| Mon 7 Nov 2011, 15:00 | | PLN - Platmin Limited - Results for quarter ended 30 September 2011 |
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PLN
PLN
PLN - Platmin Limited - Results for quarter ended 30 September 2011
Platmin Limited
Incorporated in the accordance with the laws of Canada
Registration number: 610178-0
Share code on TSX: PPN
Share code on JSE: PLN
ISIN: CA72765Y1097
Condensed Consolidated Interim Financial Statements
for the three and nine months ended September 30, 2011 and
September 30, 2010
(Unaudited, expressed in United States dollars, unless otherwise stated)
Condensed consolidated interim statement of financial position
as at September 30, 2011
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
Sep 30, Dec 31,
2011 2010
Notes $000 $000
ASSETS
Non-current assets
Mining assets 36,485 49,886
Intangible assets 5 32,981 14,019
Property, plant and equipment 6 490,798 578,550
Loans receivable 57 63
Restricted cash investments and guarantees 8 160,047 84,471
Total non-current assets 720,368 726,989
Current assets
Inventories 7 8,776 11,285
Accounts and other receivables 36,969 46,877
Restricted cash 8 - 135,131
Cash and cash equivalents 9 131,898 188,596
Total current assets 177,643 381,889
TOTAL ASSETS 898,011 1,108,878
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 10 891,434 756,579
Accumulated deficit (120,909) (90,419)
Other components of equity 51,932 198,352
822,457 864,512
Non-controlling interests (50,155) (30,116)
Total equity 772,302 834,396
Non-current liabilities
Long-term borrowings 11 14,758 4,710
Finance lease liability 12 7,492 9,410
Decommissioning and rehabilitation provision 13 74,431 70,705
Total non-current liabilities 96,681 84,825
Current liabilities
Trade payables and accrued liabilities 21,230 20,747
Revolving commodity facility 14 7,741 3,468
Current portion of finance lease liability 12 57 291
Current portion of long-term borrowings 15 - 31,923
Convertible debenture 16 - 133,228
Total current liabilities 29,028 189,657
Total liabilities 125,709 274,482
TOTAL EQUITY AND LIABILITIES 898,011 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 September 30, 2011
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
For the three months For the nine months
ended ended
Sep 30, Sep 30, Sep 30, Sep 30,
2011 2010 2011 2010
Notes $000 $000 $000 $000
Revenue 22,559 - 83,086 -
Cost of operations 17 (45,024) - (149,081) -
Operating loss (22,465) - (65,995) -
Administrative and
general expenses 18 (7,136) (6,918) (15,642) (16,233)
Other income/(expenses) 18 36,749 (17,338) 30,553 (33,754)
Finance income 1,374 - 4,848 -
Finance costs (1,034) (1,778) (4,293) (5,254)
PROFIT/(LOSS) FOR THE PERIOD 7,488 (26,034) (50,529) (55,241)
Profit/(Loss)
attributable to:
Owners of the parent 13,741 (26,910) (30,490) (51,182)
Non-controlling interest (6,253) 876 (20,039) (4,059)
7,488 (26,034) (50,529) (55,241)
Earnings/(Loss) per
share (in currency
units) attributable to
owners of the parent:
Basic and diluted 19 0.02 (0.05) (0.03) (0.09)
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, 2011
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
For the three months For the nine months
ended ended
Sep 30, Sep 30, Sep 30, Sep 30,
2011 2010 2011 2010
Notes $000 $000 $000 $000
Profit/(Loss) for
the period 7,488 (26,034) (50,529) (55,241)
Other comprehensive
income (net of tax) (136,803) 22,445 (160,843) 42,664
Exchange differences
on translation from
functional to
presentation currency (136,803) 22,445 (160,843) 42,664
Income tax relating to
components of other
comprehensive income - - - -
TOTAL COMPREHENSIVE
LOSS FOR THE PERIOD (129,315) (3,589) (211,372) (12,577)
Total comprehensive
profit/( loss)
attributable to:
Owners of the parent (123,062) (4,465) (191,333) (8,518)
Non-controlling interest (6,253) 876 (20,039) (4,059)
(129,315) (3,589) (211,372) (12,577)
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 nine months ended September 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 241,260 - - -
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
Shares issued 89,784 - - -
Loss for the period - (4,235) - -
Stock-based compensation - - 1,925 -
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 - (30,490) - -
Stock-based compensation - - 14,423 -
Other comprehensive income:
Currency translation adjustment - - - -
Balance at September 30, 2011 891,434 (120,909) 56,651 846
Equity attributable to the shareholders
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 - 241,260 - 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
Shares issued - 89,784 - 89,784
Loss for the period - (4,235) (5,966) (10,201)
Stock-based compensation - 1,925 - 1,925
Other comprehensive income:
Currency translation
adjustment 41,040 41,040 - 41,040
Balance at December
31, 2010 155,278 864,512 (30,116) 834,396
Shares issued - 134,855 - 134,855
Loss for the period - (30,490) (20,039) (50,529)
Stock-based compensation - 14,423 - 14,423
Other comprehensive income:
Currency translation
adjustment (160,843) (160,843) - (160,843)
Balance at September
30, 2011 (5,565) 822,457 (50,155) 772,302
Note 10
The accompanying notes are an integral part of the condensed consolidated
interim financial statements.
Condensed consolidated interim statement of cashflows
for the three and nine months ended September 30, 2011
(Unaudited, expressed in U.S. dollars, unless otherwise stated)
For the three months For the nine months
ended ended
Sep 30, Sep 30, Sep 30, Sep 30,
2011 2010 2011 2010
Notes $000 $000 $000 $000
Cash flows from
operating activities
Cash receipts from customers 36,577 10,131 88,997 45,884
Cash paid to suppliers and
employees (51,436) (45,779) (144,677) (134,054)
Cash utilised in operations (14,859) (35,648) (55,680) (88,170)
Interest received 514 1,123 1,609 1,859
Interest paid 10 (225) (274) (906)
Net cash utilised in
operating activities (14,335) (34,750) (54,345) (87,217)
Cash flows from investing
activities
Purchase of property,
plant and equipment (3,796) (3,872) (8,063) (4,507)
Proceeds from fair
value adjustments (2,272) - 2,478 -
Purchase of Sedibelo West - - (79,666) -
Additions to intangible assets (6) 81 (12,505) (1,096)
Increase in rehabilitation
investment (438) - (6,334) -
Increase in cash investments - (48,538) - (65,497)
Increase in deferred
exploration expenses (2,820) (68) (3,629) (983)
Net cash utilised in
investing activities (9,332) (52,397) (107,719) (72,083)
Cash flows from financing
activities
Increase in loans payable - - - 25,708
Decrease in finance lease
liability (463) (460) (1,389) (1,371)
Increase/(Decrease) in
revolving commodity facility (3,032) 7,260 3,443 3,445
Realised foreign exchange
(losses) / gains (19) - (1,389) (2)
Repayment of promissory note - - (29,106) -
Proceeds from issue of shares - (265) 130,797 241,256
Net cash generated from
financing activities (3,514) 6,535 102,356 269,036
Net (decrease) / increase
in cash and cash equivalents (27,181) (80,612) (59,708) 109,736
Net foreign exchange
differences (981) (1,237) 3,010 (8,029)
Cash and cash equivalents
at the beginning of
the period 9 160,060 212,931 188,596 29,375
Cash and cash equivalents
at the end of the period 9 131,898 131,082 131,898 131,082
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, 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"). 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 realisation of assets and settlement of
liabilities in the normal course of business as they become due.
For the three and nine months ended September 30, 2011 the Group incurred a
profit/(loss) of US$7.488 million and (US$50.529) million. At September 30,
2011 had an accumulated deficit of US$120.909 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 by US$135.000 million by way of conversion of
the convertible debenture on March 31, 2011 and had US$131.898 million in cash
and cash equivalents at September 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 nine months ended September 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 2 November 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 amortisation 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
they are of a reportable segment. 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 nine-month periods ended is as follows:
Development and
Mining exploration
Sep 30, Sep 30, Sep 30, Sep 30,
Amounts in $ `000 2011 2010 2011 2010
Reportable items in the
Statement of Comprehensive
Income
External revenues 83,086 51,332 - -
Intersegment revenue - - - -
EBITDA (53,576) (72,400) - -
Reportable items in the
Statement of Financial
Position
Total assets 674,272 685,626 55,351 42,989
Additions to non-current
assets 24,927 95,552 21,197 139,261
Total liabilities (103,628) (155,409) (14,821) (4,440)
Administration Consolidated
Sep 30, Sep 30, Sep 30, Sep 30,
Amounts in $ `000 2011 2010 2011 2010
Reportable items in the
Statement of Comprehensive
Income
External revenues - - 83,086 51,332
Intersegment revenue - - - -
EBITDA (25,176) (33,038) (78,752) (105,438)
Reportable items in the
Statement of Financial
Position
Total assets 168,388 282,492 898,011 1,011,107
Additions to non-current
assets 76,635 917 122,759 235,730
Total liabilities (7,260) (139,410) (125,709) (299,259)
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 nine-month
period is provided as follows:
Consolidated
Sep 30, Sep 30,
2011 2010
$000 $000
Total EBITDA for reportable segments (78,752) (105,438)
Revenues offset against the cost of the plant
construction - (51,332)
Mining costs offset against the cost of the plant
construction - 117,004
Total EBITDA per consolidated statement of income and
comprehensive income (78,752) (39,766)
Foreign exchange gains 44,975 (9,795)
Depreciation (17,307) (426)
Finance costs (net) 555 (5,254)
Loss before taxation (50,529) (55,241)
Income tax expense - -
Exchange differences on translating from functional
currency to presentation currency (160,843) 42,664
Total comprehensive loss for the period (211,372) (12,577)
5. Intangible assets
As at Sep 30, As at Dec 31,
2011 2010
$000 $000
Water pipeline 11,105 13,070
ERP software 642 886
Computer software 37 63
SPV - Power and water rights 21,197 -
Balance at the end of the period 32,981 14,019
Reconciliation of intangible assets:
Water ERP Computer
pipeline Software software
$000 $000 $000
COST
Balance as at December 31, 2009 8,479 772 354
Additions during the period 1,228 169 43
Reclassified from receivables 2,064 - -
Foreign exchange variance 1,299 91 41
Balance as at December 31, 2010 13,070 1,032 438
Additions during the period 357 - 11
Foreign exchange variance (2,322) (180) (78)
Balance as at September 30, 2011 11,105 852 371
ACCUMULATED DEPRECIATION
Balance as at December 31, 2009 - - 257
Depreciation for the period - 132 79
Foreign exchange variance - 14 39
Balance as at December 31, 2010 - 146 375
Depreciation for the period - 103 28
Foreign exchange variance - (39) (69)
Balance as at September 30, 2011 - 210 334
CARRYING AMOUNTS
Balance as at December 31, 2010 13,070 886 63
Balance as at September 30, 2011 11,105 642 37
Power and
water rights TOTAL
$000 $000
COST
Balance as at December 31, 2009 - 9,605
Additions during the period - 1,440
Reclassified from receivables - 2,064
Foreign exchange variance - 1,431
Balance as at December 31, 2010 - 14,540
Additions during the period 24,566 24,934
Foreign exchange variance (3,369) (5,949)
Balance as at September 30, 2011 21,197 33,525
ACCUMULATED DEPRECIATION
Balance as at December 31, 2009 - 257
Depreciation for the period - 211
Foreign exchange variance - 53
Balance as at December 31, 2010 - 521
Depreciation for the period - 131
Foreign exchange variance - (108)
Balance as at September 30, 2011 - 544
CARRYING AMOUNTS
Balance as at December 31, 2010 - 14,019
Balance as at September 30, 2011 21,197 32,981
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 - (2,478) -
Additions - 6,073 -
Foreign exchange movement - (40,683) (45,045)
Balance as at September 30, 2011 - 198,413 213,705
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 - 8,782 6,765
Foreign exchange movement - (1,115) (858)
Balance as at September 30, 2011 - 7,667 5,907
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 15,132 - 275
Foreign exchange movement (11,947) (1,678) (207)
Balance as at September 30, 2011 71,815 7,961 1,268
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 490 252 7
Foreign exchange movement (61) (32) (1)
Balance as at September 30, 2011 429 220 6
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 - - (2,478)
Additions 790 - 22,270
Foreign exchange movement (470) (2,528) (102,558)
Balance as at September 30, 2011 3,027 11,994 508,183
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 360 642 17,298
Foreign exchange movement (276) (330) (2,673)
Balance as at September 30, 2011 1,407 1,749 17,385
Plant
construction Deferred
and mine Plant and stripping
development equipment cost
$000 $000 $000
CARRYING AMOUNTS
At December 31, 2010 562,881 - -
At September 30, 2011 - 190,746 207,798
Decom-
missioning Producing Land and
asset mines buildings
$000 $000 $000
CARRYING AMOUNTS
At December 31, 2010 - - 1,200
At September 30, 2011 71,386 7,741 1,262
Leased
Other assets TOTAL
$000 $000 $000
CARRYING AMOUNTS
At December 31, 2010 1,384 13,085 578,550
At September 30, 2011 1,620 10,245 490,798
7. Inventories
As at Sep 30, As at Dec 31,
2011 2010
$000 $000
At cost
Ore stockpiled 4,039 4,424
Work in progress 761 2,258
Consumables 3,976 4,603
Balance at the end of the period 8,776 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 five years and re-assessed on an annual
basis.
Escrow
On March 23, 2011, the Company entered into a transaction to acquire 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 Sep 30, As at Dec 31,
2011 2010
$000 $000
Pilanesberg rehabilitation guarantee 70,273 76,430
ESKOM capital and supply guarantees 6,708 6,856
Mphahlele rehabilitation guarantee 1,054 1,077
Other guarantees 89 108
Escrow account for Sedibelo transaction 81,923 -
Balance at the end of the period 160,047 84,471
8.2 Restricted cash - current asset
As at Sep 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 Sep 30, As at Dec 31,
2011 2010
$000 $000
Cash at bank and on hand 131,898
Total cash and cash equivalents 131,898 1
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 authorised
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 September 30, 2011
Balance, January 1, 2011 749,680,767 756,579
Common shares issued 160,714,286 134,855
Balance, September 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 Sep 30, As at Dec 31,
2011 2010
$000 $000
Corridor Mining Resources (Pty) Ltd 4,134 4,681
Perilya Exploration (Pty) Ltd 26 29
SPV - Power and water rights 10,598 -
14,758 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$10,598 million at the
closing rate of ZAR7.9806 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 303 6,062 9,984 16,349
Finance cost (246) (4,430) (4,124) (8,800)
Present value 57 1,632 5,860 7,549
13. Decommissioning and rehabilitation provision
As at As at
Sep 30, Dec 31,
2011 2010
$000 $000
Balance at the beginning of the period 70,705 52,744
Increase in liability for the period 15,001 10,435
Unwinding of interest (accretion) 1,033 1,307
86,739 64,486
Effect of exchange rate changes (12,308) 6,219
Balance at the end of the period 74,431 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 September 30, 2011 is US$89.995 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 12 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 two to three months upon which the
funds are again available for draw-down.
As at Sep 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 39,940 -
Repayment of amounts owing (32,899) (2,684)
Interest accrued (85) (48)
10,424 3,122
Effect of exchange rate changes (2,683) 346
Balance at the end of the period 7,741 3,468
15. Current portion of long-term borrowings
As at Sep 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
three 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 December 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 September 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 For the nine months
ended ended
Sep 30, Sep 30, Sep 30, Sep 30,
2011 2010 2011 2010
$000 $000 $000 $000
On mine operations
Materials and mining costs 25,108 - 83,382 -
Concentrator plant operations
Materials and other costs 13,124 - 31,060 -
Utilities 3,409 - 9,273 -
Beneficiation
Smelting and refining costs 1,941 - 6,404 -
Transport 58 - 235 -
Salaries 928 - 2,854 -
Sub-total 44,568 - 133,208 -
Depreciation of operating assets
(note 6) 4,480 - 16,791 -
Change in inventories (4,024) - (918) -
45,024 - 149,081 -
18. Administrative and general expenses
For the three months For the nine months
ended ended
Sep 30, Sep 30, Sep 30, Sep 30,
2011 2010 2011 2010
$000 $000 $000 $000
Included in the administrative
and general expenses are the
following:
Audit fees (197) 21 (398) (401)
Consulting and professional fees(3,229) (252) (4,753) (447)
Employee expenses (1,331) (2,134) (4,587) (6,497)
General and administration
expenses (592) (1,986) (1,645) (4,910)
Royalty taxes (162) (73) (463) (195)
Mining operations (1,258) - (3,176) -
Sub-total (6,769) (4,424) (15,022) (12,450)
Share-based payment expense (213) (2,346) (104) (3,357)
Amortisation and depreciation (154) (148) (516) (426)
(7,136) (6,918) (15,642) (16,233)
Included in other income/
(expenses) are the following:
Foreign exchange gain / (loss) 36,539 (17,090) 44,975 (9,795)
Loss on impairment of
exploration project - (37) - (292)
Other income 23 2 200 1
Share-based payment expense
(fair value adjustment) 187 (213) (14,622) (23,668)
36,749 (17,338) 30,553 (33,754)
19. Earnings/(Loss) per share attributable to owners of the parent
For the three months For the nine months
ended ended
Sep 30, Sep 30, Sep 30, Sep 30,
2011 2010 2011 2010
Basic earnings/(loss) per
share (USD) 0.02 (0.05) (0.03) (0.09)
Basic earnings/(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 profit/(loss) used in
calculating basic earnings per share
attributable to owners of the
parent (USD`000) 13,741 (26,910) (30,490) (51,182)
Weighted average number of
shares used in the calculation
of basic earnings/(loss) per
share (`000) 910,395 513,605 874,681 559,330
The potential ordinary shares had no effect on the basic earning per share for
the three-month period ended September 30, 2011 and the diluted earnings per
share is equal to the basic earnings per share.
Due to the Group reporting a loss for the nine-month period ending September
30, 2011 the diluted loss per share is equal to the basic loss per share.
Date: 07/11/2011 15:00:02 Produced by the JSE SENS Department.
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