Announcements 2021
- 11 Mar 2021
Renewal of cautionary announcement
Northam shareholders (“shareholders”) are referred to the cautionary announcement published on SENS on Monday, 2 November 2020, and the subsequent renewals thereof published on SENS on Monday, 14 December 2020 and Thursday, 28 January 2021, wherein shareholders were advised that Northam and Zambezi Platinum (RF) Limited (“Zambezi Platinum”) had entered into discussions regarding a potential transaction to accelerate the maturity of the empowerment transaction concluded between Northam and Zambezi Platinum in May 2015, whilst maintaining Northam’s broad-based black economic empowerment ownership (“potential transaction”).
Northam shareholders (“shareholders”) are referred to the cautionary announcement published on SENS on Monday, 2 November 2020, and the subsequent renewals thereof published on SENS on Monday, 14 December 2020 and Thursday, 28 January 2021, wherein shareholders were advised that Northam and Zambezi Platinum (RF) Limited (“Zambezi Platinum”) had entered into discussions regarding a potential transaction to accelerate the maturity of the empowerment transaction concluded between Northam and Zambezi Platinum in May 2015, whilst maintaining Northam’s broad-based black economic empowerment ownership (“potential transaction”).
Shareholders are advised that discussions between Northam and Zambezi Platinum regarding the potential transaction are ongoing and if successfully concluded, the potential transaction may have a material effect on the price of Northam’s securities. Accordingly, shareholders are advised to continue exercising caution when dealing in Northam’s securities until a further announcement is published.
Johannesburg
11 March 2021
Corporate Advisor, Sponsor and Debt Sponsor to Northam
One Capital
Attorneys to Northam
Webber Wentzel
- 11 Mar 2021
Northam increases its holding of Zambezi preference shares to 87.5% by acquiring an additional R1.1 billion of Zambezi preference shares
Northam shareholders (“shareholders”) are referred to the announcement dated 8 December 2020 (“previous announcement”) pertaining to the acquisition by Northam of preference shares in Zambezi Platinum (RF) Limited (“Zambezi”), (“Zambezi preference shares”).
- INTRODUCTION
- RATIONALE FOR THE ACQUISITION
- SMALL RELATED PARTY TRANSACTION AND FAIRNESS OPINION
- DETAILS OF THE ZAMBEZI PREFERENCE SHARES
Northam shareholders (“shareholders”) are referred to the announcement dated 8 December 2020 (“previous announcement”) pertaining to the acquisition by Northam of preference shares in Zambezi Platinum (RF) Limited (“Zambezi”), (“Zambezi preference shares”).
Northam is pleased to announce that, since the date of the previous announcement, it has acquired 1 525 728 Zambezi preference shares and has agreed to acquire a further 9 876 775 Zambezi preference shares from a material shareholder as further detailed in paragraph 3 below, in aggregate amounting to 11 402 503 Zambezi preference shares and representing a total cash consideration of approximately R1.1 billion (“acquisition”). Following implementation of the acquisition, Northam will hold 139 972 496 Zambezi preference shares, representing approximately 87.5% of all Zambezi preference shares in issue.
As stated in the previous announcement, 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 in favour of the holders of Zambezi preference shares (“Guarantee”). Furthermore, should Zambezi 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.
Northam reached an agreement with the Public Investment Corporation SOC Limited (“PIC”) to acquire 9 876 775 Zambezi preference shares from the PIC today, 11 March 2021, at a price of R97.84 per Zambezi preference share, for a total cash consideration of approximately R966.3 million (“related party acquisition”).
The related party acquisition is not subject to any conditions precedent and will be fully funded from Northam’s internal cash resources.
The PIC is a “material shareholder” of Northam as defined in the JSE Limited Listings Requirements (“Listings Requirements”), in that, within the preceding 12 months, it has been able to exercise or control the exercise of votes in respect of 10% or more of the Northam shares in issue. Accordingly, the PIC is a related party to Northam as contemplated in paragraph 10.1(b)(i) of the Listings Requirements and the related party acquisition is categorised as a “small related party transaction” in terms of paragraph 10.7 as read with paragraph 10.8 of the Listings Requirements.
In terms of paragraph 10.7 of the Listings Requirements, the related party acquisition is not subject to shareholder approval, provided that an independent professional expert confirms that the terms of the related party acquisition are fair as far as shareholders are concerned. Northam has appointed BDO Corporate Finance Proprietary Limited (“BDO”) as the independent professional expert for purposes of providing an opinion in respect of the fairness of the related party acquisition (“fairness opinion”).
BDO has considered the terms and conditions of the related party acquisition and is of the opinion that the related party acquisition 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.
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 by the Guarantee and if the Guarantee is called upon, Northam will, at its election, settle the associated liability using cash and / or through the issue of new Northam shares.
As reported in the annual financial statements of Northam for the year ended 30 June 2020, the Zambezi preference share liability amounted to approximately R8.3 billion and the accumulated preference share dividends for the financial year amounted to approximately R1.1 billion. As mentioned above, the acquisition by Northam of Zambezi preference shares will further reduce the Zambezi preference share liability and accumulated preference share dividends which are recognised in Northam’s consolidated financial statements. The accounting policies adopted by Northam in the preparation of its annual financial statements are in accordance with the International Financial Reporting Standards.Johannesburg
11 March 2021
Corporate Advisor, Sponsor and Debt Sponsor to Northam
One Capital
Attorneys to Northam
Webber Wentzel
Independent Professional Expert to Northam
BDO Corporate Finance Proprietary Limited
- 10 Mar 2021
Interest payments notification – NHM012 AND NHM015
Northam bondholders are advised of the following interest payments due on Monday, 15 March 2021:
Northam bondholders are advised of the following interest payments due on Monday, 15 March 2021:
Bond Code: | NHM012 |
ISIN: | ZAG000160136 |
Coupon: | 7.35% |
Interest Period: | 14 December 2020 to 14 March 2021 |
Interest Amount Due: | R9 575 916.29 |
Payment Date: | 15 March 2021 |
Date Convention: | Following Business Day |
Bond Code: | NHM015 |
ISIN: | ZAG000164922 |
Coupon: | 6.9% |
Interest Period: | 14 December 2020 to 14 March 2021 |
Interest Amount Due: | R8 601 369.86 |
Payment Date: | 15 March 2021 |
Date Convention: | Following Business Day |
Johannesburg
10 March 2021
Debt Sponsor
One Capital
- 09 Mar 2021
Listing of tap issue – NHM016
The JSE Limited (“JSE”) has granted approval for the listing of a tap issuance of Senior Unsecured Floating Rate Notes under series NHM016 (“Notes”), issued under the Northam Platinum Limited ZAR15 000 000 000 Domestic Medium Term Note Programme, dated 29 October 2020, as amended and/or supplemented from time to time (“Programme”), as guaranteed by Booysendal Platinum Proprietary Limited, with effect from 10 March 2021.
The JSE Limited (“JSE”) has granted approval for the listing of a tap issuance of Senior Unsecured Floating Rate Notes under series NHM016 (“Notes”), issued under the Northam Platinum Limited ZAR15 000 000 000 Domestic Medium Term Note Programme, dated 29 October 2020, as amended and/or supplemented from time to time (“Programme”), as guaranteed by Booysendal Platinum Proprietary Limited, with effect from 10 March 2021.
The details pertaining to the tap issuance of the NHM016 series are as follows:
Instrument Type: | Senior Unsecured Floating Rate Notes |
Total Notes in Issue: | ZAR7 228 815 839 including this issue |
Instrument Code | NHM016 |
Tranche Number: | 5 |
Nominal Amount: | ZAR100 000 000 |
Issue Price: | 100.58379% |
Interest Rate: | 3 Month ZAR-JIBAR plus 425 bps per annum |
Interest Rate Determination Date(s): | 11 August, 11 November, 11 February, and 11 May (or the first Business Day of each Interest Period) of each year until the Maturity Date |
Coupon Rate Indicator: | Floating |
Issue Date: | 10 March 2021 |
Interest Commencement Date: | 11 February 2021 |
Maturity Date: | 11 May 2025 |
Final Redemption Amount: | 100% of Nominal Amount |
Last Day to Register: | By 17h00 on 31 July, 31 October, 31 January and 30 April of each year until the Maturity Date or if such day is not a Business Day, the Business Day before each Books Closed Period |
Books Closed Period: | 1 August to 10 August, 1 November to 10 November, 1 February to 10 February and 1 May to 10 May of each year until the Maturity Date (all dates inclusive), or if any early redemption occurs, 10 Days prior to the actual Redemption Date |
Floating Interest Payment Date(s): | 11 August, 11 November, 11 February, and 11 May of each year until the Maturity Date, or, if such day is not a Business Day, the Business Day on which interest will be paid, as determined in accordance with the Applicable Business Day Convention |
International Securities Identification Number (ISIN): | ZAG000167750 |
Business Day Convention: | Following Business Day |
Other: | The applicable pricing supplement (“APS”) does not contain additional terms and conditions to the Terms and Conditions as contained in the Programme. The APS is available on Northam’s website: https://www.northam.co.za/downloads/send/96-files/1340-applicable-pricing-supplement-nhm016 |
The Notes will be immobilised in the Central Securities Depository (CSD) and settlement will take place electronically in terms of JSE Rules.
Johannesburg
9 March 2021
Sole Arranger, Dealer and Debt Sponsor to Northam in respect of the Programme
One Capital
Attorneys to Northam, the Arranger and the Dealer in respect of the Programme
Bowman Gilfillan Inc.
- 23 Feb 2021
Interest payment notification – NHM017
Northam bondholders are advised of the following interest payment due on Friday, 26 February 2021:
Northam bondholders are advised of the following interest payment due on Friday, 26 February 2021:
Bond Code: | NHM017 |
ISIN No: | ZAG000167891 |
Coupon: | 5.808% |
Interest Period: | 26 November 2020 to 25 February 2021 |
Interest Amount Due: | R40 990.16 |
Payment Date: | 26 February 2021 |
Date Convention: | Following Business Day |
Johannesburg
23 February 2021
Debt Sponsor
One Capital
- 22 Feb 2021
Interest payments notification – NHM018, NHM019 AND NHM020
Northam bondholders are advised of the following interest payments due on Thursday, 25 February 2021:
Northam bondholders are advised of the following interest payments due on Thursday, 25 February 2021:
Bond Code: | NHM018 | ||
ISIN: | ZAG000168097 | ||
Coupon: | 7.108% | ||
Interest Period: | 25 November 2020 to 24 February 2021 | ||
Interest Amount Due: | R22 830 428.62 | ||
Payment Date: | 25 February 2021 | ||
Date Convention: | Following Business Day |
Bond Code: | NHM019 | |
ISIN: | ZAG000168105 | |
Coupon: | 7.358% | |
Interest Period: | 25 November 2020 to 24 February 2021 | |
Interest Amount Due: | R15 578 801.10 | |
Payment Date: | 25 February 2021 | |
Date Convention: | Following Business Day |
Bond Code: | NHM020 | |
ISIN: | ZAG000172594 | |
Coupon: | 7.1% | |
Interest Period: | 25 November 2020 to 24 February 2021 | |
Interest Amount Due: | R2 362 257.53 | |
Payment Date: | 25 February 2021 | |
Date Convention: | Following Business Day |
Johannesburg
22 February 2021
Debt Sponsor
One Capital
- 19 Feb 2021
Interest payment notification – NHM011
Northam bondholders are advised of the following interest payment due on Wednesday, 24 February 2021:
Northam bondholders are advised of the following interest payment due on Wednesday, 24 February 2021:
Bond Code: | NHM011 |
ISIN: | ZAG000159237 |
Coupon: | 7.1% |
Interest Period: | 24 November 2020 to 23 February 2021 |
Interest Amount Due: | R9 270 071.23 |
Payment Date: | 24 February 2021 |
Date Convention: | Following Business Day |
Johannesburg
19 February 2021
Debt Sponsor
One Capital
- 17 Feb 2021
Interest payment notification – NHM014
Northam bondholders are advised of the following interest payment due on Monday, 22 February 2021:
Northam bondholders are advised of the following interest payment due on Monday, 22 February 2021:
Bond Code: | NHM014 |
ISIN: | ZAG000163650 |
Coupon: | 5.85% |
Interest Period: | 20 November 2020 to 21 February 2021 |
Interest Amount Due: | R29 076 904.11 |
Payment Date: | 22 February 2021 |
Date Convention: | Following Business Day |
Johannesburg
17 February 2021
Debt Sponsor
One Capital
- 16 Feb 2021
Trading statement and trading update H1 FY2021
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 will report an increase in operating profit for the six months ended 31 December 2020 (“H1 F2021”), underpinned by a satisfactory performance from all operations, against the backdrop of the ongoing global COVID-19 pandemic (“COVID-19”).
Production and unit cash costs
A key feature of H1 F2021 has been the positive operational response to the ongoing challenges of COVID-19, whilst maintaining the health and safety of our employees. The strong performance from all the operations has led to the group producing equivalent refined metal comparable to pre-COVID-19 production schedules and at production levels higher than the previous corresponding period.
The group achieved a 15.0% increase in production from own operations at 352 741 oz 4E, compared to 306 738 oz 4E for the period ended 31 December 2019 (“H1 F2020”), notwithstanding the ongoing phased restart of operations, particularly impacting the conventional Zondereinde mine, where only 90% of mining crews have returned to work.
Purchased material decreased by 3.2% to 18 772 oz 4E (H1 F2020: 19 398 oz 4E). The cost of purchased material is determined by ruling commodity prices, resulting in a cost increase of 34.9%.
Group unit cash costs per equivalent refined platinum ounce increased above inflation, primarily due to Eland mine’s production currently being derived from surface sources and purchased at prevailing metal prices.
The table below sets out the unit cash cost for the group and per operation for H1 F2021 compared to H1 F2020:
Unit cash cost | Unit cash cost | ||
H1 F2021 | H1 F2020 | ||
R/Pt oz | R/Pt oz | % variance | |
Group cash cost per equivalent refined platinum ounce | 27 660 | 24 780 | (11.6%) |
Zondereinde cash cost per equivalent refined platinum ounce | 28 473 | 25 890 | (10.0%) |
Booysendal cash cost per platinum ounce in concentrate produced | 20 288 | 18 714 | (8.4%) |
Eland cash cost per platinum ounce in concentrate produced | 39 476 | 29 227 | (35.1%) |
The key production measures for H1 F2021 compared to H1 F2020 are summarised in the table below:
Equivalent refined production | Equivalent refined production | ||
H1 F2021 | H1 F2020 | ||
oz 4E | oz 4E | % variance | |
Production from Zondereinde | 166 773 | 162 380 | 2.7% |
Production from Booysendal | 165 864 | 128 876 | 28.7% |
Production from Eland | 20 104 | 15 482 | 29.9% |
Total production from own operations | 352 741 | 306 738 | 15.0% |
Purchased material | 18 772 | 19 398 | (3.2%) |
Total production | 371 513 | 326 136 | 13.9% |
Sales
Sales volumes during the period under review were adversely affected by the impact of factors arising as a result of COVID-19, in particular the negative effect on metal transport logistics during the last quarter of the previous financial year. Previously reported production losses, together with logistical hurdles, including border closures, resulted in reduced metal volumes sent to Northam’s refiner in Germany which created a refining backlog. This in turn impacted available metal for sale during the period under review, due to the restocking of the inventory pipeline. As a result of the varying refining lead times affecting individual platinum group metals, the impact was predominantly experienced in respect of rhodium.
The resultant lower contribution of rhodium to overall sales during the period, distorted the average realised basket price achieved during H1 F2021 and consequently reduced cash inflows reported during the period. Excess rhodium in the pipeline will be released in the ordinary course of business and the relative contribution of rhodium to sales is expected to normalise during the course of the remainder of the current financial year.
Despite the adverse COVID-19 related impact on sales volumes, sales revenue increased by 51.9% from R7.8 billion in H1 F2020 to R11.9 billion for the period under review. This increase is attributable to a 49.7% increase in the average 4E basket price to USD2 160/oz (H1 F2020: USD1 443/oz), a 9.0% weaker ZAR/USD exchange rate realised and a 4.4% decrease in refined 4E ounces sold, for the reasons stated above.
Total revenue per platinum ounce sold increased by 53.8% to R61 307/Pt oz (H1 F2020: R39 864/Pt oz), resulting in a cash profit margin per platinum ounce in excess of 50%.
Total refined volumes remained marginally unchanged at 322 170 oz 4E (H1 F2020: 319 264 oz 4E).
The table below details the despatched metal volumes to Northam’s precious metal refiner, compared to the refined metal volumes and sales volumes, in respect of the period under review:
Despatched | Refined | Sales | Average sales prices achieved | |
oz | oz | oz | USD/oz | |
Platinum | 202 000 | 197 896 | 193 859 | 934 |
Palladium | 100 500 | 98 843 | 96 854 | 2 296 |
Rhodium | 30 000 | 21 097 | 20 268 | 13 296 |
Gold | 4 200 | 4 334 | 4 339 | 1 895 |
Total oz 4E | 336 700 | 322 170 | 315 320 | 2 160 |
Total refined metal sold in H1 F2020 amounted to 307 312 oz 4E.
Financial results
The group’s financial results were impacted by lower sales volumes relative to actual production, which in turn impacted operating profit, the cash position of the group and therefore the net debt position as at 31 December 2020.
The combination of lower refined sales volumes and increased production resulted in a 25.5% increase in inventory on hand, to 276 235 oz 4E (F2020: 220 172 oz 4E on hand).
During the period under review, the group generated R1.9 billion in free cash flow, which was applied towards further purchases of Zambezi Platinum (RF) Limited (“Zambezi”) preference shares. 74 974 739 Zambezi preference shares were acquired during H1 F2021 at a premium to face value (being the difference between the face value of the Zambezi preference shares and the price that Northam paid, together with transaction costs incurred on the purchases of these Zambezi preference shares), which resulted in a once off loss on derecognition of the Zambezi preference share liability of R0.9 billion.
The table below provides the key financial features of H1 F2021, compared to H1 F2020:
H1 F2021 | H1 F2020 | % variance | |
Basic earnings per share (cents) | 583.5 – 616.3 | 328.0 | 77.9% - 87.9% |
Headline earnings per share (cents) | 583.5 – 616.3 | 328.3 | 77.7% - 87.7% |
Normalised headline earnings per share (cents) | 623.0 – 660.0 | 369.6 | 68.6% - 78.6% |
Number of shares in issue including treasury shares | 509 781 212 | 509 781 212 | − |
Weighted average number of shares* | 349 875 759 | 349 875 759 | − |
*Used to determine the basic and headline earnings per share, calculated as 509 781 212 shares in issue less 159 905 453 shares held by Zambezi. Zambezi is Northam’s major empowerment shareholder and Zambezi’s financial results are consolidated into the group’s financial results.
Capital expenditure
Capital expenditure reduced to R1.3 billion (H1 F2020: R1.4 billion). This is the combined result of capital trimming following the onset of COVID-19, together with capital projects having either been completed, or nearing completion at Booysendal mine. R918.1 million (H1 F2020: R1.2 billion) was spent on expansionary capital expenditure and R380.5 million (H1 F2020: R200.5 million) on sustaining capital expenditure.
Projects that were temporarily scaled back include - the Central Merensky module at Booysendal mine; aspects of the number 3 shaft project at Zondereinde mine; and the stoping build-up at Eland mine. Following greater market certainty developing during the second half of 2020, all curtailed growth projects were re-initiated in October 2020 and the majority of stoppage impacts have been clawed back. As such, the overall impact on the group’s growth strategy will be minimal.
Group capital expenditure for F2021 is forecast to amount to R3.0 billion. However, the potential for further disruption to operations and the metal markets as a result of COVID-19 remains. We continue to monitor the market and will amend our capital program where and when prudent.
The group continues to execute on its strategy of developing low-cost, long-life assets in order to position itself at the lower end of the industry cost curve. We believe that the development of our project pipeline which builds on our pre-existing and acquired asset base is bearing fruit and will continue to position Northam to deliver a strong operational and financial performance.
Acquisition of Zambezi preference shares
Northam’s strategy of returning value to shareholders remains unchanged and Northam believes that, to date, the most efficient mechanism to return value to Northam’s shareholders has been through the purchase of Zambezi preference shares.
The acquisition of the Zambezi preference shares reduces the preference share dividend expense and liability included in Northam’s consolidated financial results, as well as Northam’s potential financial exposure under the guarantee provided to holders of Zambezi preference shares, should the guarantee be called upon. Furthermore, in the event that Zambezi elects to redeem the Zambezi preference shares through a distribution of Northam ordinary 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.
During H1 F2021, Northam continued to purchase Zambezi preference shares and held 128 569 993 Zambezi preference shares at 31 December 2020, representing c.80.4% of all Zambezi preference shares in issue. During the period under review Northam acquired 74 974 739 Zambezi preference shares for a consideration of R6.9 billion, which was financed by means of internally generated cash, the issue of R1.5 billion worth of Domestic Medium-Term Notes and draw downs on the revolving credit facility, increasing the net debt position of the group to R8.8 billion as at 31 December 2020 (F2020: R3.3 billion).
To date, purchases of Zambezi preference shares have amounted to R10.9 billion. The average premium paid on these purchases amounts to 8.4% (expressed as a percentage to face value, being the capital amount and all accrued Zambezi preference share dividends, calculated on the date of each acquisition).
Northam achieving more than 80% ownership of the Zambezi preference shares represents a significant step in the pursuit of the company’s previously stated intention to accelerate the maturity of the empowerment transaction concluded between Northam and Zambezi in May 2015, as announced on 2 November 2020.
Conclusion
In summary, whilst the COVID-19 pandemic and its wide-ranging knock-on effects adversely impacted sales and the metal in pipeline during the period under review, the underlying operations have performed well.
The financial information contained in this announcement has not been reviewed or reported on by Northam’s auditors. The reviewed results for the six months ended 31 December 2020 are expected to be published on or about 19 March 2021.
Johannesburg
16 February 2021
Sponsor and Debt Sponsor
One Capital
- 08 Feb 2021
Interest payment notification – NHM016
Northam bondholders are advised of the following interest payment due on Thursday, 11 February 2021:
Northam bondholders are advised of the following interest payment due on Thursday, 11 February 2021:
Bond Code: | NHM016 |
ISIN: | ZAG000167750 |
Coupon: | 7.583% |
Interest Period: | 11 November 2020 to 10 February 2021 |
Interest Amount Due: | R19 991 893.86 |
Payment Date: | 11 February 2021 |
Date Convention: | Following Business Day |
Johannesburg
8 February 2021
Debt Sponsor
One Capital