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PLN
PLN
PLN - Platmin Limited - Condensed consolidated interim financial statements for
the three and six month periods ended June 30, 2011 and June 30, 2010
Platmin Limited
Incorporated in the accordance with the laws of British Columbia, Canada
Registration number: C0848954
Share code on TSX: PPN
Share code on AIM: PPN
Share code on JSE: PLN
ISIN: CA72765Y1097
("Platmin" or "the company")
Platmin Limited
(In Commercial production)
Condensed Consolidated Interim Financial Statements
for the three and six month periods ended June 30, 2011 and June 30, 2010
(Unaudited, expressed in United States dollars, unless otherwise stated)
Condensed consolidated interim statement of financial position
as at June 30, 2011
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
Jun 30, Dec 31,
2011 2010
Notes $ 000 $ 000
ASSETS
Non-current assets
Mining assets 39,917 49,886
Intangible assets 5 38,844 14,019
Property, plant and equipment 6 573,251 578,550
Loans receivable 65 63
Restricted cash investments and guarantees 8 172,408 84,471
Total non-current assets 824,485 726,989
Current assets
Inventories 7 9,007 11,285
Accounts and other receivables 52,883 46,877
Restricted cash 8 - 135,131
Cash and cash equivalents 9 160,060 188,596
Total current assets 221,950 381,889
TOTAL ASSETS 1,046,435 1,108,878
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 10 891,434 756,579
Accumulated deficit (134,650) (90,419)
Other components of equity 188,675 198,352
945,459 864,512
Non-controlling interests (43,902) (30,116)
Total equity 901,557 834,396
Non-current liabilities
Long-term borrowings 11 17,256 4,710
Finance lease liability 12 8,934 9,410
Decommissioning and rehabilitation provision 13 82,372 70,705
Total non-current liabilities 108,562 84,825
Current liabilities
Trade payables and accrued liabilities 24,736 20,747
Revolving commodity facility 14 11,448 3,468
Current portion of finance lease liability 12 132 291
Current portion of long-term borrowings 15 - 31,923
Convertible debenture 16 - 133,228
Total current liabilities 36,316 189,657
Total liabilities 144,878 274,482
TOTAL EQUITY AND LIABILITIES 1,046,435 1,108,878
NATURE OF OPERATIONS
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, 2011
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
For the three months ended
Jun 30, Jun 30,
2011 2010
Notes $ 000 $ 000
Revenue 34,489 -
Cost of operations 17 (53,763) -
Operating loss (19,274) -
Administrative and general expenses 18 (5,178) (4,922)
Other income/(expenses) 18 555 (16,407)
Finance income 1,684 -
Finance costs (970) (2,697)
Loss before taxation (23,183) (24,026)
LOSS FOR THE PERIOD (23,183) (24,026)
Loss attributable to:
Owners of the parent (16,429) (20,675)
Non-controlling interest (6,754) (3,351)
(23,183) (24,026)
Loss per share (in currency units)
attributable to owners of the parent:
Basic and diluted 19 (0.02) (0.04)
For the six months ended
Jun 30, Jun 30,
2011 2010
$ 000 $ 000
Revenue 60,527 -
Cost of operations (104,057) -
Operating loss (43,530) -
Administrative and general expenses (8,505) (9,315)
Other income/(expenses) (6,197) (16,416)
Finance income 3,474 -
Finance costs (3,259) (3,476)
Loss before taxation (58,017) (29,207)
LOSS FOR THE PERIOD (58,017) (29,207)
Loss attributable to:
Owners of the parent (44,231) (24,272)
Non-controlling interest (13,786) (4,935)
(58,017) (29,207)
Loss per share (in currency units) attributable to
owners of the
parent:
Basic and diluted (0.05) (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 six months ended June 30, 2011
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
For the three months ended
Jun 30, Jun 30,
2011 2010
Notes $ 000 $ 000
Loss for the period (23,183) (24,026)
Other comprehensive income (net of tax) 1,419 22,811
Exchange differences on translation from
functional to
presentation currency 1,419 22,811
Income tax relating to components of other
comprehensive
income - -
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD (21,764) (1,215)
Total comprehensive profit/( loss)
attributable to:
Owners of the parent (15,010) 2,136
Non-controlling interest (6,754) (3,351)
(21,764) (1,215)
For the six months ended
Jun 30, Jun 30,
2011 2010
$ 000 $ 000
Loss for the period (58,017) (29,207)
Other comprehensive income (net of tax) 24,040 20,219
Exchange differences on translation from functional to
presentation currency 24,040 20,219
Income tax relating to components of other comprehensive
income - -
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD (33,977) (8,988)
Total comprehensive profit/( loss) attributable to:
Owners of the parent (20,191) (4,053)
Non-controlling interest (13,786) (4,935)
(33,977) (8,988)
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, 2011
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
Condensed consolidated interim statement of changes in shareholders` equity
for the six months ended June 30, 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 241,523 - - -
Loss for the period - (24,272) - -
Stock based compensation - - 27,677 -
Other comprehensive income:
Currency translation adjustment - - - -
Balance at June 30, 2010 667,058 (59,274) 37,844 846
Shares issued 89,521 - - -
Loss for the period - (31,145) - -
Stock based compensation - - 4,384 -
Other comprehensive income:
Currency translation adjustment - - - -
Balance at December 31, 2010 756,579 (90,419) 42,228 846
Shares issued 134,855 - - -
Loss for the period - (44,231) - -
Stock based compensation - - 14,363 -
Other comprehensive income:
Currency translation adjustment - - - -
Balance at June 30, 2011 891,434 (134,650) 56,591 846
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 - 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) - (20,219)
Balance at June 30, 2010 51,355 697,829 (25,026) 672,803
Shares issued - 89,521 - 89,521
Loss for the period - (44,231) (5,090) (36,235)
Stock based compensation - 4,384 - 4,384
Other comprehensive
income:
Currency translation
adjustment 103,923 103,923 - 103,923
Balance at December 31,
2010 155,278 864,512 (30,116) 834,396
Shares issued - 134,855 - 134,855
Loss for the period - (39,459) (13,786) (58,017)
Stock based compensation - 14,363 - 14,363
Other comprehensive
income:
Currency translation
adjustment (24,040) (24,040) - (24,040)
Balance at June 30, 2011 131,238 945,459 (43,902) 901,557
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, 2011
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
For the three months ended
Jun 30, Jun 30,
2011 2010
Notes $ 000 $ 000
Cash flows from operating activities
Cash receipts from customers 22,790 19,879
Cash paid to suppliers and employees (45,830) (46,075)
Cash utilized in operations (23,040) (26,196)
Interest received 411 432
Interest paid 47 (307)
Net cash utilized in operating activities (22,582) (26,071)
Cash flows from investing activities
Purchase of property, plant and equipment (4,010) 517
Proceeds from fair value adjustments 4,874 -
Purchase of Sedibelo West - -
Additions to intangible assets (364) (1,065)
Increase in rehabilitation investment (166) (17,128)
Increase in deferred exploration expenses (619) (495)
Net cash utilized in investing activities (285) (18,171)
Cash flows from financing activities
Increase in loans payable - 12,645
Decrease in finance lease liability (475) (451)
Increase/(Decrease) in revolving commodity
facility 6,053 (8,592)
Realised foreign exchange (losses) / gains 237 (1)
Repayment of promissory note - -
Proceeds from issue of shares (33) 238,809
Net cash generated from financing activities 5,782 242,410
Net (decrease) / increase in cash and cash
equivalents (17,085) 198,168
Net foreign exchange differences (103) (3,129)
Cash and cash equivalents at the beginning of
the period 9 177,248 17,892
Cash and cash equivalents at the end of the
period 9 160,060 212,931
For the six months ended
Jun 30, Jun 30,
2011 2010
$ 000 $ 000
Cash flows from operating activities
Cash receipts from customers 53,089 35,609
Cash paid to suppliers and employees (94,429) (88,285)
Cash utilized in operations (41,340) (52,676)
Interest received 1,109 749
Interest paid (288) (679)
Net cash utilized in operating activities (40,519) (52,606)
Cash flows from investing activities
Purchase of property, plant and equipment (4,322) (697)
Proceeds from fair value adjustments 4,810 -
Purchase of Sedibelo West (79,666) -
Additions to intangible assets (12,659) (1,165)
Increase in rehabilitation investment (5,971) (17,658)
Increase in deferred exploration expenses (819) (909)
Net cash utilized in investing activities (98,627) (20,429)
Cash flows from financing activities
Increase in loans payable - 25,478
Decrease in finance lease liability (938) (911)
Increase/(Decrease) in revolving commodity facility 6,558 (3,654)
Realised foreign exchange (losses) / gains (1,387) (2)
Repayment of promissory note (29,106) -
Proceeds from issue of shares 130,797 239,352
Net cash generated from financing activities 105,924 260,263
Net (decrease) / increase in cash and cash
equivalents (33,222) 187,228
Net foreign exchange differences 4,686 (3,672)
Cash and cash equivalents at the beginning of the
period 188,596 29,375
Cash and cash equivalents at the end of the period 160,060 212,931
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, 2011
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
1. Nature of operations
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 and six months ended June 30, 2011 the Group incurred a loss of
US$23.183 million and US$58.017 million. At June 30, 2011 had an accumulated
deficit of US$134.650 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.
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$160.060 million in cash
and cash equivalents at June 30, 2011 to fund mining activities and meet its
contractual obligations.
2. Statement of compliance
The unaudited condensed consolidated interim financial statements for the three
and six months ended June 30, 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 10 August 2011.
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
Units of production (ore tonnes
Plant and equipment 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 six month periods ended is as follows:
Development and
Mining exploration
Jun 30, Jun 30, Jun 30, Jun 30,
Amounts in $ `000 2011 2010 2011 2010
Reportable items in the
Statement of Comprehensive Income
External revenues 60,527 33,696 - -
Intersegment revenue - - - -
EBITDA (33,919) (43,556) - -
Reportable items in the
Statement of Financial Position
Total assets 814,238 539,965 53,337 36,393
Additions to non-
current assets 17,730 697 24,867 155,604
Total liabilities 125,556 127,796 17,423 3,968
Administration Consolidated
Jun 30, Jun 30, Jun 30, Jun 30,
Amounts in $ `000 2011 2010 2011 2010
Reportable items in the
Statement of Comprehensive
Income
External revenues - - 60,527 33,696
Intersegment revenue - - - -
EBITDA (20,076) (28,651) (53,995) (72,207)
Reportable items in the
Statement of Financial
Position
Total assets 178,860 362,699 1,046,435 939,057
Additions to non-
current assets 4 909 42,601 157,210
Total liabilities 1,899 134,490 144,878 266,254
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 EBITDA to total comprehensive loss for the period is
provided as follows:
Consolidated
Jun 30, Jun 30,
2011 2010
$`000 $`000
Total EBITDA for reportable segments (53,995) (72,207)
Revenues offset against the cost of the plant
construction - (33,697)
Mining costs offset against the cost of the plant
construction - 73,156
Total EBITDA per Consolidated statement of income and
comprehensive income (53,995) (32,748)
Foreign exchange gains 8,436 7,295
Depreciation (12,673) (278)
Finance costs (net) 215 (3,476)
Loss before taxation (58,017) (29,207)
Income tax expense - -
Exchange differences on translating from functional
currency to presentation currency 24,040 20,219
Total comprehensive loss for the period (33,977) (8,988)
5. Intangible assets
As at Jun 30, As at Dec 31,
2011 2010
$ 000 $ 000
Water pipeline 13,067 13,070
ERP software 791 886
Computer software 46 63
SPV - Power and water rights 24,940 -
Balance at the end of the period 38,844 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 366 - 4
Amortization for the period - (71) (19)
Foreign exchange variance (369) (24) (2)
Balance as at June 30, 2011 13,067 791 46
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 24,420
Amortization for the period - (90)
Foreign exchange variance 890 495
Balance as at June 30, 2011 24,940 38,844
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 was US$24.050 million.
6. Property, plant and equipment
Plant
construction Deferred
and mine Plant and stripping
development equipment cost
$ 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
Transfers from Mining Assets - - -
Revenue adjustments - (2,796) -
Additions - 4,102 -
Foreign exchange movement - (6,684) (7,298)
Balance as at June 30, 2011 - 230,123 251,452
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 - 6,252 5,198
Foreign exchange movement - 90 75
Balance as at June 30, 2011 - 6,342 5,273
Decom-
missioning Producing Land and
asset mines buildings
$ 000 $ 000 $ 000
COST
Balance as at December 31, 2009 - - 1,025
Additions - - 55
Transfers - - -
Foreign exchange movement - - 120
Balance as at December 31, 2010 - - 1,200
Transfers 68,630 - -
Transfers from Mining Assets - 9,639 -
Revenue adjustments - - -
Additions 12,980 - 95
Foreign exchange movement (1,935) (256) (32)
Balance as at June 30, 2011 79,675 9,383 1,263
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 377 194 2
Foreign exchange movement 5 3 3
Balance as at June 30, 2011 382 197 5
Leased
Other assets TOTAL
$ 000 $ 000 $ 000
COST
Balance as at December 31, 2009 1,899 12,991 423,704
Additions 561 - 107,624
Transfers 23 - -
Foreign exchange movement 224 1,531 49,982
Balance as at December 31, 2010 2,707 14,522 581,310
Transfers - - -
Transfers from Mining Assets - - 9,639
Revenue adjustments - - (2,796)
Additions 187 - 17,364
Foreign exchange movement (75) (409) (16,689)
Balance as at June 30, 2011 2,819 14,113 588,828
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 252 435 12,710
Foreign exchange movement (34) (35) 107
Balance as at June 30, 2011 1,541 1,837 15,577
Plant
construction Deferred
and mine Plant and stripping
development equipment cost
$ 000 $ 000 $ 000
CARRYING AMOUNTS
At December 31, 2010 562,881 - -
At June 30, 2011 - 223,781 246,179
Decom-
missioning Producing Land and
asset mines buildings
$ 000 $ 000 $ 000
CARRYING AMOUNTS
At December 31, 2010 - - 1,200
At June 30, 2011 79,293 9,186 1,258
Leased
Other assets TOTAL
$ 000 $ 000 $ 000
CARRYING AMOUNTS
At December 31, 2010 1,384 13,085 578,550
At June 30, 2011 1,278 12,276 573,251
7. Inventories
As at Jun 30, As at Dec 31,
2011 2010
$ 000 $ 000
At cost
Ore stockpiled 2,823 4,424
Work in progress 986 2,258
Consumables 5,198 4,603
Balance at the end of the period 9,007 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 mineral 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 Jun 30, As at Dec 31,
2011 2010
$ 000 $ 000
Pilanesberg rehabilitation guarantee 81,577 76,430
ESKOM capital and supply guarantees 7,628 6,856
Mphahlele rehabilitation guarantee 1,198 1,077
Other guarantees 105 108
Escrow account for Sedibelo transaction 81,900 -
Balance at the end of the period 172,408 84,471
8.2 Restricted cash - current asset
As at Jun 30, 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 Jun 31, As at Dec 31,
2011 2010
$ 000 $ 000
Cash at bank and on hand 160,060 188,596
Total cash and cash equivalents 160,060 188,596
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
is 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 June 30, 2011
Balance, January 1, 2011 749,680,767 756,579
Common shares issued 160,714,286 134,855
Balance, June 30, 2011 910,395,053 891,434
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$134.855 million net of legal fees.
11. Long term borrowings
As at Jun 30, As at Dec 31,
2011 2010
$ 000 $ 000
Corridor Mining Resources (Pty) Ltd 4,756 4,681
Perilya Exploration (Pty) Ltd 30 29
SPV - Power and water rights 12,470 -
17,256 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$12,470 million at the closing rate of
ZAR6.7826 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
1 year 1 to 5 years
$ 000 $ 000
Minimum lease payments 713 7,132
Finance cost (581) (5,212)
Present value 132 1,920
More than
5 years Total
$ 000 $ 000
Minimum lease payments 11,747 19,592
Finance cost (4,733) (10,526)
Present value 7,014 9,066
13. Decommissioning and rehabilitation provision
As at As at
Jun 30, Dec 31,
2011 2010
$ 000 $ 000
Balance at the beginning of the period 70,705 52,744
Increase in liability for the period 12,990 10,435
Unwinding of interest (accretion) 671 1,307
84,366 64,486
Effect of exchange rate changes (1,994) 6,219
Balance at the end of the period 82,372 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 June 30, 2011 is US$100.052 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 7.95% 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, 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 Dec 31,
2011 2010
$ 000 $ 000
Balance at the beginning of the period 3,468 5,854
Increase in liability for the period 22,800 -
Repayment of amounts owing (15,146) (2,684)
Interest accrued 198 (48)
11,320 3,122
Effect of exchange rate changes 128 346
Balance at the end of the period 11,448 3,468
15. Current portion of long-term borrowings
As at Jun 30, 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
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 was 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 Jun 30, 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.
The transaction was accounted for under IFRS 2, Share based payments as the fair
value of the convertible debenture was greater than the proceeds received. On
initial recognition, the transaction gave rise to the recognition of proceeds of
US$135 million, a liability component recognised for the present value of the
contractual cash payments of US$132 million and an equity component of US$26.6
million. The difference between the proceeds and liability plus the equity was
recognised in the income statement. The modifications to the instrument resulted
in the equity component moving to US$42 million.Subsequent to the initial
recognition, the equity portion is not remeasured and remains in equity.
17. Cost of operations
Included in cost of operations:
For the three months ended
Jun 30, Jun 30,
2011 2010
$ 000 $ 000
On mine operations
Materials and mining costs 28,498 -
Concentrator plant operations
Materials and other costs 8,506 -
Utilities 3,535 -
Beneficiation
Smelting and refining costs 2,583 -
Transport 102 -
Salaries 706 -
Sub-total 43,930 -
Depreciation of operating assets (note 6) 6,272 -
Change in inventories 3,561 -
53,763 -
For the six months ended
Jun 30, Jun 30,
2011 2010
$ 000 $ 000
On mine operations
Materials and mining costs 58,274 -
Concentrator plant operations
Materials and other costs 17,936 -
Utilities 5,864 -
Beneficiation
Smelting and refining costs 4,463 -
Transport 177 -
Salaries 1,925 -
Sub-total 88,639 -
Depreciation of operating assets (note 6) 12,311 -
Change in inventories 3,107 -
104,057 -
18. Administrative and general expenses
For the three months ended
Jun 30, Jun 30,
2011 2010
$ 000 $ 000
Included in the administrative and general expenses are
the
following:
Audit fees (55) (242)
Consulting and professional fees (1,279) (23)
Employee expenses (2,090) (2,260)
General and administration expenses (519) (1,634)
Royalty taxes (148) (122)
Mining operations (966) -
Sub-total (5,057) (4,281)
Share based payment expense 21 (499)
Amortization and depreciation (142) (142)
(5,178) (4,922)
Included in other expenses are the following:
Foreign exchange gain / (loss) 624 7,304
Loss on impairment of exploration project - (255)
Other income / (expense) 121 (1)
Share-based payment expense (fair value adjustment) (190) (23,455)
555 (16,407)
For the six months ended
Jun 30, Jun 30,
2011 2010
$ 000 $ 000
Included in the administrative and general expenses are
the following:
Audit fees (201) (422)
Consulting and professional fees (1,524) (195)
Employee expenses (3,256) (4,363)
General and administration expenses (1,054) (2,924)
Royalty taxes (301) (122)
Mining operations (1,916) -
Sub-total (8,252) (8,026)
Share based payment expense 109 (1,011)
Amortization and depreciation (362) (278)
(8,505) (9,315)
Included in other expenses are the following:
Foreign exchange gain / (loss) 8,436 7,295
Loss on impairment of exploration project - (255)
Other income / (expense) 175 (1)
Share-based payment expense (fair value adjustment) (14,808) (23,455)
(6,197) (16,416)
19. Loss per share attributable to owners of the parent
For the three months ended
Jun 30, Jun 30,
2011 2010
Basic loss per share (USD) (0.02) (0.04)
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 (USD`000) (16,429) (20,675)
Weighted average number of shares used in the calculation
of basic loss per share (`000) 910,395 490,743
For the six months ended
Jun 30, Jun 30,
2011 2010
Basic loss per share (USD) (0.05) (0.05)
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 (USD`000) (44,231) (24,272)
Weighted average number of shares used in the calculation
of basic loss per share (`000) 856,824 513,605
There are no reconciling items between loss and headline loss and therefore loss
per share and headline loss per share are the same.
Due to the Group reporting a loss for the period ending June 30, 2011 the
diluted loss per share is equal to the basic loss per share.
Sponsor:
Investec Bank Limited
Date: 15/08/2011 15:15:00 Produced by the JSE SENS Department.
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