Announcements 2017

Amandelbult resource acquisition

Northam shareholders (“shareholders”) are referred to the announcement published on SENS on 11 October 2016 in respect of the acquisition by Northam of a portion of the Amandelbult mining right, contiguous with the north western boundary of Northam’s Zondereinde mine, for a cash consideration of R1 billion (the “Amandelbult transaction”). Shareholders are further referred to the announcement published on SENS on 25 August 2017 informing shareholders that consent from the Minister of Mineral Resources in terms of section 102 of the Mineral and Petroleum Resources Development Act, No. 28 of 2002 for the Amandelbult transaction had been received.

Northam is pleased to announce that the Amandelbult transaction has subsequently become unconditional and the transfer of the mining right was executed on 6 December 2017.

Pandora joint venture disposal

In addition, shareholders are referred to the announcement published on SENS on 15 May 2017 in respect of the disposal of Northam’s 7.5% participation interest in the Pandora joint venture (“Disposal”). Shareholders are hereby advised that the Disposal was concluded on 1 December 2017.

Paul Dunne, Northam’s Chief Executive Officer, said “Northam is pleased to have concluded the Amandelbult transaction, providing immediate access to a high quality resource that secures strategic flexibility, optionality and longevity at Zondereinde.”

Johannesburg
13 December 2017

Corporate Advisor, Sponsor and Debt Sponsor:  
One Capital

Attorneys: Cliffe Dekker Hofmeyr Inc.

Northam shareholders (“shareholders”) are advised that at the annual general meeting of shareholders held on Tuesday, 7 November 2017 (“AGM”), the ordinary and special resolutions, as set out in the notice of AGM dated Friday, 22 September 2017, were approved by the requisite majority of shareholders present or represented by proxy at the AGM. Further details regarding the voting results for each of the resolutions are contained below.

Changes to the board of directors

In compliance with paragraph 3.59 of the JSE Limited Listings Requirements, shareholders are advised as follows:

Retirement and appointment of Chairman

Mr Lazarus Zim, Chairman of the board of directors of Northam (“board”), retired at the conclusion of the AGM. The board would like to thank Mr Zim for his valuable contribution to the company during his ten year tenure as a director and Chairman of the board.

Northam is pleased to announce that following the retirement of Mr Zim, Mr Brian Mosehla, a non-executive director of the board, has been appointed as Chairman. Mr Mosehla joined Northam in August 2015 and represents Zambezi Platinum (RF) Limited. The board looks forward to Mr Mosehla’s contribution in his new role.

Mr Ralph Havenstein, the Lead Independent Director (“LID”) will continue to serve as LID of the company.

Appointment of independent non-executive directors and board committee changes

Mr David Brown, who has been elected as an independent non-executive director of the board at the AGM with effect from the date on which the amendment of the company’s memorandum of incorporation envisaged in special resolution number 1 becomes effective, has been appointed as a member of the audit and risk committee and Chairman of the investment committee.  Mr Brown will replace Mr Havenstein as Chairman of the investment committee, and Mr Havenstein will remain as a member of the investment committee.

Dr Yoza Jekwa has been appointed by the board as an independent non-executive director of the board and as a member of the social, ethics and human resources committee with effect from Wednesday, 8 November 2017. Dr Jekwa holds an MBA in Finance and an MBBCh (Medicinae Baccalaureus, Baccalaureus Chirurgiae). Dr Jekwa has extensive experience in the South African Corporate Banking industry and has held various positions in the medical field in South Africa and the United Kingdom. The board is pleased to welcome Dr Jekwa and looks forward to her future contribution to the company.

Mr Mosehla will replace Mr Zim as a member of the nomination committee, following Mr Zim’s retirement.

Mr John Smithies, an independent non-executive director of the board, has been appointed as a member of the health, safety and environmental committee.

Results of annual general meeting

The total number of Northam shares eligible to vote at the AGM is 509 781 212.

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

Ordinary resolution number 1 – adoption of audited group annual financial statements of the company for the year ended 30 June 2017

Ordinary resolution number 2.1 – re-election of Mr R Havenstein as a director

Ordinary resolution number 2.2 – re-election of Ms TE Kgosi as a director

Ordinary resolution number 2.3 – re-election of Mr KB Mosehla as a director

Ordinary resolution number 2.4 – re-election of Mr JG Smithies as a director

Ordinary resolution number 2.5 – election of Mr DH Brown as a director, conditional on special resolution number 1 being approved and the amendment of the company's memorandum of incorporation envisaged therein becoming effective.

Ordinary resolution number 3 – re-appointment of Ernst & Young Inc. as the independent external auditor of the company

Ordinary resolution number 4.1 – re-election of Ms HH Hickey as a member of the audit and risk committee

Ordinary resolution number 4.2 – re-election of Mr R Havenstein as a member of the audit and risk committee

Ordinary resolution number 4.3 – re-election of Ms TE Kgosi as a member of the audit and risk committee

Ordinary resolution number 5.1 – endorsement of the group’s remuneration policy

Ordinary resolution number 5.2 – endorsement of the group’s remuneration implementation report

Special resolution number 1 – approval of amendment to the company's memorandum of incorporation to increase the maximum number of directors

Special resolution number 2 – approval of non-executive directors’ fees for the year ending 30 June 2018

Special resolution number 3.1 – approval of financial assistance to related and interrelated companies

Special resolution number 3.2 – approval of financial assistance to executive directors and/or prescribed officers and their related and interrelated persons

Special resolution number 4 – approval of general authority to repurchase issued shares

Notes

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

Johannesburg
7 November 2017

Sponsor and Debt Sponsor
One Capital

Northam wishes to advise shareholders that the credit rating agency, Global Credit Rating Co. (“GCR”), has upgraded Northam’s long term credit rating to A-(ZA) from BBB+(ZA) and reaffirmed Northam’s short term credit rating at A1-(ZA), with the outlook being accorded as Stable.

Northam’s credit rating upgrade was achieved despite the current and ongoing challenges being faced by the mining industry, further illustrating the group’s resilience and ability to maintain a strong capital base and liquidity position.

Northam’s credit rating upgrade is based on the following key considerations:

• The realisation of projected benefits of Northam’s fully funded R6.6 billion black economic empowerment transaction through the acquisition of quality platinum group metal (“PGM”) assets at favourable prices.
• Additional sources of production being expected from Northam’s recent transactions, including the acquisition of the Tumela block and the Eland Platinum mine, and further geographical and segmental diversification through the acquisition of the PGM recycling assets in the United States of America.  
• A 60% increase in Northam’s operating profit as a result of improved metal prices, lower costs of production, general economies of scale and the implementation of stringent cost controls.
• The easing of Northam’s corporate risk profile as a result of Booysendal North maintaining steady state production for two years and becoming the second operational mine of the group.
• A strong improvement in Northam’s operating cash flows, up from R952.7 million for the financial year ended 30 June 2016 to R1.1 billion for the financial year ended 30 June 2017.
• A strong capital base, with R1.8 billion in cash as at 30 June 2017, well in excess of the R425 million in interest bearing obligations, as well as the availability of a R1.0 billion revolving credit facility (which increases to R1.5 billion H2 F2018), asserting Northam’s strong liquidity position in the medium-term.
• A further positive rating migration is predicted on the development of Booysendal South and recently acquired ore bodies, which should see a continued widening of the group’s operating margins and sustainability of cash flows and credit protection metrics.

GCR has published an announcement in regard to Northam’s credit rating (available from GCR at https://globalratings.net).

Johannesburg
13 October 2017

Corporate and Debt Advisor, Sponsor and Debt Sponsor
One Capital

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 of a major subsidiary of the company and of Zambezi Platinum and his associates:

Johannesburg
06 October 2017

Debt Sponsor
One Capital

Appointment of independent non-executive director

In compliance with paragraph 3.59(a) of the JSE Limited Listings Requirements, Northam shareholders are advised that Mr David Hugh Brown has been appointed as an independent non-executive director to the board of Northam (“board”), with effect from 7 November 2017, subject to shareholder approval at the Northam annual general meeting (“AGM”), to be held on Tuesday, 7 November 2017.

Mr Brown is a Chartered Accountant (SA) and is the chief executive officer and executive director of Coal of Africa Limited.  He is also an independent non-executive director of Vodacom Group Limited.  Mr Brown spent almost 14 years at Impala Platinum Holdings Limited, where he held a number of senior management positions including that of financial director and chief executive officer. 

Mr Lazarus Zim, chairman of the board, commented, “Northam is pleased to welcome Mr Brown to the board and we look forward to benefit from his extensive experience in the mining sector, which will further strengthen the company.”

Notice of annual general meeting

The AGM of Northam shareholders will be held at Glenhove Conferencing, 52 Glenhove Road, Melrose Estate, Johannesburg, South Africa on Tuesday, 7 November 2017 at 10:00 to transact the business as stated in the notice of AGM, forming part of the summarised annual report 2017 (“notice and summarised annual  report 2017”).

No change statement

Shareholders are advised that the summarised financial statements for the 12 months ended 30 June 2017, as contained in the notice and summarised annual report 2017, will be posted and also distributed electronically to shareholders today, 29 September 2017.  The audited annual financial statements for the year ended 30 June 2017 contain no material modifications to the audited preliminary report published on SENS on 25 August 2017.

The annual integrated report 2017, containing the full audited annual financial statements incorporating the auditors’ report in which Ernst & Young Inc. expressed an unmodified audit opinion, and the notice and summarised annual report 2017, are available on the following link: www.northam.co.za or can be obtained from the company’s registered office on request.

The salient dates of the AGM are as follows:

Johannesburg
29 September 2017

Sponsor and Debt Sponsor
One Capital

Johannesburg, Friday 25 August. Northam Platinum Limited (Northam) issued its results for the 2017 financial year today, Friday 25 August 2017.

KEY FEATURES OF THE YEAR

• Successful delivery on strategy
• Diversification adds flexibility and reduces risk
• Booysendal stand-out performance sustained
• Solid performance from Zondereinde
• Group unit costs in lower quartile of industry cost curve
• Tough market conditions persist

Paul Dunne provided a review of the group’s activities and fortunes over the year:
The year under review was a period in which the people of Northam rose to the challenge of a difficult platinum market and contributed positively to the strategic positioning of the group, ensuring sustainability into the future.

While I am confident that platinum group metals (PGMs) will emerge from their current trough, there is no doubt that the platinum mining sector is in a precarious position. Following a promising start for PGMs in F2017, the situation grew progressively more difficult as the year continued.

At the start of our financial year, spot platinum traded at USD1 039/oz and rose to reach a peak of USD1 182 in early August. This was followed by a steady decline to USD898/oz on the last trading day of December. A subsequent recovery was not sustained, with the result that the metal’s price was struggling at USD922/oz by the end of June. Palladium, which makes a lesser contribution to Northam’s product mix and revenue, performed well, with the price of spot metal opening the financial year at USD598/oz before reaching an interim high of USD770/oz at the end of November.

The final six months of our financial year resulted in a steady advance to USD898/oz in mid-June, followed by a few weeks of price consolidation. It is unclear what the immediate future holds: over the longer term though, demand for both metals for use in auto catalysts and for catalysts in many oil and chemicals processes will increase.

The fact remains, however, that Northam and its PGM-mining counterparts are price takers, and their future sustainability remains dependent on an ability to contain the costs of production. Northam has succeeded in moving unit costs into the lowest quartile of the industry cost curve at a group level.

Our success depends on our continuing ability to contain costs at levels that ensure operations remain profitable throughout the market cycle. We are positioning our operations to take advantage of rising prices when platinum enters its next upward cycle. We aim to be “first to market” and capable of delivering up to an annual one million ounces of PGMs when demand for newly-mined metal recovers, as we believe it will.

HEALTH AND SAFETY

It is regrettable that, shortly after Zondereinde had achieved six million fatality free shifts in November 2016, we lost our colleague, Mr Alexandre Macave, a locomotive operator with many years’ service, in an underground rail accident on 6 January 2017. I offer my personal condolences and those of my executives to Mr Macave’s family, his friends, and colleagues.

Soon after the end of the financial year in July 2017, Booysendal achieved three million fatality-free shifts. Mechanised technology enhances not only our people’s safety but also contributes to the cost-effectiveness of mining. Mechanised systems will continue to be judiciously applied across group operations where appropriate.

DELIVERING ON OUR STRATEGY

Our strategy is based on growth, operational diversification and optimisation. Our growth strategy is to target large, shallow, mechanisable assets contiguous to existing operations. Any deviation from this approach would have to be motivated by a compelling value proposition for our shareholders.

Recently we have purchased a recycling asset which will complement Northam’s primary production in future. Our growth and diversification from a single operating asset – Zondereinde – to one that now includes Booysendal North and South and the newly-acquired Eland mine means less operational risk for the group and all our stakeholders.

Highlights for F2017 include the continued success of Booysendal North, which has now been producing at steady state for more than two years. Booysendal North performed particularly well, producing 199 000oz of PGMs, well above its 160 000oz nameplate capacity. The deepening project is progressing, and remains on schedule for completion by F2019. The recently-developed Booysendal North Merensky mine is currently producing at 25 000oz per annum.

Philosophically we believe mine first, metallurgy second. We have responded to this natural progression by developing and constructing the mining operations which produce the ore ahead of processing. This has been followed by a significant capital investment in our smelting capacity at Zondereinde, where an additional new furnace will serve to absorb the steadily growing output from our expanding mining footprint.

Zondereinde produced a solid operational performance, under testing circumstances, brought about by the necessity for operational reorganisation measures in the workplace, following the discharge of 357 employees after labour disruptions in June 2016.

ACQUISITIONS

In F2017 we made two important acquisitions.

In October 2016, we concluded an agreement to acquire the high-quality resources of the Tumela block from Anglo American Platinum’s Amandelbult mine adjacent to our Zondereinde mine. Not only will the incorporation of Tumela increase Zondereinde’s life expectancy to beyond 30 years, it provides significant operating synergies for Zondereinde, delivering flexibility and optionality and allows the mine to continue mining higher-grade Merensky reef at little incremental cost. This transaction will transform Zondereinde, providing it with similar long-term potential and flexibility enjoyed by the Booysendal mine.

We followed this up in February 2017 with the R175 million purchase of Eland Platinum mine from Glencore Operations South Africa Proprietary Limited. We regard Eland as a low-cost option for the future. Eland’s resource is shallow and located on the south-eastern limit of the western limb of the Bushveld Igneous Complex. Its two mining rights contain a resource estimated at 21.3Moz 4E (platinum, palladium, rhodium and gold) with an average in situ 4E grade of 4.4 g/t.

In terms of the Eland transaction, Northam acquires all Eland’s assets: its two mining rights, surface and underground infrastructure including a concentrator with a nameplate capacity of 250 000tpm, two decline systems equipped to 1.3km, surface support infrastructure designed for a 250 000tpm operation and a mining fleet of more than 100 vehicles which includes low-profile mechanised mining equipment. In addition, we entered into a long-term marketing agreement with Glencore for the group’s chrome ore sales.

Subsequent to year-end, Northam reached an agreement to purchase a suite of PGM recycling equipment and the associated premises from A-1 Specialized Services Inc., a recycler of PGMs. The business is located in the state of Pennsylvania, United States of America. The total value of the transaction amounts to USD10.7 million in cash. The transaction gives Northam a low-cost entry into a key segment of the PGM market. The recyclable material market from auto catalysts in the US is well established, large and continues to expand. Northam has secured an excellent asset base of strategic future importance; which is an easily scalable business to meet growing demand; and provides exposure to the broader PGM market.

THE FUTURE

Booysendal North and South are evolving to produce an annual 500 000oz within three years. Zondereinde will be delivering 350 000oz and Eland should produce at 150 000oz over a 30-year life. With these numbers we believe we will have successfully transformed Northam into a major producer with low unit costs and lower operational risk. I should emphasise, however, that we are not driven by size for size’s sake. Our production will be tailored to meet market demand, while ensuring that we have the mining and processing capacity to respond promptly to changes in market conditions. It is not our policy to cross-subsidise, and each operation needs to be profitable through the cycle.

EMPOWERMENT

It is inconceivable that our country’s mining industry could remain sustainable without empowerment and transformation. Northam’s continued development has been made possible by our black economic empowerment (BEE) transaction with a consortium representing a broad selection of historically disadvantaged South African (HDSA) individuals and groupings, who, together hold a 31.4% BEE interest in Northam through Zambezi Platinum (RF) Limited.

Northam’s response to the many other aspects of the DMR’s revised charter is aligned with that of the South African Chamber of Mines, of which Northam is a member. It is critical to bring government back to the negotiating table and to work towards a solution which will ultimately grow and strengthen our sector.

APPRECIATION

Northam’s progress during F2017 has been a team effort. I want to thank all the people of Northam Platinum, including the board and our management team, for their contributions during what has been a year of considerable change.

Distributed by R & A Strategic Communications

Johannesburg
Tel: +27 (0)11 880 3924
Marion Brower: +27 (0)71 493 0387
Jan Walker: +27 (0) 71 493 0429

transaction to be concluded in due course

Johannesburg, Friday 25 August 2017. Northam is pleased to announce that the DMR has approved the company’s intended acquisition of a portion of the Amandelbult mining right. The section 102 consent, issued in terms of the MPRDA mining licence amendment process, will provide Northam’s Zondereinde mine access to an additional resource of 16.7Moz.

Northam chief executive Paul Dunne said today, “Northam is pleased to have achieved this significant milestone and looks forward to concluding the transaction in due course. The incorporation of Tumela will increase Zondereinde’s life expectancy to beyond 30 years, it provides significant operating synergies for Zondereinde, delivering flexibility and optionality and allows the mine to continue mining higher-grade Merensky reef at little incremental cost.”

The section 102 consent fulfils one of the key conditions precedent to the transaction, which is valued at R1 billion in cash.

Distributed by R & A Strategic Communications

Johannesburg
Tel: +27 (0)11 880 3924
Marion Brower: +27 (0)71 493 0387
Jan Walker: +27 (0) 71 493 0429

Shareholders are advised that the group’s loss per share for the year ended 30 June 2017 is estimated to range between 167.8 cents per share and 196.0 cents per share and the headline loss per share is estimated to range between 167.3 cents per share and 196.3 cents per share, compared with the loss per share of 145.3 cents and headline loss per share of 140.9 cents reported for the year ended 30 June 2016. The aforementioned ranges expressed in percentage terms, are, in respect of a loss per share, an increase of between 15% and 35% per share and, in respect of headline earnings per share, an increase of 19% and 39% per share.

The anticipated loss is attributable to the higher Zambezi Platinum (RF) Limited (“Zambezi”) preference share dividends, which are consolidated in the group’s results in terms of the International Financial Reporting Standards. 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 in terms of the Northam guarantee and that the accrued dividends are consolidated into the Northam results as a non-cash item for Northam.

Despite difficult economic circumstances during the reporting period, both of the group’s operating mines, Zondereinde and Booysendal, are expected to record an operating profit. The group’s total operating profit is estimated to be higher than the previous year, owing to an improved operational performances and well contained unit costs.

The weighted average number of Northam shares in issue for the year ended 30 June 2017 was 349 875 759 (30 June 2016: 349 875 759 shares).

The information on which this trading statement and trading update is based has not been reviewed or reported on by the group’s auditors. The audited results for the year ended 30 June 2017 are anticipated to be published on or about 25 August 2017.

Distributed by Russell & Associates
Johannesburg
Tel: +27 (0)11 880 3924
Marion Brower: +27 (0) 71 493 0387
Jan Walker: +27 (0) 71 493 0429

1. INTRODUCTION

   Northam is pleased to announce that it has entered into binding transaction agreements pursuant to which it will acquire platinum group metals (“PGM”) recycling equipment located in Pennsylvania, United States of America (“US”) (“PGM Recycling Equipment”), as well as immoveable property comprising land and buildings for the PGM Recycling Equipment (“Premises”), (collectively, the “Transactions”).

   The aggregate consideration payable by Northam in respect of the Transactions amounts to approximately USD10.7 million, to be settled in cash. Closing and settlement of the Transactions are envisaged to take place by no later than 1 September 2017.

2. BACKGROUND INFORMATION AND RATIONALE

   The PGM Recycling Equipment will be acquired from A-1 Specialized Services Inc., a recycler of PGMs from automotive catalysts. The PGM Recycling Equipment comprises, inter alia, multiple ceramic catalytic converter processing lines and ancillary equipment, including sampling and separation systems, transportation and a materials handling fleet.

   The Premises consist of approximately 30 acres of land as well as buildings measuring approximately 301,000 sq.ft used for warehousing, manufacturing and office space. It has direct access to excellent surrounding infrastructure, including roads and a direct rail connection.

   The Transactions afford Northam as an integrated primary and secondary producer, the opportunity to expand and diversify its business interests into PGM recycling. Northam will be able to participate in the growing demand for recycled PGMs from autocatalysts and maintain and develop a strategic footprint in North America.

   Paul Dunne, Northam’s Chief Executive Officer, said “the Transactions represent a low cost entry by Northam into a key segment of the broader PGM market. Northam has secured an excellent asset base of strategic future importance.”

3. CATEGORISATION

   The Transactions fall below the threshold for categorisation in terms of the JSE Limited Listings Requirements and this announcement is provided for information purposes only.

Johannesburg
28 July 2017

Corporate Advisor, Sponsor and Debt Sponsor
One Capital

In accordance with Section 122(3)(b) of the Companies Act, No 71 of 2008, as amended (the “Act”) and paragraph 3.83(b) of the JSE Limited Listings Requirements, Northam shareholders are advised of the following:

• The company has received notification from the Public Investment Corporation SOC Limited (“PIC”), that they have, in aggregate, acquired an interest in Northam shares, such that the total beneficial interest held by the PIC now amounts to 10.081% of the total issued share capital of Northam.

The company will file the relevant notice with the Takeover Regulation Panel, as required in terms of Section 122(3)(a) of the Act.

Johannesburg
22 June 2017

Sponsor and Debt Sponsor
One Capital

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

Johannesburg
18 May 2017

Sponsor and Debt Sponsor
One Capital

1. Introduction

Northam is pleased to announce that Mvelaphanda Resources Proprietary Limited (“Mvelaphanda”), a wholly-owned subsidiary of Northam, entered into a sale of participation interest agreement with Eastern Platinum Limited (“EPL”), a subsidiary of Lonmin Plc (“Lonmin”) on 13 May 2017 (“Agreement”). In terms of the Agreement Northam, through Mvelaphanda, will dispose of its 7.5% interest in the Pandora joint venture (“Pandora JV”) to EPL (“Transaction”). The consideration payable to Northam under the Transaction amounts to (i) R45,565,000 plus (ii) the amount of any cash calls paid by Northam to the Pandora JV during the period 1 January 2017 to completion of the Transaction, provided that such cash calls do not exceed an amount  of R50,000,000, (“Disposal Consideration”).

The Disposal Consideration will be settled on fulfilment of the Transaction conditions precedent referred to in paragraph 3 below.

2. Background information and rationale

The Pandora JV is managed by Lonmin and is currently held 50% by Lonmin, through EPL, 42.5% by Anglo American Platinum Limited, through Rustenburg Platinum Limited, and 7.5% by Northam, through Mvelaphanda. Northam does not consider its minority interest in the Pandora JV as being core to its business.

3. Conditions precedent

The Transaction is subject to, inter alia, all necessary regulatory approvals being obtained, including consent from the Minister of Mineral Resources in terms of section 11 of the Mineral and Petroleum Resources Development Act, No. 28 of 2002, and approval from Lonmin’s lending banks.

4. Categorisation

The Transaction falls below the threshold for categorisation in terms of the JSE Limited Listings Requirements and this announcement is provided for information purposes only.

Johannesburg
15 May 2017

Corporate Advisor, Sponsor and Debt Sponsor
One Capital 

Attorneys
Cliffe Dekker Hofmeyr Inc. 

Creating capital efficient, scalable growth opportunities

Johannesburg, 24 February 2017. Northam Platinum Limited (Northam) issued its results for the 2017 financial half-year today, Friday 24 February. Chief executive Paul Dunne provided the commentary below on the group’s performance and prospects.

The standout feature of the first half of F2017 was the good operating performance at Booysendal, and the pace at which growth is being achieved. The production run rate of 100 000 PGM ounces in the first half significantly exceeded the mine’s nameplate capacity. From the original mining footprint we believe we have created capital efficient, scalable growth opportunities with long-term benefits for all stakeholders.

Both the deepening project on the UG2 mine, and work on the Booysendal South mine continued apace. The first blast for the boxcut at Booysendal South was completed in early September 2016 and the mining contract has recently been awarded to begin underground operations in March 2017. The Merensky module at Booysendal North is now complete and producing at 25 000 tonnes per month.

Credit must also go to management and employees for another outstanding safety achievement. The excellent fatality-free run at Zondereinde continued with 6 million fatality-free shifts recorded in November 2016. In early January though, with the start-up, Mr Alexandre Macave, a loco operator with many years’ service, lost his life in an underground rail accident. The board and management express their sincere condolences to the family and colleagues of Mr Macave.

Both tonnages and production ounces were affected at Zondereinde owing to operational reorganisation measures underground. The reorganisation of mining teams followed the discharge of 357 employees after labour disruptions in June 2016. This situation is being addressed and we expect to be back to full complement by March 2017. The drop in milled tonnages was exacerbated by an 18-day outage resulting from a mill bearing failure in the UG2 concentrator.

We remain optimistic that a rise in prices, although gradual, cannot be avoided, given the anticipated rise in demand, even in a conservative global growth climate, and the supply side constraints expected from South African producers in the next few years.

Our fully-funded growth projects at Booysendal, along with the acquisition of new ground to mine at Zondereinde, will add value through an increased production profile, and will allow us to deliver metal into a higher price environment in the years to come.

I am pleased to report that our strategy is unfolding steadily. Adding life to our existing operations has proved to be a cost-effective way of growing our production base, while increasing flexibility and lowering company risk.

Over time, the acquisition of contiguous resources at Zondereinde mine from Anglo American Platinum, announced on 11 October 2016 will restore the balance of Merensky ore to the Zondereinde mining mix, driving high-margin production growth.

The development of Booysendal South continues. With a relatively modest capital programme and small footprint, this brownfields expansion will deliver 250 000 PGM ounces per annum at steady state.

Expanding our metallurgical processing capacity is a critical feature of our growth strategy. Construction work on the dryer and furnace at Zondereinde continues.

Importantly, none of this work would have materialised without the black economic empowerment transaction with Zambezi Platinum (RF) Limited (Zambezi) concluded in 2015.

Our HDSA equity levels remain within the current Mining Charter guidelines, along with headroom to manoeuvre. On the social front, our reinvigorated housing strategy is delivering pleasing results. The hostel conversion programme is now complete, and in total, Zondereinde has built 433 houses in the neighbouring towns of Mogwase and Northam, along with a world-class new industrial change house for our living out employees.

In addition to our brownfields growth strategy, we continue to look for external opportunities. In this regard, we have signed an agreement to purchase the Eland mine near Brits from Glencore Operations South Africa Proprietary Limited for R175.0 million.

We believe that the Eland orebody, together with the established infrastructure, presents an attractive, low-cost opportunity and a medium-term option for growth.

CONCLUSION

Growth doesn’t occur without spend. This has been a busy half-year for both the group and its operating divisions with prepayments made on the aerial rope conveyor infrastructure for Booysendal South of R157.9 million, capital expenditure amounting to R773.0 million and the acquisition of Zambezi preference shares for R208.7 million.

Nevertheless, our cash balance stands at R2.2 billion, and our financial position remains robust. Northam is well positioned to benefit from an upswing in metal prices.

Issued by
Russell & Associates
Johannesburg
Tel +27 (0)11 880 3924
Marion Brower +27 71 493 0387
Jan Walker +27 71 493 0429

1. INTRODUCTION

   Northam is pleased to announce that it has entered into the following agreements:

   • an agreement with Glencore Operations South Africa (Pty) Ltd (“GOSA”) to purchase the Eland Platinum mine (“Eland” or the “mine”) for a cash consideration of R175 million (“Eland transaction”); and
   • a long-term chrome marketing agreement with Glencore International AG (“Glencore”) to exclusively market and sell chrome produced at Northam’s Zondereinde and Booysendal operations.

   More on Eland

   Eland is located on the south-eastern limit of the western limb of the Bushveld Igneous Complex. It comprises two mining rights and contains a resource estimated at 21.3 Moz 4E with an average in situ 4E grade of 4.4 g/t (source: Glencore resource and reserve statement 2016).

   The mine was placed on care and maintenance in September 2015. In terms of the Eland transaction and for a purchase price of R175 million in cash, Northam will acquire all Eland’s assets, including:

   • Eland’s two mining rights;
   • surface and underground infrastructure including a concentrator with a nameplate capacity of 250ktpm; a chrome spiral recovery plant; a tailings storage facility with a capacity of 100 million tonnes; two decline systems equipped to 1.3km; and surface support infrastructure designed for a 250ktpm operation;
   • immovable property; and
   • a mining fleet in excess of 100 vehicles which includes low profile mechanised mining equipment.

   The transaction includes the takeover of Eland’s environmental obligations and responsibilities. The purchase consideration will be payable on the fulfilment of all the conditions precedent. Northam will be granted access to Eland from the signature date of the agreement to the fulfilment of the conditions precedent in order to facilitate a smooth transfer of ownership. Northam will reimburse GOSA for care and maintenance costs, amounting to approximately R30 million per annum, during this period.

   Commenting on the transaction today, Northam chief executive Paul Dunne said, “the Eland transaction provides Northam with a medium-term option over a large, shallow resource with fully developed, world-class surface infrastructure. Northam will also be acquiring a sizeable mining fleet, a portion of which will be utilised at the Booysendal South operation.

   The chrome marketing agreement establishes a long-term relationship between Northam and Glencore, a leading global chrome trader, which will contribute to maximising Northam’s chrome revenue.”

2. CONDITIONS PRECEDENT

   The Eland transaction is subject to, inter alia, the following conditions precedent:

   • consent being granted by the Minister of Mineral Resources in terms of section 11 of the Mineral and Petroleum Resources Development Act, No. 28 of 2002;
   • Northam entering into a chrome offtake agreement with GOSA or its affiliates in respect of all chrome produced at Eland; and
   • cancellation of certain existing contractual arrangements between Eland and certain third parties, subject to Northam’s satisfaction.

3. CATEGORISATION

   The Eland transaction falls below the threshold for categorisation in terms of the JSE Limited Listings Requirements and this announcement is provided for information purposes only.

Johannesburg
24 February 2017

Corporate Advisor, Sponsor and Debt Sponsor
One Capital

Attorneys
Cliffe Dekker Hofmeyr Inc.