| Mon 15 Nov 2010, 15:01 | | PLN - Platmin Limited - Condensed Consolidated Interim Financial Statements for |
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PLN
PLN
PLN - Platmin Limited - Condensed Consolidated Interim Financial Statements for
the three and nine month periods ended September 30, 2010 and August 31, 2009
Platmin Limited
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
Platmin Limited
(A development stage company)
Condensed Consolidated Interim Financial Statements
for the three and nine month periods ended September 30, 2010
and August 31, 2009
(Unaudited, expressed in United States dollars, unless otherwise stated)
Condensed consolidated interim statement of financial position
as on September 30, 2010
Sept 30, Aug 31,
2010 2009
Notes $ 000 $ 000
ASSETS
Non-current assets
Mining assets 47,165 39,739
Intangible assets 13,377 9,412
Property, plant and equipment 5 556,954 350,678
Loans receivable 57 43
Restricted cash - cash collateral and
guarantees 6 77,918 5,537
Total non-current assets 695,471 405,409
Current assets
Inventories 7 12,539 5,179
Accounts and other receivables 36,936 20,010
Restricted cash 6 135,079 -
Cash and cash equivalents 8 131,082 60,871
Total current assets 315,636 86,060
TOTAL ASSETS 1,011,107 491,469
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 9 666,795 425,535
Accumulated deficit (86,184) (32,599)
Other components of equity 155,387 57,203
735,998 450,139
Non-controlling interests (24,150) (18,342)
Total equity 711,848 431,797
Non-current liabilities
Long-term borrowings 4,368 3,492
Finance lease liability 10 9,322 11,924
Decommissioning and rehabilitation provision 11 91,484 27,623
Total non-current liabilities 105,174 43,039
Current liabilities
Trade payables and accrued liabilities 20,365 16,548
Revolving commodity facility 12 10,902 -
Current portion of finance lease liability 10 64 85
Current portion of long-term borrowings 13 29,723 -
Convertible debenture 14 133,031 -
Total current liabilities 194,085 16,633
Total liabilities 299,259 59,672
TOTAL EQUITY AND LIABILITIES 1,011,107 491,469
NATURE OF OPERATIONS AND GOING CONCERN 1
Dec 31, Feb 28,
2009 2009
Notes $ 000 $ 000
ASSETS
Non-current assets
Mining assets 43,454 30,097
Intangible assets 9,348 5,630
Property, plant and equipment 5 422,471 187,843
Loans receivable 50 35
Restricted cash - cash collateral and guarantees 6 7,163 2,497
Total non-current assets 482,486 226,102
Current assets
Inventories 7 9,849 6,943
Accounts and other receivables 28,452 8,506
Restricted cash 6 - -
Cash and cash equivalents 8 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 9 425,535 366,180
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 10 12,282 -
Decommissioning and rehabilitation provision 11 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 12 5,854 -
Current portion of finance lease liability 10 292 -
Current portion of long-term borrowings 13 - 38,752
Convertible debenture 14 - -
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 1
The accompanying notes are an integral part of the condensed consolidated
interim financial statements.
Condensed consolidated interim statement of income
for the three and nine months ended September 30, 2010
For the three months ended
Sept 30, Aug 31,
2010 2009
Notes $ 000 $ 000
General expenses 15 (6,918) (4,684)
Other (expenses) and income 15 (17,338) 11,169
Finance costs (1,778) 138
(Loss) / income before taxation (26,034) 6,623
Income tax expense - (3)
(LOSS) / INCOME FOR THE PERIOD (26,034) 6,620
Loss attributable to:
Owners of the parent (26,910) 7,736
Non-controlling interest 876 (1,116)
(26,034) 6,620
Loss per share (in currency units) attributable
to owners of the parent:
Basic and diluted 16 (0.05) 0.02
For the nine months ended
Sept 30, Aug 31,
2010 2009
Notes $ 000 $ 000
General expenses 15 (16,233) (20,751)
Other (expenses) and income 15 (33,754) 2,459
Finance costs (5,254) (1,158)
(Loss) / income before taxation (55,241) (19,450)
Income tax expense - (3)
(LOSS) / INCOME FOR THE PERIOD (55,241) (19,453)
Loss attributable to:
Owners of the parent (51,182) (16,733)
Non-controlling interest (4,059) (2,720)
(55,241) (19,453)
Loss per share (in currency units) attributable to
owners of the parent:
Basic and diluted 16 (0.09) (0.05)
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 nine months ended September 30, 2010
For the three months ended
Sept 30, Aug 31,
2010 2009
Notes $ 000 $ 000
Loss for the period (26,034) 6,620
Other comprehensive income / (expenses)
(net of tax) 22,445 (11,399)
Exchange gain / (loss) on translation from
functional to presentation currency 22,445 (11,399)
Income tax relating to components of other
comprehensive income - -
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD (3,589) (4,779)
Total comprehensive (loss) / income
attributable to:
Owners of the parent (4,465) (3,663)
Non-controlling interest 876 (1,116)
(3,589) (4,779)
For the nine months ended
Sept 30, Aug 31,
2010 2009
$ 000 $ 000
Loss for the period (55,241) (19,453)
Other comprehensive income / (expenses) (net of tax) 42,664 (86,816)
Exchange gain / (loss) on translation from functional to
presentation currency 42,664 (86,816)
Income tax relating to components of other comprehensive
income - -
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD (12,577) (106,269)
Total comprehensive (loss) / income attributable to:
Owners of the parent (8,518) (103,549)
Non-controlling interest (4,059) (2,720)
(12,577) (106,269)
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 nine months ended September 30, 2010
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
Equity attributable to the shareholders
Share
Based
Share Payment
Capital Deficit Reserve Warrants
$ 000 $ 000 $ 000 $ 000
Balance at February
28, 2009 366,180 (27,360) 7,329 846
Shares issued 59,355 - - -
Loss for the period - (7,642) - -
Stock based compensation - - 2,838 -
Other comprehensive income:
Currency translation adjustment - - - -
Balance at December
31, 2009 425,535 (35,002) 10,167 846
Shares issued 241,260 - - -
Loss for the period - (51,182) - -
Stock based compensation * - - 30,136 -
Other comprehensive income:
Currency translation adjustment - - - -
Balance at September
30, 2010 666,795 (86,184) 40,303 846
Note 9
Foreign
Currency Non-
Translation controlling Total
Reserve Subtotal interest Equity
$ 000 $ 000 $ 000 $ 000
Balance at February
28, 2009 (38,114) 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 - 109,688
Balance at December
31, 2009 71,574 473,120 (20,091) 453,029
Shares issued - 241,260 - 241,260
Loss for the period - (51,182) (4,059) (55,241)
Stock based compensation * - 30,136 - 30,136
Other comprehensive
income:
Currency translation
adjustment 42,664 42,664 - 42,664
Balance at September 30,
2010 114,238 735,998 (24,150) 711,848
* The movement includes stock based compensation of US$3.471 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 changes in shareholders` equity
for the three and nine months ended September 30, 2010
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
Condensed consolidated interim statement of cash flows for the three and nine
months ended September 30, 2010
For the three months ended
Sept 30, Aug 31,
2010 2009
Notes $ 000 $ 000
Cash flows from operating activities
Cash receipts from customers 10,131 4,128
Cash paid to suppliers and employees (45,779) (4,726)
Cash utilized in operations (35,648) (598)
Interest received 1,123 -
Interest paid (225) (76)
Income tax paid - (3)
Net cash utilized in operating activities (34,750) (677)
Cash flows from investing activities
Purchase of property, plant and equipment (3,872) (47,627)
Additions to intangible assets 81 (2,495)
Decrease / (Increase) in rehabilitation investment - 1,486
Increase in cash investments (48,538) -
Increase in deferred exploration expenses (68) (211)
Net cash utilized in investing activities (52,397) (48,847)
Cash flows from financing activities
(Decrease) / Increase in loans payable - (52,547)
Decrease in finance lease liability (460) (837)
Decrease in revolving commodity facility 7,260 -
Realised foreign exchange (losses) / gains - 11,994
Proceeds from issue of shares (265) -
Net cash generated / (utilized) from financing activities 6,535 (41,390)
Net (decrease) / increase in cash and cash equivalents (80,612) (90,914)
Net foreign exchange differences (1,237) 56,571
Cash and cash equivalents at the beginning of
the period 8 212,931 95,214
Cash and cash equivalents at the end of
the period 8 131,082 60,871
For the nine months ended
Sept 30, Aug 31,
2010 2009
Notes $ 000 $ 000
Cash flows from operating activities
Cash receipts from customers 45,884 4,497
Cash paid to suppliers and employees (134,054) (25,002)
Cash utilized in operations (88,170) (20,505)
Interest received 1,859 1,773
Interest paid (906) (924)
Income tax paid - (3)
Net cash utilized in operating activities (87,217) (19,659)
Cash flows from investing activities
Purchase of property, plant and equipment (4,507) (122,737)
Additions to intangible assets (1,096) (4,627)
Decrease / (Increase) in rehabilitation investment - (401)
Increase in cash investments (65,497) (392)
Increase in deferred exploration expenses (983) (1,309)
Net cash utilized in investing activities (72,083) (129,466)
Cash flows from financing activities
(Decrease) / Increase in loans payable 25,708 (114,449)
Decrease in finance lease liability (1,371) (1,280)
Decrease in revolving commodity facility 3,445 -
Realised foreign exchange (losses) / gains (2) 27,312
Proceeds from issue of shares 241,256 59,355
Net cash generated / (utilized) from financing
activities 269,036 (29,062)
Net (decrease) / increase in cash and cash equivalents 109,736 (178,187)
Net foreign exchange differences (8,029) 150,175
Cash and cash equivalents at the beginning of the
period 8 29,375 88,883
Cash and cash equivalents at the end of the period 8 131,082 60,871
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 nine months ended September 30, 2010
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 September 30, 2010 the Group incurred a loss of
US$26.034 million and as at September 30, 2010 had an accumulated deficit of
US$73.352 million. There are approximately US$14.284 million (ZAR99.184 million)
in existing development commitments for completion of the Pilanesberg project`s
Pilanesberg Platinum Mines ("PPM") as at September 30, 2010. The Group is
dependent on the successful completion and profits from production from PPM to
generate cash flows in order to fund its operations and pay debt as it becomes
due. Such circumstances may lend to significant doubt as to the ability of the
Group to meet its obligations as they become due.
The Group raised US$241.523 million in capital by way of a private placement
during May 2010 and had US$131,082 million in cash and cash equivalents at
September 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 nine months ended September 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 November 4, 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 internal
management reports reviewed on a monthly basis 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. Although revenue from mining operations is earned and reported on
monthly for purposes of the internal management reports, for published results
in accordance with IFRS, Platmin will offset revenue from mining activities
against capitalised operating costs until such time as PPM is brought into
commercial production.
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.
IFRS 8 requires an entity to report the earnings before interest, tax,
depreciation and amortisation ("EBITDA") for each of its reportable segments.
The segment information provided to the committee for the reportable segments
for the nine month periods ended is as follows:
Development and
Mining exploration
Sept 30, Aug 31, Sept 30, Aug 31,
Amounts in $ `000 2010 2009 2010 2009
Reportable items in the
Statement of Comprehensive Income
External revenues 51,332 9,996 - -
Intersegment revenue - - - -
Adjusted EBITDA (72,400) (34,931) - (1)
Reportable items in the
Statement of Financial Position
Total assets 685,626 452,513 42,989 21,454
Additions to non-
current assets 95,552 133,734 139,261 1,084
Total liabilities (155,409) (54,952) (4,440) (3,645)
Administration Consolidated
Sept 30, Aug 31, Sept 30, Aug 31,
Amounts in $ `000 2010 2009 2010 2009
Reportable items in the
Statement of Comprehensive Income
External revenues - - 51,332 9,996
Intersegment revenue - - - -
Adjusted EBITDA (33,038) (18,728) (105,438) (53,660)
Reportable items in the
Statement of Financial Position
Total assets 282,492 17,502 1,011,107 491,469
Additions to non-
current assets 917 555 235,730 135,373
Total liabilities (139,410) (1,075) (299,259) (59,672)
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
Sept 30, Aug 31,
2010 2009
$`000 $`000
Total EBITDA for reportable segments (105,438) (53,660)
Revenues offset against mine development costs (51,332) (9,996)
Mining costs offset against mine development costs 117,004 43,169
Total EBITDA per Consolidated statement of income and
comprehensive income (39,766) (20,487)
Foreign exchange (loss)/gain (9,795) 2,458
Depreciation (426) (263)
Finance costs (net) (5,254) (1,158)
Loss before taxation (55,241) (19,450)
Income tax expense - (3)
Exchange differences on translating from functional
currency to presentation currency 42,664 (86,816)
Total comprehensive (loss)/income for the period (12,577) (106,269)
5. Property, plant and equipment
Plant construction and Land and
mine 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 102,348 45 300
Foreign exchange movement 31,811 66 124
Balance as at September 30, 2010 541,948 1,136 2,323
ACCUMULATED DEPRECIATION
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 - 1 329
Foreign exchange movement - 1 16
Balance as at September 30, 2010 - 2 1,104
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 - 102,693
Foreign exchange movement 812 32,813
Balance as at September 30, 2010 13,803 559,210
ACCUMULATED DEPRECIATION
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 609 939
Foreign exchange movement 67 84
Balance as at September 30, 2010 1,150 2,256
Plant construction and mine
development Land and 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 September 30, 2010 541,948 1,134 1,219
Leased assets TOTAL
$ 000 $ 000
CARRYING AMOUNTS
At February 28, 2009 - 187,843
At December 31, 2009 12,517 422,471
At September 30, 2010 12,653 556,954
Included in the plant construction and mine development is a total of US$164.870
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 Sept 30, As at Aug 31,
2010 2009
$ 000 $ 000
Cash-backed guarantees 77,918 5,537
Cash collateral for convertible debentures 135,079 -
Balance at the end of the period 212,997 5,537
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 Sept 30, As at Aug 31,
2010 2009
$ 000 $ 000
Ore stockpiled at cost 3,698 -
Work in progress at cost 4,337 4,846
Consumables at cost 4,504 333
Balance at the end of the period 12,539 5,179
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 Sept 30, As at Aug 31,
2010 2009
$ 000 $ 000
Cash at bank and on hand 16,866 60,871
Cash on short term deposits 114,216 -
Total cash and cash equivalents 131,082 60,871
As at Dec 31, As at Feb 28,
2009 2009
$ 000 $ 000
Cash at bank and on hand 29,375 88,883
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 shares Amount $000
Movement during the year ended December 31,
2009
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 September
30, 2010
Balance, January 1, 2010 445,018,352 425,535
Common shares issued 205,761,317 241,260
Balance, September 30, 2010 650,779,669 666,795
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$241.260 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 was US$385.000 million before underwriting and share issuance
cost.
c) Share options
During the three months ended, September 30, 2010 options were granted to
directors, officers and employees of the Company. The grant was made for 10,800
million stock options of which a third vested on the grant date resulting in a
charge of US$1.999 million to the income statement. The second and third tranche
will vest when certain production targets are met.
The following assumptions were used in the valuation process of the options
issued:
a risk free interest rate of 2.01%
a dividend yield of 0%
an expected volatility of 79%
an expected option life of 3.26 years
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 355 5,678
Finance cost (291) (4,344)
Present value 64 1,334
More than 5 years Total
$ 000 $ 000
Minimum lease payments 14,522 20,555
Finance cost (6,534) (11,169)
Present value 7,988 9,386
11. Decommissioning and rehabilitation provision
As at As at As at As at
Sept 30, Aug 31, Dec 31, Feb 28,
2010 2009 2009 2009
$ 000 $ 000 $ 000 $ 000
DISCOUNTED
Balance at the beginning of the
period 52,744 12,791 12,791 1,461
Increase in liability for the
period 35,042 10,885 36,272 11,629
Unwinding of interest (Accretion) 471 212 426 65
88,257 23,888 49,489 13,155
Effect of exchange rate changes 3,227 3,735 3,255 (364)
Balance at the end of the period 91,484 27,623 52,744 12,791
UNDISCOUNTED
Balance at the beginning of the
period 70,829 17,527 17,527 2,457
Increase in liability for the
period 45,479 13,625 47,080 15,684
116,308 31,152 64,607 18,141
Effect of exchange rate changes 4,333 4,973 6,222 (614)
Balance at the end of the period 120,641 36,125 70,829 17,527
During June 2010, bank guarantees to the value of USD$18.002 million (ZAR125.000
million) were provided to the DMR in respect of the rehabilitation liability as
at February 28, 2009.These guarantees are secured by cash deposited as
collateral with the issuing bank. A further guarantee of US$49.896 million
(ZAR346.464 million) in respect of the year ended December 31, 2009, was issued
on August 12, 2010 bringing the total amount of guarantees issued during the
nine months ended September 30, 2010 to US$67.898 million (ZAR471.464 million).
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 Sept 30, As at Aug 31,
2010 2009
$ 000 $ 000
Balance at the beginning of the period 5,854 -
Increase in liability for the period 32,925 -
Repayment of amounts owing (28,027) -
Interest accrued (76) -
10,676 -
Effect of exchange rate changes 226 -
Balance at the end of the period 10,902 -
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 Sept 30, As at Aug 31,
2010 2009
$ 000 $ 000
Balance at the beginning of the period - 38,752
- Bridge loan facility - -
- Pallinghurst short-term loan facility 26,603 -
Interest on borrowings 1,035 2,053
Settlement of bridge loan facility - (51,987)
27,638 (11,182)
Effect of exchange rate changes 2,085 11,182
Balance at the end of the period 29,723 -
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 September 30, 2010, a total of ZAR191 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 Sept 30, As at Aug 31,
2010 2009
$ 000 $ 000
135,000 -
Convertible debenture issued
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 1,969 -
Transaction costs (982) -
133,031 -
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$135.079 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$133 million.
15. (Loss) / income before taxation
For the three months ended
Sept 30, Aug 31,
2010 2009
$ 000 $ 000
Included in the general expenses are the following:
Audit fees 21 58
Consulting and professional fees (252) (143)
Depreciation (148) (89)
Employee expenses (2,134) (1,971)
General and administration expenses (1,986) (1,917)
Loss on disposal of fixed assets - -
Royalty taxes (73) -
Share based payments expense (2,346) (622)
(6,918) (4,684)
Included in other income are the following:
Foreign exchange gain / (loss) (17,090) 11,169
Loss on impairment of exploration project (37) -
Other income / (expense) 2 -
Share-based payment expense (fair value adjustment) (213) -
(17,338) 11,169
For the nine months ended
Sept 30, Aug 31,
2010 2009
$ 000 $ 000
Included in the general expenses are the following:
Audit fees (401) (387)
Consulting and professional fees (447) (7,391)
Depreciation (426) (263)
Employee expenses (6,497) (5,522)
General and administration expenses (4,910) (3,673)
Loss on disposal of fixed assets - 5
Royalty taxes (195) -
Share based payments expense (3,357) (3,520)
(16,233) (20,751)
Included in other income are the following:
Foreign exchange gain / (loss) (9,795) 2,458
Loss on impairment of exploration project (292) -
Other income / (expense) 1 1
Share-based payment expense (fair value adjustment) (23,668) -
(33,754) 2,459
16. (Loss) / earnings per share attributable to owners of the parent
For the three months ended
Sept 30, Aug 31,
2010 2009
$ 000 $ 000
Basic earnings / (loss) per share (0.05) 0.02
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) (26,910) 7,736
Weighted average number of shares used in the calculation
of basic earnings per share (`000) 513,605 420,013
For the nine months ended
Sept 30, Aug 31,
2010 2009
$ 000 $ 000
Basic earnings / (loss) per share (0.09) (0.05)
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) (51,182) (16,733)
Weighted average number of shares used in the calculation
of basic earnings per share (`000) 559,330 391,409
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 September 30, 2010 the
diluted (loss) / earnings per share is equal to the basic (loss) / earnings per
share.
Date: 15/11/2010 15:01:01 Produced by the JSE SENS Department.
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