Announcements 2019

Northam refinances its five year R3.5 billion revolving credit facility and increases its R2 billion domestic medium term note programme limit to R5 billion

Northam is pleased to announce that it has concluded definitive agreements in terms of which its existing five year R3.5 billion revolving credit facility (“RCF”) will be refinanced on more favourable terms and the maturity date will be extended from November 2021 to August 2024


NORTHAM PLATINUM LIMITED
Incorporated in the Republic of South Africa
(Registration number 1977/003282/06)
Share code: NHM ISIN: ZAE000030912
Debt issuer code: NHMI
Bond code: NHM002 Bond ISIN: ZAG000129024
Bond code: NHM006 Bond ISIN: ZAG000158577
Bond code: NHM007 Bond ISIN: ZAG000158593
Bond code: NHM008 Bond ISIN: ZAG000158858
Bond code: NHM009 Bond ISIN: ZAG000158866
Bond code: NHM010 Bond ISIN: ZAG000159229
Bond code: NHM011 Bond ISIN: ZAG000159237
Bond code: NHM012 Bond ISIN: ZAG000160136

(“Northam”)

NORTHAM REFINANCES ITS FIVE YEAR R3.5 BILLION REVOLVING CREDIT FACILITY AND INCREASES ITS R2 BILLION DOMESTIC MEDIUM TERM NOTE PROGRAMME LIMIT TO R5 BILLION

Northam is pleased to announce that it has concluded definitive agreements in terms of which its existing five year R3.5 billion revolving credit facility (“RCF”) will be refinanced on more favourable terms and the maturity date will be extended from November 2021 to August 2024. The interest rate on the previous RCF was JIBAR plus 3.3% whereas the effective interest rate on the new RCF ranges between JIBAR plus 2.2% (at the lower end of utilisation) and JIBAR plus 2.6% (at the upper end of utilisation, including full utilisation).

In addition, the interest rate on Northam’s R500 million general banking facility (“GBF”) will reduce from prime less 1.5% to prime less 1.75%.
The lower interest rate on the RCF and GBF will reduce Northam’s weighted average cost of debt.

Northam further advises that the board of directors has approved an increase in the limit stipulated in Northam’s Domestic Medium Term Note Programme (“DMTN Programme”), dated 3 August 2012, from R2 billion to R5 billion. This increase will provide Northam with increased funding flexibility. Northam currently has R1.825  billion of notes in issue under the DMTN Programme.

Paul Dunne, Northam’s Chief Executive, said “The new RCF and GBF terms reflect improved lender confidence in Northam, underpinned by Northam’s operational performance and project execution. Northam’s cost of debt will be reduced and the combination of the new facilities and increased DMTN Programme will provide Northam with increased funding flexibility in support of Northam’s significant and continued growth”.

Johannesburg
22 August 2019

Corporate Advisor, Sponsor and Debt Sponsor to Northam
One Capital

Attorneys to Northam in respect of the RCF and GBF
Cliffe Dekker Hofmeyr Inc.

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

Sole Arranger and Dealer to Northam in respect of the DMTN Programme
One Capital

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

Interest payments notification – NHM010 and NHM011

Northam bondholders are advised of the following interest payments due on Monday, 26 August 2019.


Northam bondholders are advised of the following interest payments due on Monday, 26 August 2019:

Bond Code: NHM010
ISIN No: ZAG000159229
Coupon: 9.558% per annum
Interest Period: 24 May 2019 to 25 August 2019
Interest Amount Due: R1 230 756.16
Payment Date: 26 August 2019
Date Convention: Following Business Day

Bond Code: NHM011
ISIN No: ZAG000159237
Coupon: 10.908% per annum
Interest Period: 24 May 2019 to 25 August 2019
Interest Amount Due: R14 045 917.81
Payment Date: 26 August 2019
Date Convention: Following Business Day

Johannesburg
21 August 2019

Debt Sponsor
One Capital

Trading statement

In terms of paragraph 3.4(b) of the JSE Limited Listings Requirements, companies are required to publish a trading statement as soon as they are satisfied, with a reasonable degree of certainty, that the financial results for the current reporting period will differ by at least 20% from the financial results of the previous corresponding period.


In terms of paragraph 3.4(b) of the JSE Limited Listings Requirements, companies are required to publish a trading statement as soon as they are satisfied, with a reasonable degree of certainty, that the financial results for the current reporting period will differ by at least 20% from the financial results of the previous corresponding period.

Northam expects to achieve a record operating profit for the financial year ended 30 June 2019, underpinned by a solid operating performance at both operations, well contained unit cash costs and a higher basket price received. The group achieved a record production from own operations amounting to 519 954 4E oz, representing a 7.4% increase from F2018. Sales volumes increased by 23.3% to 583 069 4E oz.

F2019 financial highlights

  F2019 F2018 Percentage movement
Revenue R10.6 billion R7.6 billion 41.0%
Operating profit R2.4 billion R823.3 million 192.7%
Basic earnings per share 16.2 - 18.2 cents (201.5) cents 108.0% - 109.0%
Headline earnings per share 14.8 - 16.8 cents (200.5) cents 107.4% - 108.4%
Number of shares in issue 509 781 212 509 781 212 N/A
Weighted average number of shares 349 875 759 349 875 759 N/A

The group expects normalised headline earnings, defined as headline earnings adjusted for the impact of Northam’s black economic empowerment transaction, to be in excess of R1.3 billion, representing an increase in excess of 220% from F2018. This is the group’s main measure of financial performance.

The number of shares in issue remains unchanged at 509 781 212 (F2018: 509 781 212). The weighted average number of shares in issue for the year ended 30 June 2019 also remains unchanged at 349 875 759 (F2018: 349 875 759 shares), which is used to calculate basic and headline earnings per share.

The financial information contained in this announcement has not been reviewed or reported on by Northam’s auditors. The condensed results for the year ended 30 June 2019 are expected to be published on or about 23 August 2019.

Johannesburg
12 August 2019

Sponsor and Debt Sponsor
One Capital

Acquisition of additional Zambezi preference shares

Northam shareholders (“shareholders”) are referred to the announcement dated 1 November 2016 (“previous announcement”) pertaining to the acquisition by Northam of 4 043 018 preference shares in Zambezi Platinum (RF) Limited (“Zambezi”), (“Zambezi preference shares”) for a purchase consideration equal to the issue price plus accumulated preference share dividends (“face value”).


1. Introduction

Northam shareholders (“shareholders”) are referred to the announcement dated 1 November 2016 (“previous announcement”) pertaining to the acquisition by Northam of 4 043 018 preference shares in Zambezi Platinum (RF) Limited (“Zambezi”), (“Zambezi preference shares”) for a purchase consideration equal to the issue price plus accumulated preference share dividends (“face value”).

Northam is pleased to announce that, since the date of the previous announcement, Northam has acquired additional Zambezi preference shares and has reached agreement to acquire further Zambezi preference shares, as detailed in paragraph 3 below. As a result of these acquisitions, Northam will hold 5 708 458 Zambezi preference shares (“Northam owned prefs”), representing approximately 3.6% of all Zambezi preference shares in issue. The face value of the Northam owned prefs, calculated as at 6 August 2019, amounts to approximately R403.5 million.

All the Northam owned prefs have been purchased at, or below, face value (as calculated on the date of acquisition).

2. Rationale for the acquisition of Zambezi preference shares

Northam’s acquisition of Zambezi preference shares will reduce the preference share dividend expense and liability included in Northam’s consolidated financial statements, as well as Northam’s potential financial exposure under the guarantee it provided to holders of Zambezi preference shares, should the guarantee be called upon. Furthermore, should Zambezi elect to redeem the Zambezi preference shares through a distribution of ordinary shares in Northam (“Northam shares”) held by Zambezi, then the redemption of the Zambezi preference shares held by Northam at such time will result in a distribution of Northam shares to Northam, thereby reducing the number of Northam shares in issue.

3. Small related party transaction and fairness opinion

Northam has reached agreement with Coronation Asset Management Proprietary Limited, acting as an investment manager on behalf of its clients (“Coronation”), pursuant to which Northam will acquire 341 455 Zambezi preference shares from Coronation on Tuesday, 6 August 2019, at a price of R70.69 per Zambezi preference share, representing the face value of such shares, for a total cash consideration of approximately R24.1 million (“further transaction”).

The further transaction is not subject to any conditions precedent and will be funded from Northam’s cash reserves.

Coronation is a material shareholder of Northam, in that it is able to exercise voting control, on behalf of its clients, in excess of 10% of all Northam shares in issue. Accordingly, Coronation is a related party to Northam as contemplated in paragraph 10.1(b)(i) of the JSE Limited Listings Requirements (“Listings Requirements”).

Over the course of the past 12 months, Northam has acquired Zambezi preference shares from Coronation at face value. As a result of the aggregation provision contemplated in paragraph 10.8 of the Listings Requirements, the further transaction is categorised as a “small related party transaction” in terms of paragraph 10.7 of the Listings Requirements.

The further transaction is not subject to shareholder approval, provided an independent professional expert has confirmed that the terms of the further transaction are fair to shareholders. Northam has appointed BDO Corporate Finance Proprietary Limited (“BDO”) as the independent expert for purposes of providing an opinion in respect of the fairness of the further transaction (“fairness opinion”). 

BDO has considered the terms and conditions of the further transaction and is of the opinion that the further transaction is fair to shareholders. A copy of the fairness opinion is available for inspection for a period of 28 days from the date of this announcement, at Northam’s registered office being, Building 4, 1st Floor, Maxwell Office Park, Magwa Crescent West, Waterfall City, Jukskei View.

4. Details of the Zambezi preference shares

The Zambezi preference shares are cumulative, non-participating redeemable preference shares which accrue dividends at a nominal rate equal to the South African prime interest rate plus 3.5%, calculated on a daily basis, based on a 365-day year, compounded annually. The Zambezi preference shares were listed on the securities exchange operated by the JSE Limited on 11 May 2015.

Subject to certain exceptions, the Zambezi preference shares are redeemable on 17 May 2025 and will be redeemed, at Zambezi’s election, in cash and / or through the distribution of Northam shares held by Zambezi. The redemption of the Zambezi preference shares is secured through a guarantee provided by Northam in favour of the holders of Zambezi preference shares. If the guarantee is exercised, Northam will, at its election, settle the associated liability using cash and / or through the issue of new Northam shares.

As reported in the reviewed condensed consolidated interim results of Northam for the six months ended 31 December 2018 (“Northam results”), the Zambezi preference share liability amounted to approximately R10.1 billion and the accumulated preference share dividends for the period amounted to R611.8 million. The acquisition by Northam of Zambezi preference shares will reduce the Zambezi preference share liability and accumulated preference share dividends recognised in Northam’s consolidated financial statements. The accounting policies adopted by Northam in the preparation of its consolidated financial statements, including the Northam results, are in accordance with the International Financial Reporting Standards.

Johannesburg
6 August 2019

Corporate Advisor, Sponsor and Debt Sponsor to Northam
One Capital

Independent Expert to Northam
BDO Corporate Finance Proprietary Limited

Attorneys to Northam
Cliffe Dekker Hofmeyr Inc.

Interest payments notification – NHM008 and NHM009

Northam bondholders are advised of the following interest payments due on Friday, 26 July 2019.


Northam bondholders are advised of the following interest payments due on Friday, 26 July 2019:

Bond Code: NHM008
ISIN No: ZAG000158858
Coupon: 9.558%
Interest Period: 26 April 2019 to 25 July 2019
Interest Amount Due: R4 765 906.85
Payment Date: 26 July 2019
Date Convention: Following Business Day

 

Bond Code: NHM009
ISIN No: ZAG000158866
Coupon: 10.908%
Interest Period: 26 April 2019 to 25 July 2019
Interest Amount Due: R6 798 821.92
Payment Date: 26 July 2019
Date Convention: Following Business Day

Johannesburg
23 July 2019

Debt Sponsor
One Capital

Interest payments notification – NHM006 and NHM007

Northam bondholders are advised of the following interest payments due on Tuesday, 16 July 2019.


Northam bondholders are advised of the following interest payments due on Tuesday, 16 July 2019:

Bond Code: NHM006
ISIN No: ZAG000158577
Coupon: 10.408% per annum
Interest Period: 16 April 2019 to 15 July 2019
Interest Amount Due: R6 487 178.08
Payment Date: 16 July 2019
Date Convention: Following Business Day

 

Bond Code: NHM007
ISIN No: ZAG000158593
Coupon: 10.908% per annum
Interest Period: 16 April 2019 to 15 July 2019
Interest Amount Due: R8 158 586.30
Payment Date: 16 July 2019
Date Convention: Following Business Day

Johannesburg
11 July 2019

Debt Sponsor
One Capital

Northam approves Kukama project at Eland mine

Northam is pleased to advise its shareholders that mining operations at the Kukama shaft situated at its Eland mine complex will recommence in the new financial year (F2020).


Northam is pleased to advise its shareholders that mining operations at the Kukama shaft situated at its Eland mine complex will recommence in the new financial year (F2020).

This significant development comes after the successful conclusion of a feasibility study for Kukama shaft.

Background

Northam purchased a 100% interest in the Eland mine from Glencore Operations South Africa Proprietary Limited in February 2017 for a cash consideration of R175 million. Eland mine was placed on care and maintenance in 2015 and Northam continued to manage it as such whilst undertaking the feasibility study for the Kukama shaft.

In terms of the transaction, Northam acquired all of Eland mine’s assets which included:

  • Eland’s two mining rights with a resource currently estimated at 19.3 Moz 4E at an average in situ grade of 3.95 g/t;
  • surface and underground infrastructure including a concentrator with a nameplate capacity of 250 ktpm; a chrome spiral recovery plant; a tailings storage facility; two decline systems; and surface support infrastructure;
  • immovable property; and
  • a mining fleet in excess of 100 vehicles, which includes low profile mechanised mining equipment.

Key conclusions from the Kukama shaft feasibility study

  • Steady state production of 150 Koz pa 4E, at unit costs in the lower half of the industry cost curve.
  • Forecast investment returns comfortably in excess of Northam’s current weighted average cost of capital.
  • Forecast positive free cash flow generated from year 4 onwards.
  • Creation of 2 800 permanent jobs.
  • Life of mine in excess of 30 years.

Current status of Eland mine

To date, Northam has continued to manage the Eland mine on care and maintenance whilst undertaking the feasibility study for the Kukama shaft.

Whilst completing the feasibility study for Kukama shaft and following positive feedback from the study, Northam commenced early work in preparation for its recommissioning. This includes refurbishing underground fixed and mobile equipment, as well as certain sections of the concentrator. Processing of the tailings storage facility at Eland mine has also commenced, which facilitated recommissioning of the surface plant and associated infrastructure.

The next steps

Whilst completing the feasibility study for Kukama shaft and following positive feedback from the study, Northam commenced early work in preparation for its recommissioning. This includes refurbishing underground fixed and mobile equipment, as well as certain sections of the concentrator. Processing of the tailings storage facility at Eland mine has also commenced, which facilitated recommissioning of the surface plant and associated infrastructure.

Capital expenditure

Total developmental capital expenditure is estimated at R2.2 billion over a five year period, in nominal terms (F2019 terms: R1.9 billion), which includes a provision for working capital requirements during the development phase. The project will be fully funded from Northam’s own resources.

Conclusion

Northam chief executive Paul Dunne points to the positive investment return demonstrated by the Kukama project, which comfortably exceeds the company’s weighted average cost of capital. “In addition,” says Dunne, “the project further diversifies the group’s operations and production capacity and does so efficiently by utilising an extensive existing capital footprint. Kukama is a project that lends itself to scaling up or down and will form the production base for the broader Eland complex. The mining method to be implemented at Kukama is well-known and well proven.  Our focus will be on safe, quality, long-life production, whilst creating sustainable long-term employment in the platinum industry.”

Disclaimer

The information contained in this announcement does not constitute an earnings forecast. The financial information provided is the responsibility of the directors of Northam, and such information has not been reviewed or reported on by the company’s auditors.

Presentation

Paul Dunne and the Northam team will be presenting to members of the investment community today, Wednesday 26 June in Johannesburg on latest growth developments in the group.  The presentation will be webcast at 11:00 and accessible on the Northam website www.northam.co.za

Johannesburg
26 June 2019

Sponsor and Debt Sponsor
One Capital

Northam breathes new life into Eland

Northam is pleased to advise its shareholders that mining operations at the Kukama shaft situated at its Eland mine complex will recommence in the new financial year (F2020).


Thumbs-up for Kukama project

Johannesburg, 26 June 2019. Northam is pleased to advise its shareholders that mining operations at the Kukama shaft situated at its Eland mine complex will recommence in the new financial year (F2020).

This significant development comes after the successful conclusion of a feasibility study for the Kukama project.

Background

Northam purchased a 100% interest in the Eland mine from Glencore Operations South Africa Proprietary Limited in February 2017 for a cash consideration of R175 million. Eland mine was placed on care and maintenance in 2015 and Northam continued to manage it as such whilst undertaking the feasibility study for the Kukama shaft.

In terms of the transaction, Northam acquired all of Eland mine’s assets which included:

  • Eland’s two mining rights with a resource currently estimated at 19.3 Moz 4E at an average in situ grade of 3.95 g/t;
  • surface and underground infrastructure including a concentrator with a nameplate capacity of 250 ktpm; a chrome spiral recovery plant; a tailings storage facility; two decline systems; and surface support infrastructure;
  • immovable property; and
  • a mining fleet in excess of 100 vehicles, which includes low profile mechanised mining equipment.

Key conclusions from the Kukama shaft feasibility study

  • Steady state production of 150Koz pa 4E, at unit costs in the lower half of the industry cost curve.
  • Forecast investment returns comfortably in excess of Northam’s current weighted average cost of capital.
  • Forecast positive free cash flow generated from year 4 onwards.
  • Creation of 2 800 permanent jobs.
  • Life of mine in excess of 30 years.

Current status of Eland mine

To date, Northam has continued to manage the Eland mine on care and maintenance whilst undertaking the feasibility study for the Kukama shaft.

Whilst completing the feasibility study for Kukama shaft and following positive feedback from the study, Northam commenced early work in preparation for its recommissioning. This includes refurbishing underground fixed and mobile equipment, as well as certain sections of the concentrator. Processing of the tailings storage facility at Eland mine has also commenced, which facilitated recommissioning of the surface plant and associated infrastructure.

The next steps

Conversion of the Kukama decline shaft into a footwall array will start in F2020, along with limited early stoping. Strike development and stoping build-up is scheduled to commence in F2021. Production is forecast to reach 100Koz pa 4E by 2025 and steady state production of 150Koz pa 4E is forecast from 2029.

Capital expenditure

Total developmental capital expenditure is estimated at R2.2 billion over a five-year period, in nominal terms (F2019 terms: R1.9 billion), which includes a provision for working capital requirements during the development phase. The project will be fully funded from Northam’s own resources.

Conclusion

Northam chief executive Paul Dunne points to the positive investment return demonstrated by the Kukama project, which comfortably exceeds the company’s weighted average cost of capital. “In addition,” says Dunne, “the project further diversifies the group’s operations and production capacity and does so efficiently by utilising an extensive existing capital footprint. Kukama is a project that lends itself to scaling up or down and will form the production base for the broader Eland complex.The mining method to be implemented at Kukama is well-known and well proven.  Our focus will be on safe, quality, long-life production, whilst creating sustainable long-term employment in the platinum industry.”

Presentation

Paul Dunne and the Northam team will be presenting to members of the investment community today, Wednesday 26 June in Johannesburg on latest growth developments in the group. The presentation will be webcast at 11:00 and will be accessible on the Northam website at www.northam.co.za.

Issued by

R&A Strategic Communications, Johannesburg,
Tel +27 (0)11 880 3924;
Marion Brower +27 71 493 0387
Edith Leeson +27 79 527 6882

Listing of new financial instrument – NHM012

The JSE Limited (“JSE”) has granted approval for the listing of NHM012 Senior Unsecured Floating 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 13 June 2019.


The JSE Limited (“JSE”) has granted approval for the listing of NHM012 Senior Unsecured Floating 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 13 June 2019.

The details pertaining to NHM012 are as follows:

Instrument Type: Senior Unsecured Floating Rate Notes
Total Notes in Issue: ZAR1 825 000 000.00 including this issue
Instrument Code: NHM012
Nominal Amount: ZAR100 000 000.00
Issue Price: 100%
Interest Rate: 3 Month ZAR-JIBAR plus 375 bps, being 10.808% on the first Interest Rate Determination Date (3 Month ZAR-JIBAR as at 11 June 2019 of 7.058% plus 375 bps)
Interest Rate Determination Date(s): 13 June, 13 September, 13 December and 13 March of each year (or the first Business Day of each Interest Period) until the Maturity Date, with the first Interest Rate Determination Date being 11 June 2019
Coupon Rate Indicator: Floating
Issue Date: 13 June 2019
Interest Commencement Date: 13 June 2019
Maturity Date: 13 June 2022
Final Redemption Amount: 100% of Nominal Amount
Last Day to Register: By 17h00 on 2 June, 2 September, 2 December and 2 March of each year until the Maturity Date
Books Close Period: 3 June, 3 September, 3 December and 3 March of each year until the Maturity Date
Interest Payment Date(s): 13 June, 13 September, 13 December and 13 March of each year until the Maturity Date
ISIN No: ZAG000160136
Business Day Convention: Following Business Day
Other: The applicable pricing supplement (“APS”) contains additional terms and conditions to the terms and conditions as contained in the Programme Memorandum, dated 3 August 2012, (“Terms and Conditions”)
Summary of additional terms and conditions: The additional terms and conditions pertain to the applicable guarantee and the amendment of Condition 16.1 (Senior Notes) by including additional Events of Default in terms of Condition 16.1.1.9 (Other) of the Terms and Conditions. Investors should refer to Appendix “A” of the APS for full details of the additional terms and conditions, available on Northam’s website: https://www.northam.co.za/downloads/send/96-files/1179-applicable-pricing-supplement-nhm012

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

Johannesburg
12 June 2019

Arranger, Dealer and Debt Sponsor
One Capital

Attorneys to Northam in respect of the Notes
Bowman Gilfillan Inc

Interest payment notification and full capital redemption – NHM003

Northam bondholders (bondholders) are advised of the following interest payment due on Monday, 10 June 2019.


Northam bondholders (bondholders) are advised of the following interest payment due on Monday, 10 June 2019.

Bond Code NHM003
ISIN No ZAG000129032
Coupon 11.050%
Interest Period 11 March 2019 to 9 June 2019
Interest Amount Due R6 887 328.77
Payment Date 10 June 2019
Date Convention Modified Following Business Day

Bondholders are further advised, in accordance with the Terms and Conditions of the Northam Platinum Limited ZAR2 000 000 000 domestic Medium Term Note Programme dated 3 August 2012, of the full capital redemption of the NHM003 note effective Monday, 10 June 2019.

Note Capital Redemption Amount Amount Outstanding after the Capital Redemption
NHM003 R250 000 000.00 R0.00

 

05 June 2018

Debt Sponsor
One Capital