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PLN
PLN
PLN - Platmin Limited - Condensed Consolidated Interim Financial Statements
for the three and six month periods ended June 30, 2010 and May 31, 2009
Platmin Limited
(A development stage company)
Incorporated in the accordance with the laws of Canada
Registration number: 610178-0
Share code on TSX: PPN
Share code on AIM: PPN
Share code on JSE: PLN
ISIN: CA72765Y1097
Condensed Consolidated Interim Financial Statements
for the three and six month periods ended June 30, 2010 and May 31, 2009
(Unaudited, expressed in United States dollars, unless otherwise stated)
Condensed consolidated interim statement of financial position
as on June 30, 2010
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
Jun 30, May 31,
2010 2009
Notes $ 000 $ 000
ASSETS
Non-current assets
Mining assets 42,980 38,623
Intangible assets 12,286 6,760
470,341 306,889
Property, plant and equipment 5
Loans receivable 51 41
Restricted cash - cash collateral and
guarantees 6 24,553 5,021
Total non-current assets 550,211 357,334
Current assets
Inventories 7 10,962 7,697
Accounts and other receivables 29,926 9,057
135,027 -
Restricted cash 6
Cash and cash equivalents 8 212,931 145,078
Total current assets 388,846 161,832
TOTAL ASSETS 939,057 519,166
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 667,058 425,535
Accumulated deficit (59,274) (40,337)
Other components of equity 90,045 45,204
697,829 430,402
Non-controlling interests (25,026) (17,226)
Total equity 672,803 413,176
Non-current liabilities
Long-term borrowings 3,889 3,310
Finance lease liability 10 8,626 11,642
Decommissioning and rehabilitation provision 11 74,100 21,550
Total non-current liabilities 86,615 36,502
Current liabilities
Trade payables and accrued liabilities 18,236 19,455
Revolving commodity facility 12 2,985 -
Current portion of finance lease liability 10 115 163
Current portion of long-term borrowings 13 26,561 49,870
Convertible debenture 14 131,742 -
Total current liabilities 179,639 69,488
Total liabilities 266,254 105,990
TOTAL EQUITY AND LIABILITIES 939,057 519,166
NATURE OF OPERATIONS AND GOING CONCERN 1
Dec 31, Feb 28,
2009 2009
$ 000 $ 000
ASSETS
Non-current assets
Mining assets 43,454 30,097
Intangible assets 9,348 5,630
422,471 187,843
Property, plant and equipment
Loans receivable 50 35
Restricted cash - cash collateral and guarantees 7,163 2,497
Total non-current assets 482,486 226,102
Current assets
Inventories 9,849 6,943
Accounts and other receivables 28,452 8,506
- -
Restricted cash
Cash and cash equivalents 29,375 127,950
Total current assets 67,676 143,399
TOTAL ASSETS 550,162 369,501
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 425,535 366,180
Accumulated deficit (35,002) (27,360)
Other components of equity 82,587 (29,939)
473,120 308,881
Non-controlling interests (20,091) (16,618)
Total equity 453,029 292,263
Non-current liabilities
Long-term borrowings 3,817 2,121
Finance lease liability 12,282 -
Decommissioning and rehabilitation provision 52,744 12,791
Total non-current liabilities 68,843 14,912
Current liabilities
Trade payables and accrued liabilities 22,144 23,574
Revolving commodity facility 5,854 -
Current portion of finance lease liability 292 -
Current portion of long-term borrowings - 38,752
Convertible debenture - -
Total current liabilities 28,290 62,326
Total liabilities 97,133 77,238
TOTAL EQUITY AND LIABILITIES 550,162 369,501
NATURE OF OPERATIONS AND GOING CONCERN
The accompanying notes are an integral part of the condensed consolidated
interim financial statements
Condensed consolidated interim statement of income
for the three and six months ended June 30, 2010
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
For the three months
ended
Jun 30, May 31,
2010 2009
Notes $ 000 $ 000
General expenses 15 (4,922) (3,353)
Other income and expenses (net) 15 (16,407) (10,218)
Finance costs (2,697) (14)
Loss before taxation (24,026) (13,585)
Income tax expense - -
LOSS FOR THE PERIOD (24,026) (13,585)
Loss attributable to:
Owners of the parent (20,675) (12,977)
Non-controlling interest (3,351) (608)
(24,026) (13,585)
Loss per share (in currency units)
attributable to owners of the parent:
Basic and diluted 16 (0.04) (0.03)
For the six months
ended
Jun 30, May 31,
2010 2009
$ 000 $ 000
General expenses (9,315) (16,069)
Other income and expenses (net) (16,416) (8,710)
Finance costs (3,476) (1,296)
Loss before taxation (29,207) (26,075)
Income tax expense - -
LOSS FOR THE PERIOD (29,207) (26,075)
Loss attributable to:
Owners of the parent (24,272) (24,471)
Non-controlling interest (4,935) (1,604)
(29,207) (26,075)
Loss per share (in currency units) attributable to
owners of the parent:
Basic and diluted (0.05) (0.07)
The accompanying notes are an integral part of the condensed consolidated
interim financial statements
Condensed consolidated interim statement of comprehensive income
for the three and six months ended June 30, 2010
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
For the three months
ended
Jun 30, May 31,
2010 2009
Notes $ 000 $ 000
Loss for the period (24,026) (13,585)
Other comprehensive income / (expenses)
(net of tax) 22,811 (74,400)
Exchange gain / (loss) on translation from
functional to presentation currency 22,811 (74,400)
Income tax relating to components of other
comprehensive income - -
TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE PERIOD (1,215) (87,985)
Total comprehensive (loss) / income
attributable to:
Owners of the parent 2,136 (87,377)
Non-controlling interest (3,351) (608)
(1,215) (87,985)
For the six months
ended
Jun 30, May 31,
2010 2009
$ 000 $ 000
Loss for the period (29,207) (26,075)
Other comprehensive income / (expenses) (net of tax) 20,219 (75,417)
Exchange gain / (loss) on translation from
functional to presentation currency 20,219 (75,417)
Income tax relating to components of other
comprehensive income - -
TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE PERIOD (8,988) (101,492)
Total comprehensive (loss) / income attributable to:
Owners of the parent (4,053) (99,888)
Non-controlling interest (4,935) (1,604)
(8,988) (101,492)
The accompanying notes are an integral part of the condensed consolidated
interim financial statements
Condensed consolidated interim statement of changes in shareholders`
equity
for the three and six months ended June 30, 2010
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
Equity attributable to the shareholders
Share
Foreign
Based
Currency
Share Payment
Translation
Capital Deficit Reserve Warrants
Reserve
$ 000 $ 000 $ 000 $ 000 $
000
Balance at
February 28, 2009 366,180 (27,360) 7,329 846
(38,114)
Shares issued 59,355 - - -
-
Loss for the period - (7,642) - -
-
Stock based compensation - - 2,838 -
-
Other comprehensive income:
Currency translation
adjustment - - - -
109,688
Balance at
December 31, 2009 425,535 (35,002) 10,167 846
71,574
Shares issued 241,523 - - -
-
Loss for the period - (24,272) - -
-
Stock based compensation * - - 27,677 -
-
Other comprehensive income:
Currency translation
adjustment - - - -
(20,219)
Balance at
June 30, 2010 667,058 (59,274) 37,844 846
51,355
Note 9
Non-
controlling Total
Subtotal interest Equity
$ 000 $ 000 $ 000
Balance at February 28, 2009 308,881 (16,618) 292,263
Shares issued 59,355 - 59,355
Loss for the period (7,642) (3,473) (11,115)
Stock based compensation 2,838 - 2,838
Other comprehensive income:
Currency translation adjustment 109,688 - 109,688
Balance at December 31, 2009 473,120 (20,091) 453,029
Shares issued 241,523 - 241,523
Loss for the period (24,272) (4,935) (29,207)
Stock based compensation * 27,677 - 27,677
Other comprehensive income:
Currency translation adjustment (20,219) - (20,219)
Balance at June 30, 2010 697,829 (25,026) 672,803
* The movement includes stock based compensation of US$1.013 million
relating
to the vesting of share options and US$26.664 million relating to the fair
value of the convertible debenture issued.
The accompanying notes are an integral part of the condensed consolidated
interim financial statements
Condensed consolidated interim statement of cashflows
for the three and six months ended June 30, 2010
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
For the three months
ended
Jun 30, May 31,
2010 2009
$ 000 $ 000
Notes
Cash flow s from operating activities
Cash receipts from customers 19,879 -
Cash paid to suppliers and employees (46,075) (32,333)
Cash utilized in operations (26,196) (32,333)
Interest received 432 824
Interest paid (307) (669)
Net cash utilized in operating activities (26,071) (32,178)
Cash flows from investing activities
Purchase of property, plant and equipment 517 (33,934)
Additions to intangible assets (1,065) -
Increase in rehabilitation investment (17,128) (1,621)
Increase in cash investments - -
Increase in deferred exploration expenses (495) (732)
Net cash utilized in investing activities (18,171) (36,287)
Cash flows from financing activities
Increase in loans payable 12,645 481
Decrease in finance lease liability (451) (322)
Decrease in revolving commodity facility (8,592) -
Realised foreign exchange (losses) / gains (1) 2, 699
Decrease in loans receivable - -
Proceeds from issue of shares 238,809 52,306
Net cash generated from financing activities 242,410 55,164
Net (decrease) / increase in cash and cash
equivalents 198,168 (13,301)
Net foreign exchange differences (3,129) 30,429
Cash and cash equivalents at the beginning
of the period 8 17,892 127,950
Cash and cash equivalents at the end of the
period 8 212,931 145,078
For the six months
ended
Jun 30, May 31,
2010 2009
$ 000 $ 000
Cash flows from operating activities
Cash receipts from customers 35,609 -
Cash paid to suppliers and employees (88,285) (39,189)
Cash utilized in operations (52,676) (39,189)
Interest received 749 (4,022)
Interest paid (679) (494)
Net cash utilized in operating activities (52,606) (43,705)
Cash flows from investing activities
Purchase of property, plant and equipment (697) (69,470)
Additions to intangible assets (1,165) (5,850)
Increase in rehabilitation investment (17,658) (2,676)
Increase in cash investments - -
Increase in deferred exploration expenses (909) (1,975)
Net cash utilized in investing activities (20,429) (79,971)
Cash flows from financing activities
Increase in loans payable 25,478 1, 028
Decrease in finance lease liability (911) (310)
Decrease in revolving commodity facility (3,654) -
Realised foreign exchange (losses) / gains (2) 2, 600
Decrease in loans receivable - 12
Proceeds from issue of shares 239,352 229,317
Net cash generated from financing activities 260,263 232,647
Net (decrease) / increase in cash and cash
equivalents 187,228 108,971
Net foreign exchange differences (3,672) 25,490
Cash and cash equivalents at the beginning of the
period 29,375 10,617
Cash and cash equivalents at the end of the period 212,931 145,078
The accompanying notes are an integral part of the condensed consolidated
interim financial statements
Notes to the condensed consolidated interim financial statements
for the three and six months ended June 30, 2010
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
1. Nature of operations and going concern
Platmin Limited (the "Company") and its subsidiaries (the "Group") is a
development stage Natural Resources Group engaged in the acquisition,
exploration and development of Platinum Group Elements ("PGE") properties
in
the Republic of South Africa.
The Company was incorporated under the Canada Business Corporation Act on
May
29, 2003. The Company has continued as a company under the Business
Corporations Act of British Columbia, Canada effective April 1, 2009. Its
Common Shares are listed on the Toronto Stock Exchange ("TSX") and the
Alternative Investment Market of the London Stock Exchange ("AIM"). The
Company
trades under the symbol "PPN" on both exchanges. On July 22, 2009, the
Company
listed on the Johannesburg Securities Exchange Limited ("JSE") with the
symbol
"PLN".
These condensed consolidated interim financial statements have been
prepared
using International Financial Reporting Standards ("IFRS") applicable to a
going concern, which contemplates the realization of assets and settlement
of
liabilities in the normal course of business as they become due.
The Group changed its financial year end from the last day of February in
each
calendar year to the last day of December, effective for the period ending
December 31, 2009. As a result of the change in year end, the comparative
amounts are not directly comparable with the current balances.
For the three months ended June 30, 2010 the Group incurred a loss of
US$24.026
million and as at June 30, 2010 had an accumulated deficit of US$59.274
million. There are approximately US$14.988 million (ZAR114.037 million) in
existing development commitments for completion of the Pilanesberg
project`s
Pilanesberg Platinum Mines ("PPM") as at June 30, 2010. The Group is
dependent
on the successful completion of PPM to generate cash flows in order to fund
its
operations and pay debt as it becomes due. Such circumstances may lend to
substantial doubt as to the ability of the Group to meet its obligations as
they become due and accordingly the appropriateness of the use of the
accounting principles applicable to a going concern.
The Group raised US$241.523 million in capital by way of a private
placement
during May 2010 and had US$212.931 million in cash and cash equivalents at
June
30, 2010 to fund development activities and meet its contractual
obligations.
The Company`s financing efforts to date, while substantial, may not be
sufficient in and of themselves to enable the Company to fund all aspects
of
its operations when taking into consideration forecasted revenue streams
based
upon planned production. Management expects that the Company will be able
to
secure the necessary financing to meet the Company`s requirements on an
ongoing
basis. Nevertheless, there is no assurance that these initiatives will be
successful or sufficient. If the going concern assumption were not
appropriate
for these consolidated financial statements, then adjustments to the
carrying
values of the assets and liabilities, the reported expenses and the
statement
of financial position classifications, which could be material, may be
necessary.
2. Statement of compliance
The unaudited condensed consolidated interim financial statements for the
three
and six months ended June 30, 2010 have been prepared in accordance with
the
recognition and measurement requirements of IFRS and the presentation and
disclosure requirements of International Accounting Standard ("IAS") 34
Interim
Financial Reporting. These interim results do not include all the
information
required for the full annual financial statements, and should be read in
conjunction with the consolidated financial statements of the Group as at
and
for the period ended December 31, 2009.
The unaudited condensed consolidated interim financial statements, which
have
been prepared on the going concern basis, were approved by the Board of
Directors on August 6, 2010.
This set of unaudited condensed consolidated interim financial statements
has
not been audited by the Group`s auditors and thus no audit report was
issued.
The financial statements are presented in US dollars, rounded to the
nearest
thousand.
3. Accounting policies
The accounting policies applied by the Group in these unaudited condensed
consolidated interim financial statements are consistent with those applied
by
the Group in its consolidated financial statements as at and for the period
ended December 31, 2009.
4. Segmented information
Management has determined the operating segments based on the reports
reviewed
by the executive committee that are used to make strategic decisions.
The committee considers the business from an operating perspective. The
Group
operates in one geographic segment, the Republic of South Africa. The
operating
segments comprise the following:
Mining operation: PPM is currently in an advanced development and build-up
stage. This mine is involved in the mining and processing of platinum group
elements.
Development and exploration operations: The Group is engaged in a number of
other development and exploration projects within the Republic of South
Africa.
Administrative operations: The Group administration is done at the local
corporate office based in Centurion, the Metropolitan City of Tshwane in
the
Republic of South Africa.
Although the development and exploration as well as administrative
operations
do not meet the quantitative thresholds required by IFRS 8 - Segment
reporting,
management has concluded that these segments should be reported, as it is
closely monitored by the executive committee. The development and
exploration
segment is earmarked as the growth area for the Group.
The segment information provided to the committee for the reportable
segments
for the six month periods ended is as follows:
Development and
Mining exploration
Jun 30, May 31, Jun 30, May 31,
2010 2009 2010 2009
Amounts in $ `000
Reportable items in the
Statement of Comprehensive Income
External revenues 33,696 - - -
Intersegment revenue - - - -
Adjusted EBITDA (43,556) (1,111) - (19)
Reportable items in the
Statement of Financial Position
Total assets 539,965 396,770 36,393 12,658
Additions to non-
current assets 697 106,375 155,604 3,172
Total liabilities 127,796 100,581 3,968 3,681
Administration Consolidated
Jun 30, May 31, Jun 30, May 31,
2010 2009 2010 2009
Amounts in $ `000
Reportable items in the
Statement of Comprehensive Income
External revenues - - 33,696 -
Intersegment revenue - - - -
Adjusted EBITDA (28,651) (14,760) (72,207) (15,890)
Reportable items in the
Statement of Financial Position
Total assets 362,699 109,738 939,057 519,166
Additions to non-
current assets 909 5,699 157,210 115,246
Total liabilities 134,490 1,728 266,254 105,990
The amounts provided to the committee with respect to total assets and
total
liabilities are measured in a manner consistent with that of the
consolidated
financial statements. These assets and liabilities are allocated based on
the
operations of the segment. There were no impairments during the current or
prior reportable periods.
Additions to non-current assets include all additions to Mining assets,
Intangible assets and Property, Plant and Equipment.
A reconciliation of adjusted EBITDA to total comprehensive (loss)/income
for
the period is provided as follows:
Consolidated
Jun 30, May 31,
2010 2009
$`000 $`000
Total EBITDA for reportable segments (72,207) (15,890)
Revenues offset against mine development costs (33,697) -
Mining costs offset against mine development costs 73,156 -
Total EBITDA per Consolidated statement of income
and comprehensive income (32,748) (15,890)
Foreign exchange gains 7,295 (8,714)
Depreciation (278) (175)
Finance costs (net) (3,476) (1,296)
Loss before taxation (29,207) (26,075)
Income tax expense - -
Exchange differences on translating from functional
currency to presentation currency 20,219 (75,417)
Total comprehensive (loss)/income for the period (8,988) (101,492)
5. Property, plant and equipment
Plant
construction
and mine Land and
development buildings Other
$ 000 $ 000 $ 000
COST
Balance as at February 28, 2009 186,379 721 1,099
Additions 155,246 48 410
Foreign exchange movement 66,164 256 390
Balance as at December 31, 2009 407,789 1,025 1,899
Additions 61,496 10 276
Foreign exchange movement (12,853) (33) (47)
Balance as at June 30, 2010 456,432 1,002 2,128
ACCUMULATED DEPRECI ATION
Balance as at February 28, 2009 - - 356
Depreciation for the period - - 237
Foreign exchange movement - - 166
Balance as at December 31, 2009 - - 759
Depreciation for the period - - 219
Foreign exchange movement - - (28)
Balance as at June 30, 2010 - - 950
Leased
assets TOTAL
$ 000 $ 000
COST
Balance as at February 28, 2009 - 188,199
Additions 12,031 167,735
Foreign exchange movement 960 67,770
Balance as at December 31, 2009 12,991 423,704
Additions - 61,782
Foreign exchange movement (410) (13,343)
Balance as at June 30, 2010 12,581 472,143
ACCUMULATED DEPRECI ATION
Balance as at February 28, 2009 - 356
Depreciation for the period 428 665
Foreign exchange movement 46 212
Balance as at December 31, 2009 474 1,233
Depreciation for the period 399 618
Foreign exchange movement (21) (49)
Balance as at June 30, 2010 852 1,802
Plant
construction
and mine Land and
development buildings Other
$ 000 $ 000 $ 000
CARRYING AMOUNTS
At February 28, 2009 186,379 721 743
At December 31, 2009 407,789 1,025 1,140
At June 30, 2010 456,432 1,002 1,178
Leased
assets TOTAL
$ 000 $ 000
CARRYING AMOUNTS
At February 28, 2009 - 187,843
At December 31, 2009 12,517 422,471
At June 30, 2010 11,729 470,341
Included in the plant construction and mine development is a total of
US$131.984 million (Dec 31, 2009: US$78.491 million; Feb 28, 2009:
US$14.657
million) relating to stripping costs which are capitalized as part of the
mine
development at PPM.
6. Restricted cash
As at Jun 30, As at May 31,
2010 2009
$ 000 $ 000
Cash-backed guarantees 24,553 5,021
Cash collateral for convertible debentures 135,027 -
Balance at the end of the period 159,580 5,021
As at Dec 31, As at Feb 28,
2009 2009
$ 000 $ 000
Cash-backed guarantees 7,163 2,497
Cash collateral for convertible debentures - -
Balance at the end of the period 7,163 2,497
7. Inventories
As at Jun 30, As at May 31,
2010 2009
$ 000 $ 000
Ore stockpiled at cost 3,839 7,697
Work in progress at cost 3,544 -
Consumables at cost 3,579 -
Balance at the end of the period 10,962 7,697
As at Dec 31, As at Feb 28,
2009 2009
$ 000 $ 000
Ore stockpiled at cost 4,323 6,943
Work in progress at cost 3,154 -
Consumables at cost 2,372 -
Balance at the end of the period 9,849 6,943
8. Cash and cash equivalents
As at Jun 30, As at May 31,
2010 2009
$ 000 $ 000
6,213
Cash at bank and on hand 95,214
Cash on short term deposits 206,718 49,864
Total cash and cash equivalents 212,931 145,078
As at Dec 31, As at Feb 28,
2009 2009
$ 000 $ 000
29,375 88,883
Cash at bank and on hand
Cash on short term deposits - 39,067
Total cash and cash equivalents 29,375 127,950
Cash at banks earns interest at a floating rate based on daily bank deposit
rates. Cash is deposited at highly reputable financial institutions of a
high
quality credit standing within the Republic of South Africa and their
foreign
affiliates in the United Kingdom. The fair value of cash and cash
equivalents
equates the values as disclosed in this note.
9. Share capital
a) Common shares authorized
The Company has an unlimited number of common shares with no par value.
b) Common shares issued
Number of Amount
Movement during the year ended December 31, 2009 shares $000
Balance, February 28, 2009 370,002,800 366,180
Common shares issued 75,015,552 59,355
Balance, December 31, 2009 445,018,352 425,535
Movement during the period ended June 30, 2010
Balance, January 1, 2010 445,018,352 425,535
Common shares issued 205,761,317 241,523
Balance, June 30, 2010 650,779,669 667,058
On May 13, 2010 the Company issued 205,761,317 new common shares at a price
of
US$1.215 per common share for a total consideration of US$250.000 million,
raising US$241.523 million net of brokerage and legal fees.
In addition to the funds-raising process, US$135 million of convertible
debentures have been placed. The total funding from the prospectus offering
and
private placement is US$385.000 million.
10. Finance lease liability
ESKOM Holdings Limited ("ESKOM", the South African state utility supplier)
designed and built an electrical installation adjacent to the Pilanesberg
Mine
to produce the required electricity and ESKOM maintains ownership and
control
over all significant aspects of operating the facility. Each month, PPM
will
pay a fixed capacity charge and a variable charge based on actual
electricity
consumed. These payments attract interest at the South African prime
overdraft
rate plus 2%.
The arrangement with ESKOM, entered into during the period under review
meet
these requirements of IFRIC 4 - Arrangements containing a lease, and
therefore
constitutes a lease and falls within the scope of IAS 17 - Leases and is
further classified as a finance lease due to the sub-station being
constructed
exclusively for the use of PPM. An asset (the electrical installation) is
explicitly identified in the arrangement and fulfilment of the arrangement
is
dependent on the electrical installation.
Reconciliation between the total minimum lease payments and their present
value:
Up to
1 year 1 to 5 years
$ 000 $ 000
Minimum lease payments 648 5,182
Finance cost (533) (3,964)
Present value 115 1,218
More than
5 years Total
$ 000 $ 000
Minimum lease payments 13,254 19,084
Finance cost (5,846) (10,343)
Present value 7,408 8,741
11. Decommissioning and rehabilitation provision
As at As at
Jun 30, May 31,
2010 2009
$ 000 $ 000
DISCOUNTED
Balance at the beginning of the period 52,744 12,791
Increase in liability for the period 23,019 5,401
Unwinding of interest (Accretion) 744 97
76,507 18,289
Effect of exchange rate changes (2,407) 3,261
Balance at the end of the period 74,100 21,550
UNDISCOUNTED
Balance at the beginning of the period 70,829 17,527
Increase in liability for the period 29,713 6,355
100,542 23,882
Effect of exchange rate changes (2,232) 4,523
Balance at the end of the period 98,310 28,405
As at As at
Dec 31, Feb 28,
2009 2009
$ 000 $ 000
DISCOUNTED
Balance at the beginning of the period 12,791 1,461
Increase in liability for the period 36,272 11,629
Unwinding of interest (Accretion) 426 65
49,489 13,155
Effect of exchange rate changes 3,255 (364)
Balance at the end of the period 52,744 12,791
UNDISCOUNTED
Balance at the beginning of the period 17,527 2,457
Increase in liability for the period 47,080 15,684
64,607 18,141
Effect of exchange rate changes 6,222 (614)
Balance at the end of the period 70,829 17,527
PPM is currently in the commissioning phase and the estimate represents the
current cost of environmental liabilities as at the respective period end.
An
annual estimate of the quantum of closure costs is necessary in order to
fulfil
the requirements of the DMR, as well as meeting specific closure objectives
outlined in the mine`s Environmental Management Programme.
Although the ultimate amount of the asset retirement obligation is
uncertain,
the fair value of the obligation is based on information that is currently
available. This estimate includes costs for the removal of all current mine
infrastructure and the rehabilitation of all disturbed areas to a condition
as
described in the mine`s Environmental Management Programme.
The discounted amount of the asset retirement obligation has been
determined
using a discount rate of 8.6% and an inflation rate of 6% over a period of
11
years and 8 months. The undiscounted amount of the asset retirement
obligation
represents the amount that the company would be liable to pay should the
expense be incurred today.
12. Revolving commodity facility
On October 9, 2009, the Company signed a definitive agreement with Investec
Bank Limited ("Investec") to provide a twelve month renewable revolving
commodity finance facility of up to ZAR400 million (US$54.420 million at an
exchange rate of ZAR7.35: US$1.00) for working capital purposes.
In terms of this facility Investec will finance up to 91% of PPM`s
platinum,
palladium, gold, copper and nickel deliveries to Northam Platinum Limited.
This
facility bears interest at the Johannesburg Interbank Lending Rate
("JIBAR")
plus 3.0% and is repaid within 2 to 3 months upon which the funds are again
available for draw-down.
As at Jun 30, As at May 31,
2010 2009
$ 000 $ 000
Balance at the beginning of the period 5,854 -
Increase in liability for the period 21,994 -
Repayment of amounts owing (24,692) -
Interest accrued (42) -
3,114 -
Effect of exchange rate changes (129) -
Balance at the end of the period 2,985 -
As at Dec 31, As at Feb 28,
2009 2009
$ 000 $ 000
Balance at the beginning of the period - -
Increase in liability for the period 5,913 -
Repayment of amounts owing - -
Interest accrued (53) -
5,860 -
Effect of exchange rate changes (6) -
Balance at the end of the period 5,854 -
13. Current portion of long-term borrowings
As at Jun 30, As at May 31,
2010 2009
$ 000 $ 000
Balance at the beginning of the period - 38,752
- Bridge loan facility - -
- Pallinghurst short-term loan facility 26,114 -
Interest on borrowings 454 1,239
Settlement of bridge loan facility - -
26,568 39,991
Effect of exchange rate changes (7) 9,879
Balance at the end of the period 26,561 49,870
As at Dec 31, As at Feb 28,
2009 2009
$ 000 $ 000
Balance at the beginning of the period 38,752 -
- Bridge loan facility - 45,518
- Pallinghurst short-term loan facility - -
Interest on borrowings 2,053 4,243
Settlement of bridge loan facility (51,987) -
(11,182) 49,761
Effect of exchange rate changes 11,182 (11,009)
Balance at the end of the period - 38,752
On May 14, 2008, PPM signed a US$35 million (ZAR350 million) bridge
financing
facility with Standard Bank of South Africa Limited ("Standard Bank"). The
bridge loan facility has been used to fund the development and construction
of
the Pilanesberg Mine. The bridge loan facility was repaid in full on August
31,
2009.
In connection with this facility, the Company issued 300,000 warrants
exercisable at $6.95 per common share from September 15, 2008 until expiry
of
the warrants on May 14, 2011. The Company has classified this facility as
held
to maturity and the fair value of the warrants of US$0.846 million has been
amortized to net income.
On March 22, 2010, a subsidiary of Platmin entered into a ZAR192 million
short
term lending facility (the equivalent of US$26 million at an exchange rate
of
ZAR7.38 to the US dollar) with Pallinghurst Resources Limited
("Pallinghurst").
As at June 30, 2009, a total of ZAR191.0 million had been drawn against
this
facility.
Funds raised will be used by the Company for working capital, to complete
the
build-up to full production at the Pilanesberg Platinum Mine (PPM), to
pursue a
number of growth and acquisition opportunities, and to further develop the
Company`s Eastern Limb projects.
14. Convertible debenture
As at Jun 30, As at May 31,
2010 2009
$ 000 $ 000
Convertible debenture issued 135,000 -
Option component accounted for in equity (26,664) -
108,336 -
Share-based payment expense (Fair value
adjustment at transaction date) 23,708 -
Fair value of debt component on transaction date 132,044
Interest for the period 681 -
Transaction costs (983) -
131,742 -
As at Dec 31, As at Feb 28,
2009 2009
$ 000 $ 000
Convertible debenture issued - -
Option component accounted for in equity - -
- -
Share-based payment expense (Fair value
adjustment at transaction date) - -
Fair value of debt component on transaction date
Interest for the period - -
Transaction costs - -
- -
The debentures were issued on May 13, 2010 to Ridgewood Investments
(Mauritius)
Pte Limited, Pallinghurst and Investec Bank Limited, for a principal sum of
US$135.000 million.
The debenture is convertible at the option of the holder into ordinary
shares
of Platmin Limited at a conversion price of US$ 1.215 per share by December
31,
2010. If the debenture is not converted into ordinary shares by the
maturity
date, the principal sum becomes repayable to the holders.
The debentures have a zero coupon rate. The effective interest rate is
3.76%
calculated based on the expected payments.
The fair value of the option component was determined using the following
assumptions:
a risk-free rate of 0.61%;
a volatility index of 67.73% and
a dividend yield of 0%.
The debentures are secured over cash and cash equivalents of US$135.027
million. The security provides the holder with a first ranking interest in
the
collateral account (or any investments made using the cash collateral
account)
and any interest or other proceeds earned thereon. The security interest is
released when the conversion right is exercised.
The fair value of the debt instrument at the reporting date is US$131.742
million.
The share-based payment expense (fair value adjustment) reported in the
income
statement for the three months ended June 30, 2010 can be summarised as
follows:
Share-based payment expense (fair value adjustment) on transaction
date 23,708
Foreign exchange adjustment at quarter-end (253)
Share-based payment expense (fair value adjustment) effect in income
statement 23,455
15. Loss before taxation
For the three months
ended
Jun 30, May 31,
2010 2009
$ 000 $ 000
Included in the general expenses are the following:
Audit fees (242) (400)
Consulting and professional fees (23) (187)
Depreciation (142) (81)
Employee expenses (2,260) (1,230)
General and administration expenses (1,634) (712)
Loss on disposal of fixed assets - -
Royalty taxes (122) -
Share based payments expense (499) (743)
(4,922) (3,353)
Included in other income are the following:
Foreign exchange gain / (loss) 7,304 (10,221)
Loss on impairment of exploration project (255) -
Other income / (expense) (1) 3
Share-based payment expense (fair value adjustment) (23,455) -
(16,407) (10,218)
For the six months
ended
Jun 30, May 31,
2010 2009
$ 000 $ 000
Included in the general expenses are the following:
Audit fees (422) (445)
Consulting and professional fees (195) (7,248)
Depreciation (278) (174)
Employee expenses (4,363) (3,551)
General and administration expenses (2,924) (1,758)
Loss on disposal of fixed assets - 5
Royalty taxes (122) -
Share based payments expense (1,011) (2,898)
(9,315) (16,069)
Included in other income are the following:
Foreign exchange gain / (loss) 7,295 (8,714)
Loss on impairment of exploration project (255) -
Other income / (expense) (1) 4
Share-based payment expense (fair value adjustment) (23,455) -
(16,416) (8,710)
16. (Loss) / earnings per share attributable to owners of the parent
For the three months
ended
Jun 30, May 31,
2010 2009
$ 000 $ 000
Basic earnings / (loss) per share (0.04) (0.03)
Basic (loss) / earnings per share is calculated by
dividing the net (loss) / profit for the period/ year
attributable to owners of the parent by the weighted
average number of ordinary shares outstanding during
the period/ year
Reconciliations:
Net (loss) / profit used in calculating basic
earnings per share attributable to owners of the
parent (USD`000) (20,675) (12,977)
Weighted average number of shares used in the
calculation of basic earnings per share (`000) 490,743 378,338
For the six months
ended
Jun 30, May 31,
2010 2009
$ 000 $ 000
Basic earnings / (loss) per share (0.05) (0.07)
Basic (loss) / earnings per share is calculated by
dividing the net (loss) / profit for the period/ year
attributable to owners of the parent by the weighted
average number of ordinary shares outstanding during
the period/ year
Reconciliations:
Net (loss) / profit used in calculating basic
earnings per share attributable to owners of the
parent (USD`000) (24,272) (24,471)
Weighted average number of shares used in the
calculation of basic earnings per share (`000) 513,605 357,996
There are no reconciling items between (loss) / earnings and headline
(loss) /
earnings and therefore (loss) / earnings per share and headline (loss) /
earnings per share is the same.
Due to the Group reporting a loss for the period ending June 30, 2010 the
diluted (loss) / earnings per share is equal to the basic (loss) / earnings
per share.
Investment Bank and Sponsor:
Investec Bank Limited
12 August 2010
Date: 12/08/2010 16:26:01 Produced by the JSE SENS Department.
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