Trading statement and general update
Shareholders are advised that the group’s earnings and headline earnings per share for the year ended 30 June 2013 are estimated to be between 60% and 70% higher than in the previous comparable period. Earnings per share of 81.2 cents and headline earnings per share of 80.9 cents were reported for the year ended 30 June 2012.
The anticipated increase in earnings reflects, inter alia, higher sales volumes, coupled with a higher average basket price realised during the period under review, in comparison with the previous comparable period, notwithstanding certain production interruptions experienced during the financial year (as notified to Shareholders in previous announcements).
The weighted average number of shares in issue during the year ended 30 June 2013 was 382 560 902, compared to 382 426 483 shares in issue during the year ended 30 June 2012.
This information contained in this trading statement has not been reviewed or reported on by the group’s auditors.
It is anticipated that the reviewed preliminary results for the year ended 30 June 2013 will be released on or about 15 August 2013.
The Booysendal mine was successfully commissioned by 30 June 2013 and commercial production commenced with effect from 1 July 2013. During the commissioning phase that occurred prior to 30 June 2013, approximately 15 000 oz (3PGE+Au) were produced and some 3 500 oz were sold, the proceeds of which were capitalised.
At 30 June 2013 Booysendal had a stockpile of approximately 400 000 tonnes. Northam estimates that design capacity of 150 000 mill tonnes per month should be achieved during the second half of calendar year 2015.
Zondereinde smelter update
Shareholders are referred to the announcements published on 16 and 23 May 2013, respectively, regarding the rebuild of the Zondereinde smelter. The smelter rebuild is progressing in accordance with the planned operational procedures to complete this process and during the rebuild period, a third party is toll treating Zondereinde’s production.
The total estimated direct cost of the smelter rebuild is approximately R55 million and these costs overlap the financial years ended 30 June 2013 and ending 30 June 2014. The aforesaid cost estimate does not include working capital fluctuations attributable to the rebuild and excludes the opportunity costs, including interest associated with toll treatment of production. This cost estimate has not been reviewed or reported on by the Company’s auditors.
Update on Domestic Medium Term Note Programme (“DMTN Programme”) and funding arrangements
Northam successfully executed a R120 million tap issue in terms of its existing DMTN Programme during July 2013. Following this issue, Northam has a capital amount of R1 370 million in issue in terms of the DMTN Programme. All these notes mature on 4 September 2015.
In addition to the debt funding from the DMTN Programme, Northam has a R1 billion revolving credit facility (“RCF”).
General industry outlook
Northam’s operations remain vulnerable to, inter alia, factors affecting the South African general mining industry and, in particular, the platinum sector. At the time of this announcement and for the foreseeable short to medium term, the South African mining industry remains engaged in industry wide wage negotiations, as frequently reported on in the public domain and through press commentary. Should such wage negotiations result in industrial action, Northam’s operations may be affected. Northam therefore remains cautious about production and other estimates, until such time as clarity in the mining industry in general and in respect of Northam’s operations specifically has been achieved.
8 August 2013
Russell & Associates
Tel +27 11 880 3924