| Fri 13 May 2011, 15:00 | | 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 months ended March 31, 2011
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
Condensed Consolidated Interim Financial Statements for the three months ended
March 31, 2011
(
Unaudited, expressed in United States dollars, unless otherwise stated)
Condensed consolidated interim statement of financial position
as on March 31, 2011
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
Mar 31, Dec 31,
2011 2010
Notes $ 000 $ 000
ASSETS
Non-current assets
Mining assets 39,388 49,886
Intangible assets 5 38,590 14,019
Property, plant and equipment 6 570,494 578,550
Loans receivable 63 63
Restricted cash investments and guarantees 8 170,841 84,471
Total non-current assets 819,376 726,989
Current assets
Inventories 7 12,303 11,285
Accounts and other receivables 42,839 46,877
Restricted cash 8 - 135,131
Cash and cash equivalents 9 177,248 188,596
Total current assets 232,390 381,889
TOTAL ASSETS 1,051,766 1,108,878
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 10 891,551 756,579
Accumulated deficit (118,221) (90,419)
Other components of equity 190,107 198,352
963,437 864,512
Non-controlling interests (37,148) (30,116)
Total equity 926,289 834,396
Non-current liabilities
Long-term borrowings 11 17,179 4,710
Finance lease liability 12 9,067 9,410
Decommissioning and rehabilitation provision 13 76,077 70,705
Total non-current liabilities 102,323 84,825
Current liabilities
Trade payables and accrued liabilities 18,059 20,747
Revolving commodity facility 14 4,899 3,468
Current portion of finance lease liability 12 196 291
Current portion of long-term borrowings 15 - 31,923
Convertible debenture 16 - 133,228
Total current liabilities 23,154 189,657
Total liabilities 125,477 274,482
TOTAL EQUITY AND LIABILITIES 1,051,766 1,108,878
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 months ended March 31, 2011
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
For the three months ended
Mar 31, Mar 31,
2011 2010
Notes $ 000 $ 000
Revenue 26,038 -
Cost of operations 17 (50,294) -
Operating loss (24,256) -
Administrative and general expenses 18 (3,327) (4,393)
Other expenses 18 (6,752) (9)
Finance income 1,790 316
Finance costs (2,289) (1,095)
Loss before taxation (34,834) (5,181)
Income tax expense - -
LOSS FOR THE PERIOD (34,834) (5,181)
Loss attributable to:
Owners of the parent (27,802) (3,597)
Non-controlling interest (7,032) (1,584)
(34,834) (5,181)
Loss per share (in currency units) attributable $ $
to owners of the parent:
Basic and diluted 19 (0.04) (0.01)
The accompanying notes are an integral part of the condensed consolidated
interim financial statements
Condensed consolidated interim statement of comprehensive income
for the three months ended March 31, 2011
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
For the three months ended
Mar 31, Mar 31,
2011 2010
Notes $ 000 $ 000
(34,834) (5,181)
Loss for the period
Other comprehensive income (net of tax) 22,621 (2,592)
Exchange differences on translation from
functional to presentation currency 22,621 (2,592)
Income tax relating to components of other
comprehensive income - -
(12,213) (7,773)
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD
Total comprehensive loss attributable to:
Owners of the parent (5,181) (6,189)
Non-controlling interest (7,032) (1,584)
(12,213) (7,773)
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 months ended March 31, 2011
(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 December 31, 2009
425,535 (35,002) 10,167 846
Shares issued - - - -
Loss for the period - (3,597) - -
Stock based compensation - - 513 -
Other comprehensive income:
Currency translation adjustment - - - -
Balance at March 31, 2010 425,535 (38,599) 10,680 846
Foreign
Currency Non-
Translation controlling Total
Reserve Subtotal interest Equity
$ 000 $ 000 $ 000 $ 000
Balance at December 31, 2009 71,574 473,120 (20,091) 453,029
Shares issued - - - -
Loss for the period - (3,597) (1,584) (5,181)
Stock based compensation - 513 - 513
Other comprehensive income:
Currency translation
adjustment 2,592 2,592 - 2,592
Balance at March 31, 2010 74,166 472,628 (21,675) 450,953
Equity attributable to the shareholders
Share
Based
Share Payment
Capital Deficit Reserve Warrants
$ 000 $ 000 $ 000 $ 000
Balance at December 31, 2010 756,579 (90,419) 42,228 846
Shares issued 134,972 - - -
Loss for the period - (27,802) - -
Stock based compensation - - 14,376 -
Other comprehensive income: - - - -
Currency translation adjustment - - - -
Balance at March 31, 2011 891,551 (118,221) 56,604 846
Foreign
Currency Non-
Translation controlling Total
Reserve Subtotal interest Equity
$ 000 $ 000 $ 000 $ 000
Balance at December 31,
2010 155,278 864,512 (30,116) 834,396
Shares issued - 134,972 - 134,972
Loss for the period - (27,802) (7,032) (34,834)
Stock based compensation - 14,376 - 14,376
Other comprehensive income:
Currency translation
adjustment (22,621) (22,621) - (22,621)
Balance at March 31, 2011 132,657 963,437 (37,148) 926,289
The accompanying notes are an integral part of the condensed consolidated
interim financial statements
Condensed consolidated interim statement of cashflows
for the three months ended March 31, 2011
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
For the three months ended
Mar 31, Mar 31,
2011 2010
Notes $ 000 $ 000
Cash flows from operating activities
Cash receipts from customers 30,205 15,708
Cash paid to suppliers and employees (48,568) (42,167)
Cash utilized in operations (18,363) (26,459)
Interest received 694 (56)
Interest paid (330) -
Net cash used in operating activities (17,999) (26,515)
Cash flows from investing activities
Purchase of property, plant and equipment (360) (1,217)
Purchase of Sedibelo West (79,666) -
Additions to intangible assets (12,142) (98)
Increase in rehabilitation investment (5,732) (492)
Increase in deferred exploration expenses (205) (413)
Net cash used in investing activities (98,105) (2,220)
Cash flows from financing activities
Increase in loans payable - 12,824
Decrease in finance lease liability (463) (460)
Increase in revolving commodity facility 576 4,964
Realised foreign exchange gains (1,601) (1)
Repayment of promissory note (29,106) -
Proceeds from issue of shares 131,130 -
Net cash generated from financing activities 100,536 17,327
Net decrease in cash and cash equivalents (15,568) (11,408)
Net foreign exchange differences 4,220 (75)
Cash and cash equivalents at the beginning of
the period 9 188,596 29,375
Cash and cash equivalents at the end of the period 9 177,248 17,892
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 months ended March 31, 2011
(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 Natural
Resources Group engaged in the acquisition, exploration, development and
operation 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") under 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.
For the three months ended March 31, 2011 the Group incurred a loss of US$34.834
million and as at March 31, 2011 had an accumulated deficit of US$118.221
million. The Group is dependent on the successful operation of the Pilanesberg
Platinum Mine ("PPM") to generate cash flows in order to fund its operations and
pay debt as it becomes due. Such circumstances may cast significant 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 increased its equity with US$135.000 million by way of conversion of
the convertible debenture on March 31, 2011 and had US$177.248 million in cash
and cash equivalents at March 31, 2011 to fund mining 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
condensed consolidated interim 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
months ended March 31, 2011 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 year ended December 31, 2010.
The unaudited condensed consolidated interim financial statements, which have
been prepared on the going concern basis, were approved by the Board of
Directors on May 10, 2011.
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 year ended
December 31, 2010.
Upon declaring commercial production on January 1, 2011, the useful life of
assets has been calculated in accordance with the table as detailed below.
Property plant and equipment
Depreciation and amortization are calculated on a units-of-production method for
the mining assets and straight-line method for all other assets to write off the
cost of the assets to their residual values over their estimated useful lives.
The depreciation and amortization rates applicable to each category of property,
plant and equipment are as follows:
Useful life
Asset category (years)
Vehicles 5
Computer equipment 3
Office equipment 6
Furniture and fittings 6
Other equipment 5
Buildings 20
Leasehold improvements 5
Plant and equipment Units of production
(ore tonnes processed)
Deferred stripping costs, decommissioning assets Units of production
(ore tonnes mined)
Producing mines (exploration and evaluation assets) Units of production
(ore tonnes mined)
4. Segmented information
Management has determined the operating segments based on the reports reviewed
by the Executive Committee ("the 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 declared commercial production on January 1, 2011. 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 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 three month periods ended is as follows:
Development and
Mining exploration
Mar 31, Mar 31, Mar 31, Mar 31,
2011 2010 2011 2010
Amounts in $ `000
Reportable items in
the Statement of
Comprehensive Income
External revenues 26,038 18,503 - -
Intersegment revenue - - - -
Adjusted EBITDA (21,886) (19,320) - -
Reportable items in
the Statement of Financial
Position
Total assets 714,045 513,140 31,950 37,292
Additions to non-
current assets 4,748 1,217 24,234 905
Total liabilities 106,666 118,932 17,343 4,039
Administration Consolidated
Mar 31, Mar 31, Mar 31, Mar 31,
2011 2010 2011 2010
Amounts in $ `000
Reportable items in
the Statement of
Comprehensive Income
External revenues - - 26,038 18,503
Intersegment revenue - - - -
Adjusted EBITDA (16,411) (2,457) (38,297) (21,777)
Reportable items in the
Statement of Financial Position
Total assets 305,771 26,140 1,051,766 576,572
Additions to non- current
assets 1 98 28,983 2,220
Total liabilities 1,468 2,646 125,477 125,617
The amounts provided to the committee with respect to total assets and total
liabilities are measured in a manner consistent with that of the 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
Mar 31, Mar 31,
2011 2010
$`000 $`000
Total EBITDA for reportable segments (38,297) (21,777)
Revenues offset against the cost of the plant
construction (3,410) (18,503)
Mining costs offset against the cost of the plant
construction - 36,023
Total EBITDA per Consolidated statement of income and
comprehensive income (41,707) (4,257)
Foreign exchange gains 7,812 (9)
Depreciation (440) (136)
Finance costs (net) (499) (779)
Loss before taxation (34,834) (5,181)
Income tax expense - -
Exchange differences on translating from functional
currency to presentation currency 22,621 (2,592)
Total comprehensive loss for the period (12,213) (7,773)
5. Intangible assets As at Mar 31, As at Dec 31,
2011 2010
$ 000 $ 000
12,724 13,070
Water pipeline
ERP software 828 886
Computer software 56 63
Power and water rights 24,982 -
Balance at the end of the period 38,590 14,019
Reconciliation of intangible assets:
Water ERP Computer
pipeline Software software
$ 000 $ 000 $ 000
Balance as at December 31, 2009 8,479 772 97
Additions during the period 1,228 169 43
Reclassified from receivables 2,064 - -
Amortization for the period - (132) (80)
Foreign exchange variance 1,299 77 3
Balance as at December 31, 2010 13,070 886 63
Additions during the period - - 4
Amortization for the period - (34) (10)
Foreign exchange variance (346) (24) (1)
Balance as at March 31, 2011 12,724 828 56
Power and
water rights TOTAL
$ 000 $ 000
Balance as at December 31, 2009 - 9,348
Additions during the period - 1,440
Reclassified from receivables - 2,064
Amortization for the period - (212)
Foreign exchange variance - 1,379
Balance as at December 31, 2010 - 14,019
Additions during the period 24,050 24,054
Amortization for the period - (44)
Foreign exchange variance 932 561
Balance as at March 31, 2011 24,982 38,590
PPM entered into an agreement with The Board of Magalies Water, a State-owned
water board operating under the Water Services Act, Number 108 of 1997 as
amended, ("Magalies Water") and other parties to build a water pipeline and
related infrastructure from the Vaalkop Water Treatment Works to PPM. Upon
completion, the ownership of the water pipeline and related infrastructure will
remain with Magalies Water; however, PPM will have a right to use 9Ml a day
through the pipeline for the entire life of mine.
Platmin concluded, through a special purpose vehicle ("SPV") in which Platmin
indirectly holds a 50% interest, to purchase certain long lead items. These long
lead items, consisting of the power and water rights and obligations previously
acquired by Barrick Platinum SA (Pty) Ltd ("Barrick") in respect of the Sedibelo
mining area, form part of the Platmin acquisition of a portion of the Sedibelo
PGM Project concession ("Sedibelo West"). The acquisition consideration for the
transaction totalled US$24.050 million of which Platmin paid 50%.
6. Property, plant and equipment
Plant
construction Deferred Decom-
and mine Plant and stripping missioning
development equipment cost asset
$ 000 $ 000 $ 000 $ 000
COST
Balance as at December
31, 2009 407,789 - - -
Additions 107,008 - - -
Transfers (23) - - -
Foreign exchange movement 48,107 - - -
Balance as at December
31, 2010 562,881 - - -
Transfers (562,881) 235,501 258,750 68,630
Transfers from Mining Assets - - - -
Revenue adjustments - (3,410) - -
Additions - 1,083 - 6,926
Foreign exchange movement - (6,415) (6,879) (1,823)
Balance as at March 31, 2011 - 226,759 251,871 73,733
ACCUMULATED DEPRECIATION
Balance as at December 31, 2009 - - - -
Depreciation for the period - - - -
Foreign exchange movement - - - -
Balance as at December 31, 2010 - - - -
Depreciation for the period - 2,904 2,830 205
Foreign exchange movement - 95 82 7
Balance as at March 31, 2011 - 2,999 2,912 212
Producing Land and Leased
mines buildings Other assets TOTAL
$ 000 $ 000 $ 000 $ 000 $ 000
COST
Balance as at
December 31, 2009 - 1,025 1,899 12,991 423,704
Additions - 55 561 - 107,624
Transfers - - 23 - -
Foreign exchange movement - 120 224 1,531 49,982
Balance as at
December 31, 2010 - 1,200 2,707 14,522 581,310
Transfers - - - - -
Transfers from
Mining Assets 9,639 - - - 9,639
Revenue adjustments - - - - (3,410)
Additions - 2 76 - 8,087
Foreign exchange movement (256) (30) (23) (386) (15,812)
Balance as at March
31, 2011 9,383 1,172 2,760 14,136 579,814
ACCUMULATED DEPRECIATION
Balance as at
December 31, 2009 - - 759 474 1,233
Depreciation for the period - - 442 821 1,263
Foreign exchange movement - - 122 142 264
Balance as at
December 31, 2010 - - 1,323 1,437 2,760
Depreciation for the
period 105 3 170 215 6,432
Foreign exchange movement 3 2 (29) (32) 128
Balance as at March
31, 2011 108 5 1,464 1,620 9,320
6. Property, plant and equipment (continued)
Plant
construction Deferred Decom-
and mine Plant and stripping missioning
development equipment cost asset
$ 000 $ 000 $ 000 $ 000
CARRYING AMOUNTS
At December 31, 2010 562,881 - - -
At March 31, 2011 - 223,760 248,959 73,521
Producing Land and Leased
mines buildings Other assets TOTAL
$ 000 $ 000 $ 000 $ 000 $ 000
CARRYING AMOUNTS
At December 31, 2010 - 1,200 1,384 13,085 578,550
At March 31, 2011 9,275 1,167 1,296 12,516 570,494
7. Inventories
As at Mar 31, As at Dec 31,
2011 2010
$ 000 $ 000
At cost
Ore stockpiled 4,154 4,424
Work in progress 2,818 2,258
Consumables 5,331 4,603
Balance at the end of the period 12,303 11,285
8. Restricted cash
8.1 Restricted cash investments and guarantees - non-current asset
Cash investments were made relating to certain guarantees required by the
Republic of South Africa`s Department of Mineral Resources ("DMR"), formerly
known as the Department of Minerals and Energy, and ESKOM Holdings Limited
("ESKOM"), the South African state utility supplier of electricity, of which the
details are as follows:
Rehabilitation guarantees
The DMR requires rehabilitation guarantees for all prospecting and mining
rights. These rehabilitation guarantees primarily relate to the mining rights
for the Pilanesberg and Mphahlele Projects. These guarantees have been provided
to the DMR on two separate basis:
- by the issuance of the guarantee by an insurance company, with a portion of
the total guarantee being paid over into a separate bank account of the Group
and ceded in favour of the insurance company and the remaining portion paid in
premiums to the insurance company over the expected life of the mine; and
- on a cash backed basis.
ESKOM guarantees
On June 17, 2008 a guarantee was issued by Lombard Insurance Company Limited
("Lombard Insurance"), to ESKOM to order critical long lead time material for
the construction of the electrical substation at PPM. Lombard Insurance required
cash collateral on a portion of the guarantee. The cash collateral is held in a
separate bank account controlled by the Group and ceded in favour of Lombard
Insurance. The balance of the amount guaranteed by Lombard Insurance is payable
on a premium basis over 5 years and re-assessed on an annual basis.
Escrow
On March 23, 2011, the Company entered into a transaction to acquire an
incremental 5.99 million 4E PGM inferred resource ounces contained within
Sedibelo West from the Bakgatla Ba Kgafela Tribe and Itereleng Bakgatla Mineral
Resources (Pty) Limited, for an aggregate consideration of US$75.000 million in
cash. The total purchase price of US$82.000 million (including VAT of US$7.000
million on a portion of the purchase price) was classified as restricted cash in
anticipation of the transferring thereof to a nominated Escrow account.
As at Mar 31, As at Dec 31,
2011 2010
$ 000 $ 000
Pilanesberg rehabilitation guarantee 80,549 76,430
ESKOM capital and supply guarantees 7,075 6,856
Mphahlele rehabilitation guarantee 1,111 1,077
Other guarantees 106 108
Escrow account for Sedibelo transaction 82,000 -
Balance at the end of the period 170,841 84,471
8.2 Restricted cash - current asset
As at Mar 31, As at Dec 31,
2011 2010
$ 000 $ 000
Cash collateral for convertible debentures - 135,131
Balance at the end of the period - 135,131
On May 13, 2010, the Company issued US$135.000 million of convertible
debentures. The cash collateral represents the funds received and the interest
accrued thereon to date. The debentures were converted on March 31, 2011.
9. Cash and cash equivalents
As at Mar 31, As at Dec 31,
2011 2010
$ 000 $ 000
Cash at bank and on hand 177,248 188,596
Total cash and cash equivalents 177,248 188,596
Cash at bank earns interest at a floating rate based on daily bank deposit
rates. Cash is deposited at 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.
For the purpose of the condensed consolidated interim statement of cash flows,
cash and cash equivalents comprise only the cash at bank and on hand line-item
as disclosed for each period end above.
10. 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, 2010 shares $000
Balance, January 1, 2010 445,018,352 425,535
Common shares issued 304,662,415 331,044
Balance, December 31, 2010 749,680,767 756,579
Movement during the period ended March 31, 2011
Balance, January 1, 2011 749,680,767 756,579
Common shares issued 160,714,286 134,972
Balance, Mar 31, 2011 910,395,053 891,551
On March 31, 2011, upon conversion of the convertible debenture issued on May
13, 2010, the Company issued 160,714,286 new common shares at a price of US$0.84
per common share for a total consideration of US$135.000 million, raising
US$134.972 million net of legal fees.
11. Long term borrowings
As at Mar 31, As at Dec 31,
2011 2010
$ 000 $ 000
Corridor Mining Resources (Pty) Ltd 4,659 4,681
Perilya Exploration (Pty) Ltd 29 29
SPV 12,491 -
17,179 4,710
The acquisition consideration for the long lead items purchased from Barrick by
the SPV (as disclosed in note 5) was funded through shareholder loans advanced
to the SPV. Platmin`s portion of these loans amounted to US$12,025 million. The
remaining shareholder`s portion is US$12,491 million at the closing rate of
ZAR6.7713 to US$1.00
12. Finance lease liability
ESKOM designed and built an electrical installation adjacent to PPM to produce
the required electricity and 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 More than
1 year 1 to 5 years 5 years Total
$ 000 $ 000 $ 000 $ 000
Minimum lease payments 1,072 7,144 11,767 19,983
Finance cost (876) (6,295) (3,549) (10,720)
Present value 196 849 8,218 9,263
13. Decommissioning and rehabilitation provision
As at As at
Mar 31, Dec 31,
2011 2010
$ 000 $ 000
Balance at the beginning of the period 70,705 52,744
Increase in liability for the period 6,936 10,435
Unwinding of interest (accretion) 316 1,307
77,957 64,486
Effect of exchange rate changes (1,880) 6,219
Balance at the end of the period 76,077 70,705
The estimate represents the discounted 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. The estimated undiscounted liability for the asset retirement
obligation at March 31, 2011 is US$92.828 million (December 31, 2010: US$86.667
million). 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 asset retirement
obligation has been determined using a discount rate of 8.6% and an inflation
rate of 6% over a period of 12 years.
14. 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 and gold 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 Mar 31, As at Dec 31,
2011 2010
$ 000 $ 000
Balance at the beginning of the period 3,468 5,854
Increase in liability for the period 11,377 -
Repayment of amounts owing (10,084) (2,684)
Interest accrued (297) (48)
4,464 3,122
Effect of exchange rate changes 435 346
Balance at the end of the period 4,899 3,468
15. Current portion of long-term borrowings
As at Mar 31, As at Dec 31,
2011 2010
$ 000 $ 000
Balance at the beginning of the period 31,923 -
- Pallinghurst short-term facility - 26,603
Interest on borrowings 365 1,620
Settlement of borrowings (28,822) -
3,466 28,223
Effect of exchange rate changes (3,466) 3,700
Balance at the end of the period - 31,923
A bridge loan facility for PPM of US$35.000 million (ZAR350.000 million) was
concluded with Standard Bank in May 2008. The term of the bridge loan facility
was initially to August 31, 2008 but subsequently extended and repaid in full on
August 31, 2009 in the amount of ZAR404.354 million, including interest accrued
(US$51.987 million).
In connection with this facility, the Company issued 300,000 warrants
exercisable at US$6.95 per common share from September 15, 2008 until expiry of
the warrants on May 14, 2011. The fair value of the warrants of US$0.846 has
been treated as a cost of the transaction and fully amortized during the year
ended February 28, 2009.
The Company has classified this facility as held to maturity and the fair value
of the warrants of US$846,238 has been treated as a cost of the loan transaction
and has been amortized to net income using the effective interest method over
the facility term.
On March 22, 2010, a subsidiary of Platmin entered into a ZAR191.000 million
short term lending facility (the equivalent of US$26.000 million at an exchange
rate of ZAR7.38 to the US dollar) with Pallinghurst Resources Limited
("Pallinghurst"). As at December 31, 2010, a total of ZAR191.000 million had
been drawn against this facility. This facility was initially for a period of 3
months but has been extended until February 28, 2011 and was repaid in full on
February 28, 2011.
16. Convertible debenture
Option
component
accounted for Liability
in equity component
$ 000 $ 000
Convertible debenture issued 26,664 132,044
Fair value adjustment at extension date 1,238 (1,060)
Interest for the period - 3,241
Transaction costs - (1,128)
Effect of exchange rate changes - 131
Balance as at Dec 31, 2010 27,902 133,228
Fair value adjustment at extension date 7,908 -
Fair value adjustment at modification date 6,556 -
Interest for the period - 976
42,366 134,204
Effect of exchange rate changes - 796
Conversion of debenture - (135,000)
Balance as at Mar 31, 2011 42,366 -
On May 13, 2010, the Company issued US$135.000 million of zero percent
convertible debentures, initially subject to conversion by December 31, 2010 at
a price of US$1.215 that would have resulted in 111,111,111 shares being issued.
The maturity date of the convertible debentures was extended from December 31,
2010 to February 28, 2011 and subsequently to March 31, 2011, and the conversion
price reduced from US$1.215 to US$0.84.
On March 31, 2011, all the conditions precedent for the conversion of the
convertible debentures had been fulfilled and conversion took place at US$0.84
per share. A total of 160,714,286 new shares were issued.
17. Cost of operations
Included in cost of operations:
For the three months ended
Mar 31, Mar 31,
2011 2010
$ 000 $ 000
On mine operations
Materials and mining costs 29,776 -
Concentrator plant operations
Materials and other costs 9,430 -
Utilities 2,329 -
Beneficiation
Smelting and refining costs 1,880 -
Transport 75 -
Salaries 1,219 -
Sub-total 44,709 -
Depreciation of operating assets (note 6) 6,039 -
Change in inventories (454) -
50,294 -
18. Administrative and general expenses
For the three months ended
Mar 31, Mar 31,
2011 2010
$ 000 $ 000
Included in administrative and general expenses are the
following:
Employee expenses (1,166) (2,103)
Mining operations (950) -
Consulting and professional fees (245) (172)
Royalty tax (153) -
Audit fees (146) (180)
General and administration expenses (315) (1,290)
Sub-total (2,975) (3,745)
Share based payments expense 88 (512)
Amortization and depreciation (440) (136)
Included in other expenses are the following: (3,327) (4,393)
Other income 54 -
Share-based payment expense (fair value adjustment) (14,618) -
Foreign exchange gain / (loss) 7,812 (9)
(6,752) (9)
19. Loss per share attributable to owners of the parent
For the three months ended
Mar 31, Mar 31,
2011 2010
Basic loss per share (US$) (0.04) (0.01)
Basic loss per share is calculated by dividing the net
loss for the period / year attributable to
owners of the parent by the weighted average number of
ordinary shares outstanding during the period/ year
Reconciliations:
Net loss used in calculating basic earnings per share
attributable to owners of the parent (US$`000) (27,802) (3,597)
Weighted average number of shares used in the calculation
of basic earnings per share (`000) 749,681 445,018
There are no reconciling items between loss and headline loss and therefore the
loss per share and headline loss per share are the same.
Due to the Group reporting a loss for the period ending March 31, 2011 the
diluted loss per share is equal to the basic loss per share.
20. Events after the reporting period
On April 20, 2011, the Company transferred the purchase consideration of
US$82.000 million for the incremental 5.99 million 4E PGM inferred resource
ounces contained within Sedibelo West to an Escrow account. Upon approval by the
DMR of the Section 102 or Section 11(a) application in terms of the Mineral and
Petroleum Resources Development Act to incorporate this area as part of the
Tuschenkomst Mining Right, these funds will be released to the vendors.
Date: 13/05/2011 15:00:01 Produced by the JSE SENS Department.
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