| Thu 31 Mar 2011, 15:02 | | PLN - Platmin Limited - Build-Up Continues |
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PLN
PLN
PLN - Platmin Limited - Build-Up Continues
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
BUILD-UP CONTINUES - DISPATCHED METAL MORE THAN DOUBLES IN 2010; CONSOLIDATION
BEGINS; US$135M DEBENTURES CONVERTED; COMMERCIAL PRODUCTION DECLARED:
NOT FOR DISSEMINATION IN THE UNITED STATES OR OVER UNITED STATES NEWSWIRE
SERVICES
March 31, 2011: TORONTO: Platmin Limited ("Platmin" or "the Company"; TSX/AIM:
PPN; JSE: PLN) today announced production results from its Pilanesberg Platinum
Mine ("PPM") and financial results for the twelve months ended December 31,
2010. This release should be read in conjunction with the Company`s Financial
Statements, Management Discussion & Analysis and Annual Information Form,
available at www.platmin.com and filed on www.sedar.com. Platmin changed its
financial year end from the last day of February in each calendar year to the
last day of December, effective for the ten months ended December 31, 2009.
The principal focus of the Company`s activities during 2010 was the operation
and development of PPM, with mining and processing activities building up
towards a 4E (3 PGM + Au) metal sales target of the 20 000 oz per month as
forecast in the bankable feasibility study completed in 2007. Good progress
with laying the foundation for sustainable higher future metal output was made
during the year. A total of 20 961 4E ounces were dispatched and sold for the
quarter ended December 31, 2010. This is equivalent to annual production of some
84 000 4E ounces. The 60 067 oz dispatched for FY2010 were more than twice the
27 865 oz dispatched for FY2009.
Operational high-lights for FY2010 of particular significance for future
production were:- a full upgrade of the geological model, incorporating up-to-
date geological information and facilitating improvements to detailed planning;
debottlenecking the run-of-mine feed arrangements via the installation of three
vibrating feeders; improvements to metallurgical recoveries from the high-grade
UG2 reef, from 40% to 65%, and lesser improvements in the Merensky plant;
concerted and determined action by both the CEO and MD of MCC, our mining
contractor, to procure higher run times from their fleet, and improved operating
and maintenance procedures in the concentrator.
Commenting on operations, Tom Dale, Platmin CEO, said "This is a big ship. We
move 4 million tonnes of rock per month. We want to move 5 million tonnes per
month, in the short term, to expose the reef necessary to create operating
flexibility. We now have an experienced, motivated crew in place and the ship is
turning. The progress made during 2010 will support consistent improvements to
metal output in 2011 and 2012. Hence, I expect us to reach monthly operating
break even (about 12 500 oz) during 2011 and full monthly production of 20 000
oz during 2012."
The Company had unrestricted cash and cash equivalents of US$188.596 million at
December 31, 2010, compared with US$29.375 million at December 31, 2009. The net
increase in cash and cash equivalents is primarily due to the capital raisings
of US$250.000 million and US$90.000 million completed during May 2010 and
December 2010 respectively.
Metal prices continued to recover through the year and Platmin achieved an
average gross 4E basket price of US$1,405 per ounce (ZAR10,235 per ounce) at an
average exchange rate for the twelve month period of ZAR7.28=US$1.00. The rise
in prices during the year was countered somewhat by the strengthening South
African rand over the period. During the 12 months to December 31, 2010, gross
revenue generated from metal dispatched and sold of US$91.028 million was off-
set against operating costs of US$177.689 million, resulting in capitalized net
operating costs of US$86.661 million.
Reflecting the build-up phase of the Company, Platmin recorded a loss for the
year ended December 31, 2010, excluding capitalized losses from operations, of
US$28.516 million before taking into account the US$24.120 million non-cash
based fair value loss adjustment on the convertible debenture issued in May 2010
and the foreign exchange loss of US$12.806 million due to the South African rand
strengthening against the US dollar and the subsequent revaluation of cash held
in a currency other than the Company`s functional currency. In total, the loss
for the year ended December 31, 2010 was US$65.442 million, or US$0.09 per
share, compared with a net loss of US$11.115 million or a loss of US$0.02 per
share, for the ten months ended December 31, 2009.
The loss reported for the year, excludes net operating costs at PPM that were
capitalized, of US$86.661 million (ZAR571.203 million), compared to US$59.574
million (ZAR438.361 million) for the ten months ended December 31, 2009. As at
December 31, 2010, the total project capital expenditure for the development of
PPM, including plant capital expenditure, capitalised pre-production costs, and
offsetting revenue from metal sales during the pre-production phase, amounted to
US$562.881 million (ZAR3.709 billion). With effect from January 1, 2011, PPM
declared commercial production which will result in all revenue, mine operating
costs and amortization of the total capitalized cost over the remaining life of
mine, being reported through the Statement of Income. The Mphahlele, Grootboom
and Loskop projects continue on a reduced work program, and in the short term,
Platmin will commit sufficient expenditure to these projects, funded from
existing cash on hand, to ensure that the new order prospecting and mining
rights are preserved.
Significant developments during the quarter included:
the resumption of PGM concentrate dispatches to the smelter at the Northam
Platinum Limited
("Northam") Zondereinde mine on October 25, 2010, following the conclusion of a
six-week strike at the Northam mine on October 18, 2010.
On December 17, 2010, the Company concluded the placement of 98,901,099 new
common shares at a price of US$0.91 (CAD$0.93) per common share for total gross
proceeds of US$90.000 million; and
On December 22, 2010, the holders of US$135.000 million of convertible
debentures that were issued on May 13, 2010, requested and the Company accepted
an extension of the maturity date of the bonds from December 31, 2010 to
February 28, 2011.
Events subsequent to December 31, 2010
On February 18, 2011, the company announced that agreements have been executed
with the holders of the $135.000 million convertible debentures to extend the
maturity date from February 28, 2011 to March, 31, 2011 and to reduce the
conversion price from US$1.215 to US$0.84. Upon conversion this would result in
a further 160,714,287 shares being issued.
On February 28, 2011, the Company repaid in full the Pallinghurst Resources
Limited promissory note of US$26.000 million plus accrued interest and costs.
On March 23, 2011, Platmin announced the acquisition of an incremental 5.99
million 4E (3PGE+Au) PGM inferred resource ounces (42.57 million tonnes at a
grade of 4.38g/t) contained within the western portion of the Sedibelo PGM
Project concession ("Sedibelo West"), which is contiguous with and down-dip of
the eastern boundary of PPM, from the Bakgatla-Ba-Kgafela Tribe ("Bakgatla") and
Itereleng Bakgatla Mineral Resources (Pty) Limited ("IBMR"), for an aggregate
consideration of US$75.000 million in cash (equivalent to US$12.50 per 4E PGM
inferred resource ounce) to be funded from existing cash resources. In addition
to the Sedibelo West purchase, Platmin has also acquired for a total
consideration of $12.034 million, an effective 50% interest in an infrastructure
vehicle which acquired the infrastructure rights and assets for power and water
for this project previously owned by Barrick Platinum (South Africa) (Pty) Ltd.
This acquisition has been completed in partnership with the Bakgatla and Ivy
Lane Capital Limited (a Pallinghurst-related entity) which will jointly own the
other 50%.
On March 23, 2011, Platmin formally announced that Kgosi Molefe John Pilane had
been invited to join the board of Platmin. He is the appointed traditional
leader of the Bakgatla community.
March 31, 2011, the Company announced that all the conditions precedent for the
conversion of the $135.000 million in convertible debentures had been fulfilled
and that conversion had taken place at US$0.84 per share. A total of
160,714,287 new shares are to be issued resulting in a total of 910,395,054
shares in issue.
Mr Wayne Koonin the Chief Financial Officer of the Company has resigned with
effect from May 31, 2011, to take up another senior financial role in the mining
industry. The replacement for Mr Koonin has been identified and is set to join
the company shortly, providing sufficient time for a seamless handover period.
An announcement to this effect will be made shortly.
Commenting on the year, Tom Dale, Platmin CEO highlighted the progress made
during 2010 at PPM. I am delighted by our acquisition of Sedibelo West which
showcases the calibre of our partnership with the Bakgatla-Ba-Kgafela. These
additional PGM resource ounces will:- extend the life of PPM`s Tuschenkomst pit;
create operating flexibility, specifically in the north pit, and give us direct
access to sulphide ores with their higher metallurgical recoveries.
Commercial production has been declared from January 1, 2011 and continued rock-
solid support from our shareholder base underpins our efforts to create a
significant, quality PGM-producer on the western limb of the Bushveld Complex."
Commenting on Mr Koonin`s resignation, Mr Dale said that "a man of Wayne`s
technical financial ability and work ethic is a valuable asset in any business
and he played a key role during the past 2 years since Pallinghurst invested
into Platmin. On behalf of the Board, we thank him for his contribution and wish
him well in his new position."
Platmin`s chairman Brian Gilbertson said: "I thank Wayne Koonin for his hard
work and contribution over the past two years and wish him well in his future
endeavours".
About Platmin
Platmin`s primary asset is the Pilanesberg Platinum Mine, which is building up
to full production from the Tuschenkomst pit. The focus of the Company is on
achieving the metal production forecasts predicted in the bankable feasibility
study for the project and participating in the value creation of developing the
western limb of the Bushveld Complex. Platmin also hold interests in projects on
the eastern limb.
National Instrument 43-101 Disclosures
Under National Instrument 43-101 ("NI 43-101") of the Canadian Securities
Administrators, the Qualified Person for the Sedibelo West property is Mr. Terry
Holohan, a Qualified Person as defined by NI 43-101. Mr. Holohan is not
independent of Platmin for purposes of NI 43-101. He has reviewed and verified
the contents of this press release. The effective date of the mineral resources
disclosed in this press release is March 31, 2011. A cut-off grade of 0.5 g/t 4E
was used in the estimation. Individual metal grades within the resource are 2.63
g/t Pt, 1.29 g/t Pd, 0.33 g/t Rh, and 0.13 g/t Au. The method used for
estimation was ordinary co-kriging.
AIM Disclosures
Application has been made to the London Stock Exchange for the 160,714,287 new
common shares to be issued which will rank pari passu with existing shares of
the Company. This admission is expected to become effective and dealings to
commence in the shares on 6 April 2011. In accordance with Disclosure and
Transparency Rule 5.6.1, following admission of the new shares, the total number
of voting rights in Platmin will be 910,395,054 . The above figure may be used
by shareholders as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or a change to their
interest in, Platmin under the FSA`s Disclosure and Transparency Rules.
For further information:
Charmane Russell Russell & Associates+27 11 880 3924
+27 82 372 5816
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This market release contains ``forward-looking information`` which may include,
but is not limited to, statements with respect to the future financial and
operating performance of Platmin Limited (the "Company" or "Platmin"), its
subsidiaries and affiliated companies, and its mineral projects, the future
price of platinum or other Platinum Group Elements ("PGEs"), PGE production
levels, mining rates, the future price of other base metals, future exchange
rates, the estimation of mineral resources and reserves, the realization of
mineral resource estimates or their conversion into reserves, costs and future
costs of production, capital and exploration expenditures, including remaining
project development expenditure at the Pilanesberg Platinum Mine ("PPM"), costs
and timing of the development of new deposits, costs and timing of the
development of new mines, costs and timing of future exploration, requirements
for additional capital, government regulation of mining operations and
exploration operations, timing and receipt of approvals, licenses, and
conversions under South African mineral legislation, environmental risks, title
disputes or claims, limitations of insurance coverage and the timing and outcome
of regulatory matters. Often, but not always, forward-looking statements can be
identified by the use of words such as ``plans``, ``expects``, ``is expected``,
``budget``, ``scheduled``, ``estimates``, ``forecasts``, ``intends``,
``anticipates``, "targeted" or ``believes`` or variations (including negative
variations) of such words and phrases, or state that certain actions, events or
results ``may``, ``could``, ``would``, ``might`` or ``will`` be taken, occur or
be achieved.
Forward-looking statements in this market release, amongst others, forecast
production and sales reaching a monthly rate of 12 500 4E ounces during the 2011
year and 20 000 4E ounces during the 2012 year; recovery rates and grade;
targets, estimates and assumptions in respect of platinum and other PGM prices
and production; allocation of funds for current commitments; and the timing and
completion of definitive feasibility work at the Mphahlele, Grootboom and Loskop
Projects.
Such forward-looking statements are based on a number of material factors and
assumptions, including, that contracted parties provide goods and/or services on
the agreed timeframes, that budgets and production forecasts are accurate, that
equipment necessary for construction and development is available as scheduled
and does not incur unforeseen break downs, that no labour shortages or delays
are incurred, that plant and equipment functions as specified, that geological
or financial parameters do not necessitate future mine plan changes, that no
unusual geological or technical problems occur, and that grades and recovery
rates are as anticipated in mine planning.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
Platmin and/or its subsidiaries and/or its affiliated companies to be materially
different from any future results, performance or achievements expressed or
implied by the forward-looking statements. Such factors include, among others,
general business, economic, competitive, political and social uncertainties; the
actual results of current exploration and mining activities; development and
operational risks; title risks; regulatory risks; conclusions of economic
evaluations and studies; fluctuations in the value of the United States dollar
relative to the Canadian dollar or South African rand; changes in project
parameters as plans continue to be refined; future prices of platinum or other
PGEs; possible variations of ore grade or recovery rates (including the
existence of potholes, faults and other geological conditions that may affect
the existence or recovery of resources and reserves); failure of plant,
equipment or processes to operate as anticipated; accidents, labour disputes,
industrial unrest and strikes and other risks of the mining industry; political
instability, insurrection or war; the effect of HIV/AIDS on labour force
availability and turnover; delays in obtaining governmental approvals or
financing or in the completion of development or construction activities, as
well as those factors communicated in the section entitled ``Risk Factors`` of
Platmin`s current Annual Information Form ("AIF") and its final short form
prospectus dated May 5, 2010, which can both be viewed at www.sedar.com.
Although Platmin has attempted to identify important factors that could cause
actual actions, events or results to differ materially from those described in
forward-looking statements, there may be other factors that cause actions,
events or results to differ from those anticipated, estimated or intended.
Forward-looking statements contained herein are made as of the date of the MD&A
and Platmin disclaims any obligation to update any forward-looking statements,
whether as a result of new information, future events or results or otherwise.
There can be no assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place undue
reliance on forward-looking statements due to the inherent uncertainty therein.
Investment Bank and Sponsor:
Investec Bank Limited
31 March 2011
Date: 31/03/2011 15:02:01 Produced by the JSE SENS Department.
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