JOHANNESBURG,
March 28, 2013 /CNW/ - Atlatsa
Resources Corporation ("Atlatsa" or the "Company") (TSXV: ATL; NYSE
MKT: ATL; JSE: ATL) announces its operating and financial results
for the three and twelve months ended December 31, 2012. This release should be read
together with the Company's Financial Statements, Management
Discussion & Analysis and Form 20-F currently filed on
www.atlatsaresources.co.za and www.sedar.com. Currency values are
presented in South African Rand (ZAR), Canadian Dollars ($) and
United States Dollars (US$).
The 2012 financial year brought with it many
changes for the Company, including:
- The appointment of a new management team at Bokoni Platinum
Mines ("Bokoni Mine") effective February
2012
- Significant operational and financial improvements demonstrated
in Q2 2012 and Q3 2012
- Q4 2012 being negatively impacted by unprotected strike action
at Bokoni Mine, which resulted in almost no production for the
fourth quarter, and consequently having a negative impact on the
operational and financial performance for the Company in the
financial year under review;
- The completion of a strategic review at the Bokoni Mine
operations, culminating in an agreement between Atlatsa and Anglo
American Platinum relating to a Revised Restructure Plan for
Atlatsa and the Bokoni Group of Companies, which results in a much
improved financial and operational outlook for Atlatsa going
forward.
Operating and financial performance
After a stellar performance by the new
management team appointed at Bokoni Mine which resulted in
quarter-on-quarter improvements of approximately 15% on all key
measuring metrics, Bokoni Mine was negatively impacted by an
unprotected strike resulting in almost no production at the
operations during Q4 2012. A summary of the unprotected strike and
its impact is set out below.
Unprotected strike
On October 1,
2012, employees at the Bokoni Mine embarked on unprotected
strike action, as part of an industry-wide strike contagion.
Employees who participated in the strike action
were not paid during this period. Following numerous unsuccessful
efforts to resolve the situation, all striking employees
(approximately 2,300 people) were dismissed on November 8, 2012. Following interventions from
community leaders and other interested and affected parties,
dismissed employees were provided with an opportunity to be
re-instated if they returned to work by December 7, 2012. An agreement was reached with
the three recognised unions at the Bokoni Mine - National Union of
Mineworkers ("NUM"), United Association of South Africa ("UASA") and Togetherness
Amalgamated Workers Union of South
Africa ("TAWUSA") - allowing for employees to return to work
on the following basis:
- re-instatement of dismissed employees,
- $234.4 (ZAR2,000) signing bonus payment; and
- implementation of a $46.9
(ZAR400) monthly travelling allowance
to qualifying employees.
Employees were re-instated on December 7,
2012.
A summary of financial losses incurred due to the unprotected
strike are as follows:
- damage to property and assets - $1.1
million(ZAR9.4 million);
- extraordinary costs incurred such as legal fees, security costs
and overtime for essential services amounting to $3.2 million (ZAR27.1
million);
- Estimated lost revenue at Bokoni Mine relating to approximately
35,500 PGM oz (4E) of production in Q4 2012, plus certain
operational costs associated with maintaining essential services as
well as the extraordinary costs described above.
Set out below are summaries of the key operating
and financial results for Bokoni Mine and the Company for the
periods under review.
Operating results |
Q4
2012 |
Q4
2011 |
%
Change |
2012 |
2011 |
%
Change |
Tonnes milled |
T |
6,319 |
257,621 |
(98%) |
863,675 |
1,047,401 |
(18%) |
Recovered grade |
g/t milled,4E |
4.58 |
4.08 |
12% |
4.21 |
3.86 |
9% |
4E oz produced |
Oz |
2,045 |
29,316 |
(93%) |
102,671 |
113,625 |
(10%) |
UG2 mined to total output |
% |
- |
36.4 |
(100%) |
34.07 |
32.6 |
5% |
Primary development |
M |
- |
2,875 |
(100%) |
7,550 |
10,549 |
(28%) |
Capital expenditure |
$m |
5.5 |
4.8 |
15% |
38.9 |
28.7 |
36% |
Operating cost/tonne milled |
ZAR/t |
N/A |
1,285 |
(3,071%) |
1,535 |
1,194 |
(29%) |
Operating cost/4E oz |
ZAR/4E oz |
N/A |
11,292 |
(1,015%) |
12,902 |
11,009 |
(17%) |
Lost-time injury frequency
rate ("LTIFR") |
Per 200,000
hours worked |
- |
2.41 |
100% |
0.93 |
1.87 |
50% |
Total permanent labor
(mine operations) |
Number |
3,479 |
3,498 |
(1%) |
3,479 |
3,498 |
(1%) |
Total contractors
(mine operations) |
Number |
1,553 |
1,826 |
(15%) |
1,553 |
1,826 |
(15%) |
Consolidated statement of
comprehensive income summary |
Expressed in Canadian Dollars (000's) |
Q4 2012 |
Q4 2011 |
FY 2012 |
FY 2011 |
Revenue |
809 |
32,514 |
117,557 |
144,407 |
Cash operating costs |
27,282 |
41,722 |
158,388 |
167,997 |
Cash operating (loss)/profit* |
(26,473) |
(9,208) |
(40,831) |
(23,590) |
Operating margin |
(3,272%) |
(28%) |
(35%) |
(16%) |
EBITDA |
(46,799) |
(12,834) |
35,545 |
(46,008) |
Loss after tax |
(63,684) |
(35,519) |
(95,567) |
(147,865) |
Non-controlling interest |
(20,023) |
(15,997) |
(76,849) |
(65,936) |
Loss attributable to Atlatsa shareholders |
(43,660) |
(19,522) |
(18,718) |
(81,929) |
Basic and diluted loss per share - cents |
10 |
4 |
4 |
19 |
*Cash operating profit/(loss) before
depreciation and amortization |
Safety
It is with deep regret that the Company reports
that Mr Zimele Gwantshu was fatally injured in an accident on
14 February, 2012 at UM2 shaft,
following a fall of ground incident.
Pleasingly, group LTIFR improved significantly
to 0.93 per 200,000 hours in 2012 from 1.87 in 2011. Positive
engagement with the South African Department of Mineral Resources
on safety matters has continued.
Operational results
All key operating metrics at Bokoni Mine showed
significant improvements under the new management team during Q2
2012 and Q3 2012, where a positive production trend had started to
develop. Unfortunately all of these efforts, when measured on an
annual basis, were marred by the negative impacts of the
unprotected strike during Q4 2012.
The most notable improvements achieved at the
operations during 2012 included material improvements in mining
efficiency, feed grades and plant recoveries through a much
improved performance at the Bokoni Concentrator plant, all of which
resulted in a 9% year-on-year improvement in recovered grade.
Operational efficiencies also improved through
the introduction of a number of new management initiatives,
including an amended bonus system, adjusted crew size compositions,
variable pay and leave cycles.
Encouragingly, the production start up at Bokoni
Mine after the unprotected strike in Q1 2013 has gone better than
anticipated, with production having normalised immediately after
the year-end break in January
2013.
Financial results
Revenue for FY 2012 was $117.6 million (ZAR963.6
million) (FY 2011: $144.4
million (ZAR1,055.6 million)).
The unprotected strike had a significant negative influence in
revenue.
The average PGM basket price achieved for FY
2012 was US$1,221/oz (ZAR9,978/oz), representing a 12% decrease on FY
2011 at US$1,380/oz (ZAR10,028/oz). The average ZAR to $ exchange rate
achieved for FY 2012 was ZAR8.19=$1 (FY
2011: ZAR7.33=$1).
Cash operating costs for FY 2012 decreased to
$158.4 million (ZAR1,298.3 million) from $167.9 million (ZAR1,230.7
million) in FY 2011, primarily attributable to the
unprotected strike at Bokoni Mine.
From Q1 to Q3 2012 the mine achieved a decrease
in ZAR/4E unit costs of 23%.
Revised Restructure Plan
Subsequent to year-end, on March 27, 2013, the Company announced that it had
entered into a ZAR3.5 billion
(US$ 380 million) Revised Restructure
Plan with Anglo American Platinum, which will have a material
positive impact on the Company's operational and financial outlook
going forward.
Upon implementation of the Revised Restructure
Plan, Atlatsa and the Bokoni group will be well positioned to
implement their business strategy on a more conservative, lower
risk and sustainable basis. The Revised Restructure Plan retains
most of the elements agreed between the Parties in the Initial
Restructure Plan announced on 2 February,
2012 and improves on the Initial Restructure Plan as
follows:
- A new and more conservative operating and financing plan for
Bokoni Mine through to 2020.
- An simplification to the equity capital structure of Atlatsa
which results in:
-
- an equity capital injection into Atlatsa of ZAR 750 million ($
87.9million) by Anglo American Platinum subscribing for 125
million new common shares in Atlatsa at ZAR
6.00 per share (US$0.71 cps),
the proceeds of which will be used to further reduce Atlatsa's
outstanding debt;
- the unwinding of the historical "B" preference share
arrangement, such that Atlatsa will have one class of common shares
going forward; and
- an increase in the BEE shareholding in Atlatsa from 51% to 62%
(fully diluted), facilitated by Anglo American Platinum selling
115.8 million Atlatsa common shares, arising from the unwind of the
"B" preference shares, to Atlatsa Holdings for ZAR 463 million ($ 54.27
million) on a vendor-financed basis.
- An amendment to the debt capital structure and financing terms
of Atlatsa, which results in the following revisions to the
existing debt facility between Atlatsa and Anglo American
Platinum:
-
- a 75% reduction in Atlatsa's attributable debt from
ZAR 3.28 billion ($ 384.87 million) to approximately ZAR 833 million ($ 97.66
million), as at 31 December
2012;
- an increase in the existing debt facility by ZAR 700 million ($ 82.06
million) made available to Atlatsa to finance its 51% pro
rata share of the planned expansion at Bokoni Mine through to 2020
with a maximum facility limit of ZAR1.55
billion ($181.71million);
and
- a reduction in Atlatsa's estimated effective cost of borrowing
from 13% to 2% over the debt term period between 2013 to 2020.
The implementation of the Revised Restructure
Plan will be subject, inter alia, to the fulfillment or,
where appropriate, waiver of the following conditions
precedent:
- Approval by the shareholders of Atlatsa;
- All of the agreements constituting the Revised Restructuring
Plan becoming unconditional;
- To the extent required, unconditional approval by the
Competition Authorities of South
Africa;
- To the extent required, unconditional approval by the South
African Reserve Bank; and
- Approval of the Transaction by the relevant regulatory
authorities including the TSX Venture Exchange, JSE Limited,
NYSE-MKT, the South African Department of Mineral Resources and
ministerial approval of the transfer of mineral rights.
For additional information on the Revised
Restructure Plan refer to the news releases of Atlatsa dated
February 2, 2012, September 27, 2012 and March 27, 2013 as well as the material change
reports filed on February 13, 2012
and September 27, 2012, all of which
are available at www.sedar.com.
Earnings
Largely as a result of the negative financial
impacts of the unprotected strike at Bokoni Mine, the Company
incurred an operating loss attributable to Atlatsa shareholders of
$18.7 million, a basic and diluted
loss of 4 cents per share, for the
2012 financial year.
The Company recognised a fair value gain at
year-end of $90.6 million arising
from the implementation of phase one of the Revised Restructure
Plan, which took place on 28 September
2012. This had a material positive impact on the Company's
earnings for the period.
The FY 2012 financial statements are prepared on
the basis of accounting policies applicable to a going concern.
This basis presumes that the Revised Restructure Plan described
above is successfully approved by Atlatsa shareholders before
30 June, 2013.
The audit report included in the Company's
Annual Report on Form 20-F ("20-F") contained an opinion from its
independent registered public accounting firm, KPMG Inc., which
included a "going concern" explanatory paragraph. The Company
discusses this matter in Note 2 to the financial statements
included in its 20-F. This press release does not represent any
change or amendment to the Company's financial statements or its
20-F.
Note on cautionary and no conference
call
Atlatsa will not be holding a conference call or
presentation to accompany these results. The Company will resume
detailed shareholder communications in due course.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release. The NYSE Amex has neither
approved nor disapproved the contents of this press release.
Cautionary and forward-looking
information
This document contains "forward-looking
statements" that were based on Atlatsa's expectations, estimates
and projections as of the dates as of which those statements were
made, including statements relating to the Bokoni Group restructure
and refinancing and anticipated financial or operational
performance. Generally, these forward-looking statements can be
identified by the use of forward-looking terminology such as "may",
"will", "outlook", "anticipate", "project", "target", "believe",
"estimate", "expect", "intend", "should" and similar
expressions.
Atlatsa believes that such forward-looking
statements are based on material factors and reasonable
assumptions, including the following assumptions: the Bokoni Mine
will increase or continue to achieve production levels similar to
previous years; the Ga-Phasha, Boikgantsho, Kwanda and Platreef
Projects exploration results will continue to be positive;
contracted parties provide goods and/or services on the agreed
timeframes; equipment necessary for construction and development is
available as scheduled and does not incur unforeseen breakdowns; no
material labour slowdowns or strikes are incurred; plant and
equipment functions as specified; geological or financial
parameters do not necessitate future mine plan changes; and no
geological or technical problems occur.
Forward-looking statements are subject to known
and unknown risks, uncertainties and other factors that may cause
the Company's actual results, level of activity, performance or
achievements to be materially different from those expressed or
implied by such forward-looking statements. These include but are
not limited to:
- uncertainties related to the completion of the Bokoni Group
restructure and refinancing;
- uncertainties and costs related to the Company's exploration
and development activities, such as those associated with
determining whether mineral resources or reserves exist on a
property;
- uncertainties related to feasibility studies that provide
estimates of expected or anticipated costs, expenditures and
economic returns from a mining project;
- uncertainties related to expected production rates, timing of
production and the cash and total costs of production and
milling;
- uncertainties related to the ability to obtain necessary
licenses, permits, electricity, surface rights and title for
development projects;
- operating and technical difficulties in connection with mining
development activities;
- uncertainties related to the accuracy of our mineral reserve
and mineral resource estimates and our estimates of future
production and future cash and total costs of production, and the
geotechnical or hydrogeological nature of ore deposits, and
diminishing quantities or grades of mineral reserves;
- uncertainties related to unexpected judicial or regulatory
proceedings;
- changes in, and the effects of, the laws, regulations and
government policies affecting our mining operations, particularly
laws, regulations and policies relating to:
-
- mine expansions, environmental protection and associated
compliance costs arising from exploration, mine development, mine
operations and mine closures;
- expected effective future tax rates in jurisdictions in which
our operations are located;
- the protection of the health and safety of mine workers;
and
- mineral rights ownership in countries where our mineral
deposits are located, including the effect of the Mineral and
Petroleum Resources Development Act (South Africa);
- changes in general economic conditions, the financial markets
and in the demand and market price for gold, copper and other
minerals and commodities, such as diesel fuel, coal, petroleum
coke, steel, concrete, electricity and other forms of energy,
mining equipment, and fluctuations in exchange rates, particularly
with respect to the value of the U.S. dollar, Canadian dollar and
South African rand;
- unusual or unexpected formation, cave-ins, flooding, pressures,
and precious metals losses (and the risk of inadequate insurance or
inability to obtain insurance to cover these risks);
- changes in accounting policies and methods we use to report our
financial condition, including uncertainties associated with
critical accounting assumptions and estimates; environmental issues
and liabilities associated with mining including processing and
stock piling ore;
- geopolitical uncertainty and political and economic instability
in countries which we operate; and
- labour strikes, work stoppages, or other interruptions to, or
difficulties in, the employment of labour in markets in which we
operate mines, or environmental hazards, industrial accidents or
other events or occurrences, including third party interference
that interrupt the production of minerals in our mines.
For further information on Atlatsa, investors
should review the Company's Annual Report disclosed in the Form
20-F for the year ended December 31,
2012 filed at www.sedar.com and with the United States
Securities and Exchange Commission www.sec.gov and other disclosure
documents that are available at www.sedar.com.
SOURCE Atlatsa Resources Corporation