two main sources: primary mining output, and recycling, which typically comes from end of life auto catalysts and jewellery recycling. Over the last five years, between 72% and 77% of total annual platinum supply (in refined ounces) has come from primary mining output.

Global demand for platinum is growing and becoming more diverse. There are four core segments of platinum demand: automotive, industrial, jewellery and investment demand.

Platinum demand from autocatalysts has equated to between 37% and 41% of total demand in the last five years. Platinum’s diverse other industrial uses account on average for a little under 20% of total global demand (five year average). Over the same period, global annual jewellery demand has averaged 34% of total platinum demand. Investment is the smallest category of platinum demand and also the most variable over the past five years, ranging between 2% and 11% of total demand.

Northam shareholders are advised that at the annual general meeting of shareholders held on Wednesday, 5 November 2014, the ordinary and special resolutions, as set out in the notice of AGM dated 1 October 2014, were approved by the requisite majority of shareholders present or represented by proxy thereat, with the exception of special resolution no.3 (general authority to repurchase issued shares).

The required special resolutions will be lodged with the Companies and Intellectual Property Commission in due course.

The total number of Northam shares eligible to vote at the AGM is 397 586 090. The number of shares voted in person or by proxy was 348 076 861 representing 87.55% of the total issued share capital of the company.

All resolutions proposed at the AGM, together with the percentage of shares abstained, as well as the percentage of votes carried for and against each resolution, are as follows:

Notes

• Percentages of shares voted are calculated in relation to the total issued share capital of Northam
• Percentage of shares for and against are calculated in relation to the total number of shares voted at the AGM
• Abstentions are calculated as a percentage in relation to the total issued share capital of Northam

Johannesburg
6 November 2014

Sponsor and Debt Sponsor
One Capital

Notice of annual general meeting

The annual general meeting of Northam shareholders will be held in Room HB1, Hackle Brooke, 110 Conrad Drive, corner Jan Smuts Avenue and Conrad Drive, Craighall, Johannesburg, South Africa on Wednesday, 5 November 2014 at 10h00 to transact the business as stated in the notice of annual general meeting, forming part of the abridged annual report 2014 (“notice and abridged report 2014”).

No change statement

Shareholders are advised that the summarised audited financial statements for the 12 months ended 30 June 2014 as contained in the notice and abridged report 2014, will be distributed electronically to shareholders today, 1 October 2014, whilst the physical mailing process of the notice and abridged report 2014 is likely to be delayed by several weeks due to ongoing industrial action by employees of the South African Post Office. The audited annual financial statements 2014 contain no material modifications to the reviewed preliminary results, which were published on SENS on 14 August 2014.

The annual integrated report 2014 containing the full audited annual financial statements, and the notice and abridged report 2014, 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:

Johannesburg
1 October 2014

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

The company’s results for the 2014 financial year were released on SENS this morning and posted to shareholders today, 14 August 2014.

• Reviewed preliminary results for the year ended 30 June 2014 (PDF - 107KB)
  • Presentation: Results for the year ended 30 June 2014
  • Webcast
  • Dial-in details...

Key features of the year

FINANCIAL PERFORMANCE

• Earnings decline by 98.2% to 2.4cps
• 93.4% drop in operating profit to R61.5 million
• Taxation declines from R169.1 million to R26.2 million
• Increased borrowings drive financing costs higher
• Balance sheet strengthened by R1 billion

ZONDEREINDE MINE

• Smelter rebuilt and successfully recommissioned
• Wage deal of between 7.5 and 9.5% reached after 11-week strike
• Fourth quarter recovery

BOOYSENDAL MINE

• Ramp-up continues
• Good safety performance
• Reduction in capex reflects conclusion of construction and development phase

Introduction

Incoming chief executive Paul Dunne paid tribute to his predecessor Glyn Lewis’s contribution to the company and its fortunes. “With Glyn’s determination, Booysendal has been successfully constructed and commissioned. The company’s second PGM mine on the eastern limb, now in full ramp-up stage, has transformed Northam, adding to its production profile, reducing the company’s operational risk and enhancing its optionality.” He added, “the company I joined is in good shape – both in terms of its assets and its people.”

Financial results

The group’s financial performance was dominated by the effects of the 11-week strike at the Zondereinde operation: revenue losses reached the R750 million level before a settlement was reached on 29 January 2014. In spite of the lower production volumes from Zondereinde, sales volumes were supplemented by Booysendal’s contribution and also from a release of inventory. The higher volumes, combined with the effects of a higher rand metal basket price drove sales revenues higher to R5.3 billion (F2014: R4.4 billion), thereby compensating marginally for the moribund US dollar PGM prices.

A 38.4% increase in cost of sales reflects the higher operating costs, increases in refining and related costs, along with a substantially higher depreciation charge, associated with the inclusion, for the first time, of costs relating to the Booysendal mine.

The net taxation charge of the group fell by 84.5% to R26.2 million (F2013: R169.1 million). A marginal profit of R19.6 million was earned for the year – resulting in earnings per share of 2.4 cents (F2013: 132.0 cents).

Financing arrangements

In a balance sheet strengthening exercise in the first half of the financial year the group successfully raised a total of R1 billion in additional cash and financing facilities through a R600 million claw back rights offer underwritten by Coronation Asset Management Proprietary Limited, and a R400 million additional revolving credit facility. R120 million was also raised through a tap issue on the domestic medium term notes programme during the year.

Zondereinde mine – operating performance

Safety statistics indicate a drop in the total number of injuries year on year, reflecting the fewer shifts worked owing to the industrial action.  The ‘making safe’ of workplaces was the most urgent priority at the start-up of operations after 21 January. Safety officers intensified on-the-job training activities and management carried out due diligence in declaring working areas safe.  Safety personnel, in consultation with other service departments, assisted mining crews to ensure that workplaces which had not been operational for the duration of the strike were subjected to thorough risk assessments. Risks were duly scrutinised and recorded, and remedial action plans were prioritised and executed.

The strike seriously affected production at Zondereinde. After the strike it took some three months before normalized production levels were resumed. By the end of the financial year production had improved considerably.  The effect of the strike on production was marked by a drop of 18.9%.  However, PGM sales were down by a lesser extent, or 8.2% at 9 827kg. Unit costs were abnormally high, skewed by the lower production volumes.  Capex for the year came in at R351 million, allocated mainly to the smelter rebuild, the deepening project and hostel conversion programme.

The smelter was rebuilt and successfully recommissioned thereafter at a cost of R54.0 million. The facility is operating normally.

Progress on ore reserve development in the north west quadrant of the mine and the deepening project was curtailed during the strike. Following a slow restart, these activities are progressing satisfactorily.

In the absence of further disruptions, Zondereinde mine’s production in the year ahead should be at normalized levels, while costs will continue to reflect the inflationary effects of higher wages and electricity tariffs and the weaker rand.  Capex in the coming year is forecast at R331 million.  The deepening project should absorb approximately R105 million, with the balance allocated to routine capex items, including R28 million for an autoclave replacement and a further R42 million for the hostel conversion programme.

Booysendal mine

The group’s new mechanized mine on the eastern limb continues to ramp up to steady state, anticipated by the end of 2015. The mine posted an operating loss for the year, but is anticipated to make a positive contribution in F2015.

At R539.6 million, capital expenditure was significantly lower than the previous year, given the near-completion of the construction and development work.  Forecast capital expenditure in F2015 is expected to be R483.4 million of which R78.4 million will be allocated to routine capital, and of the R405 million project capital, R50 million is to be spent on a project to investigate the feasibility of mining Merensky ore at Booysendal.

Strategic review

Turning to the group strategy, Dunne alluded to the seeming failure of metal prices to react more immediately and positively to the supply shortfalls occasioned by the strikes in South Africa.  He pointed however, to a more sustained recovery in prices after 2016. “The challenge for us in the medium term is to position the company so that we benefit from a turn in market conditions when fundamentals for the metals reassert themselves,” he explained.

The labour relations climate in the sector remains fraught, and there are already some early signs of industry restructuring. “Northam is strategically well positioned with a number of internal and external opportunities to explore,” said Dunne.

On the issue of the group’s empowerment credentials Dunne added, “We are progressing our empowerment transaction, and seek to balance the need of our current shareholders with legislative requirements to bolster our empowerment status. Once this transaction is successfully put to bed, we will be well positioned to pursue our strategic ambitions.”

Operational optimisation

Given the considerable infrastructural footprint at Zondereinde, the focus will be on increasing the current 15 year life of mine by prioritising the deepening project, further exploitation of the UG2 orebody and improving the process plant to deal with a higher UG2 ratio, while also improving the Zondereinde operation’s position on the cost curve.

At Booysendal the priority remains the ramp-up, while opportunities for growth will be the subject of a study to capitalize on the size of the Booysendal orebody.

In terms of processing and refining, Northam’s strategic advantage has perhaps not always been fully recognized, so some work is being planned on the metallurgical complex, addressing both capacity and risk.

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 F2015 and F2016 Zondereinde mine is expected to continue in steady state production. The Booysendal mine is anticipated to reach steady state production by October 2015. The stable financial performance of the group therefore is largely dependent on improved industrial relations, improved demand for platinum group metals in the global economy (which could result in higher US dollar metal prices), achieving production targets and benign cost inflation. A weakening R/US dollar exchange rate as well as above average increases in administered prices such as Eskom’s power tariffs pose a risk to cost inflation.

Issued by Russell & Associates
Johannesburg
14 August 2014

Shareholders are advised that the group’s earnings per share and headline earnings per share for the year ended 30 June 2014 are estimated to range between a loss of 8.0 cents per share and earnings of 12.0 cents per share, compared to the earnings of 132.0 cents per share and headline earnings of 136.5 cents per share that were reported for the year ended 30 June 2013.

The anticipated decline in earnings reflects the negative impact of industrial action that resulted in the suspension of production at the group’s Zondereinde mine from 3 November 2013 to 21 January 2014. In addition, the new Booysendal mine is still ramping up to full production and is yet to contribute positively to the group’s earnings.

The weighted average number of shares in issue for the year ended 30 June 2014 increased to 390 969 652, compared to 382 560 902 shares for the year ended 30 June 2013, following a rights offer concluded in December  2013.

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 2014 will be released on or about 14 August 2014.

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

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

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

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

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

The 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

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

In compliance with paragraphs 3.63 to 3.66 of the JSE Limited Listings Requirements, Northam advises its shareholders of the following dealing in the company's ordinary shares by a director of a major subsidiary of the company:

Johannesburg
10 January 2014

Sponsor
One Capital