| Mon 14 May 2012, 15:31 | | ATL - Atlatsa - Atlatsa announces Operational and Financial Results for the |
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ATL
ATL - Atlatsa - Atlatsa announces Operational and Financial Results for the
Quarter Ended March 31, 2012
Atlatsa Resources Corporation
(previously Anooraq Resources Corporation)
(Incorporated in British Columbia, Canada)
(Registration number 10022-2033)
TSXV/JSE share code: ATL
NYSE AMEX share code: ATL
ISIN: CA0494771029
("Atlatsa" or the "Company")
ATLATSA ANNOUNCES OPERATIONAL AND FINANCIAL RESULTS FOR THE QUARTER ENDED MARCH
31, 2012
Atlatsa announces its operating and financial results for the three months ended
March 31, 2012. This release should be read together with the Company`s
Financial Statements and Management Discussion & Analysis available at
www.atlatsaresources.com and filed on www.sedar.com. Currency values are
presented in South African Rand (ZAR), Canadian Dollars ($) and United States
Dollars (US$).
Despite the anticipated first quarter challenges associated with a slow start-up
after the year-end break, the quarter`s operating and financial performance was
further affected by a regrettable mine fatality and a number of Section 54
safety stoppages, resulting in six operating shifts lost during the period.
Notwithstanding the abovementioned challenges the first quarter`s operating
performance at Bokoni was better than the first quarter of 2011, with tonnes
milled improving by 10%, whilst platinum group metal (PGM*) ounces produced
improved by 24% year-on-year. Development at the operations continues to
improve, in an effort to sustain much-needed mining flexibility at Bokoni.
On an encouraging note, the new mine management team - appointed in February
2012 - has begun to introduce a number of on-mine initiatives to improve quality
mining practices and this has translated into an improved recovered grade (PGM)
at the operations. Historical challenges at the Bokoni concentrator plant have
also been mitigated, with the number of mill stoppages now having reduced
significantly, whilst plant recoveries are trending back towards normalised
levels expected at the Bokoni concentrator.
Bokoni remains a mine in development, with its primary focus on its two key ramp
up projects at its Brakfontein (Merensky) and Middelpunt Hill (UG2) expansions.
These new generation shaft complexes at Bokoni will continue to ramp up over the
next five years.
Notwithstanding the development focus at Bokoni, operating costs and
efficiencies remain the key short- to medium-term challenges which, against a
backdrop of a depressed ZAR PGM basket price, continue to result in earnings and
cash flow margin pressure.
The implementation of a new series of initiatives to improve operating
efficiencies and reduce unit costs has begun, and it is anticipated that these
will begin to bear fruit in the second quarter of 2012.
*PGM means platinum group metals (4E), comprising platinum, palladium, rhodium
and gold.
Operating and financial performance
Set out below are summaries of the key operating and financial results for
Bokoni and the Company for the period under review.
Operating results - Bokoni Mines Q1 Q1 %
2012 2011 Change
T 243,054 219,991 10
Tonnes milled
g/t milled,PGM 4.05 3.84 5
Recovered grade
oz 27,799 22,500 24
PGM oz produced
UG2 mined to total output % 33.8 30.0 13
Primary development m 2,547 2,302 11
Capital expenditure $m 6.9 6.5 6
Operating cost/tonne milled ZAR/t 1,423 1,199 (19)
Operating cost/PGM oz ZAR/PGM oz 12,442 11,772 (6)
Lost-time injury frequency Per 200,000 2.17 1.91 (14)
rate ("LTIFR") hours worked
Total permanent labor Number 3,503 3,434 2
(mine operations)
Total contractors Number 1,611 1,922 (16)
(mine operations)
Consolidated statement of comprehensive income summary
Expressed in Canadian Dollars (000`s) Q1 2012 Q1 2011 Variance
%
Revenue 34,079 30,698 11%
Cash operating costs 43,949 36,333 (21%)
Cash operating (loss)/profit* (9,870) (5,635) (75%)
Operating margin (29%) (18%) (61%)
EBITDA (13,600) (9,589) (42%)
Loss after tax (41,267) (36,076) (14%)
Non-controlling interest (19,729) (17,432) (13%)
Loss attributable to Atlatsa shareholders (21,538) (18,644) (16%)
Basic and diluted loss per share - cents 5 4 (25%)
Safety
It is with deep regret that the Company reported a fatal accident which occurred
at Bokoni during Q1 2012, in which Mr Zimele Gwantshu, who was employed as a
light-weight machine operator, was fatally injured in a fall of ground incident.
As a result of this fatality and other Section 54 safety stoppages imposed by
the Department of Mineral Resources, a total of six operating shifts were lost
during Q1 2012. The lost time injury frequency rate (LTIFR) for Q1 2012
regressed to 2.17 per 200,000 hours worked, from 1.91 in Q1 2011.
Production and development
Production at the operations was negatively affected by the slow start-up after
the year-end break, safety related stoppages and the national COSATU stay-away
at the end of February.
Notwithstanding these challenges, the 243,053 tonnes milled in Q1 2012
represents a 10% improvement on tonnes milled in Q1 2011, whilst the 27,799 PGM
ounces produced during the quarter represents a 24% improvement on Q1 2011
results.
Improved mining discipline and initiatives at the Bokoni concentrator resulted
in the recovered grade increasing by 5% when compared to Q1 2011, whilst
concentrator recoveries for Merensky and UG2 ore improved to 88.5% and 83.7%
respectively, indicating a positive trend towards returning to expected plant
recovery levels.
Total primary development increased by 11% in Q1 2012 when compared to Q1 2011,
as Bokoni continues to focus on creating much-needed mining flexibility in an
effort to support improved operating efficiencies.
Revenue
Revenue from the sale of concentrate for Q1 2012 was $34.1 million compared to
revenue of $30.7 million for Q1 2011. This increase in revenue was primarily
attributable to increased production volumes, but negatively affected by a
weakening of the average US$ basket price by 13% to US$1,273/oz when compared
to a basket price of US$1,457/oz achieved in Q1 2011.
Cash operating costs
Cash operating costs for Q1 2012 were $43.9 million compared to $36.3 million
for Q1 2011, representing a 21% year-on-year increase. These higher costs were
primarily attributable to above-inflation increases in labour costs, increased
stores charges and annual increases in utility charges, including a 25.8% annual
increase in ESKOM power charges.
Unit costs, measured by ZAR/PGM oz, increased by 6% year-on-year to ZAR12,442/
PGM oz, highlighting the need to improve operating efficiencies and production
volumes at Bokoni, which is scaled to produce at operating levels higher than
those currently being achieved.
In an effort to reduce unit costs mine management is introducing a number of on-
mine initiatives aimed at improving operating efficiencies, including the
introduction of a new bonus system, as well as new payment and leave cycles.
Furthermore, the high cost Merensky shaft operations at Bokoni are currently
under review as part of a broader asset review and optimization strategy.
Capital expenditure
Capital expenditure incurred for the quarter amounted to $6.9 million,
comprising 23% sustaining capital and 77% project expansion capital, as Bokoni
continues to focus on its two key ramp-up projects at Brakfontein (Merensky) and
Middelpunt Hill (UG2).
Finance charges
Total finance charges of $22.8 million were incurred in Q1 2012, of which $11.5
million was attributable to Atlatsa, contributing significantly to the Company`s
net loss for the period. Finance charges will be reduced substantially on
implementation of the restructure plan announced by the Company and Anglo
American Platinum on 2 February, 2012 ("the restructure plan").
Earnings
The basic and diluted loss per share for Q1 2012 was 5 cents per share ("cps")
when compared to 4 cps for Q1 2011.
Johannesburg
14 May 2012
JSE Sponsor
Macquarie First South Capital (Pty) Limited
Issued on behalf of Atlatsa Resources Corporation
On behalf of Atlatsa
Joel Kesler
Executive: Corporate Development
Office: +27 11 779 6800
Mobile: +27 82 454 5556
Russell and Associates
Nicola Taylor
Office: +27 11 880 3924
Mobile: +27 82 927 8957
Macquarie First South Capital
Annerie Britz/ Yvette Labuschagne/ Melanie de
Nysschen
Office: +27 11 583 2000
Note on cautionary and no conference call
Atlatsa is currently trading under cautionary and will not be holding a
conference call or presentation to accompany these results. Further to
finalization and publication of the financial effects of the restructure plan,
the Company will resume detailed shareholder communications.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in policies of the TSX Venture Exchange) accepts responsibility
for the adequacy or accuracy of this release. The NYSE Amex has neither approved
nor disapproved the contents of this press release.
Cautionary and forward-looking information
This document contains "forward-looking statements" that were based on Atlatsa`s
expectations, estimates and projections as of the dates as of which those
statements were made, including statements relating to the Bokoni Group
restructure and refinancing and anticipated financial or operational
performance. Generally, these forward-looking statements can be identified by
the use of forward-looking terminology such as "may", "will", "outlook",
"anticipate", "project", "target", "believe", "estimate", "expect", "intend",
"should" and similar expressions.
Atlatsa believes that such forward-looking statements are based on material
factors and reasonable assumptions, including the following assumptions: the
Bokoni Mine will increase or continue to achieve production levels similar to
previous years; the Ga-Phasha, Boikgantsho, Kwanda and Platreef Projects
exploration results will continue to be positive; contracted parties provide
goods and/or services on the agreed timeframes; equipment necessary for
construction and development is available as scheduled and does not incur
unforeseen breakdowns; no material labour slowdowns or strikes are incurred;
plant and equipment functions as specified; geological or financial parameters
do not necessitate future mine plan changes; and no geological or technical
problems occur.
Forward-looking statements are subject to known and unknown risks, uncertainties
and other factors that may cause the Company`s actual results, level of
activity, performance or achievements to be materially different from those
expressed or implied by such forward-looking statements. These include but are
not limited to:
- uncertainties related to the completion of the Bokoni Group restructure and
refinancing;
- uncertainties and costs related to the Company`s exploration and
development activities, such as those associated with determining whether
mineral resources or reserves exist on a property;
- uncertainties related to feasibility studies that provide estimates of
expected or anticipated costs, expenditures and economic returns from a
mining project;
- uncertainties related to expected production rates, timing of production
and the cash and total costs of production and milling;
- uncertainties related to the ability to obtain necessary licenses, permits,
electricity, surface rights and title for development projects;
- operating and technical difficulties in connection with mining development
activities;
- uncertainties related to the accuracy of our mineral reserve and mineral
resource estimates and our estimates of future production and future cash
and total costs of production, and the geotechnical or hydrogeological
nature of ore deposits, and diminishing quantities or grades of mineral
reserves;
- uncertainties related to unexpected judicial or regulatory proceedings;
- changes in, and the effects of, the laws, regulations and government
policies affecting our mining operations, particularly laws, regulations
and policies relating to:
- mine expansions, environmental protection and associated compliance
costs arising from exploration, mine development, mine operations and
mine closures;
- expected effective future tax rates in jurisdictions in which our
operations are located;
- the protection of the health and safety of mine workers; and
- mineral rights ownership in countries where our mineral deposits are
located, including the effect of the Mineral and Petroleum Resources
Development Act (South Africa);
- changes in general economic conditions, the financial markets and in the
demand and market price for gold, copper and other minerals and
commodities, such as diesel fuel, coal, petroleum coke, steel, concrete,
electricity and other forms of energy, mining equipment, and fluctuations
in exchange rates, particularly with respect to the value of the U.S.
dollar, Canadian dollar and South African rand;
- unusual or unexpected formation, cave-ins, flooding, pressures, and
precious metals losses (and the risk of inadequate insurance or inability
to obtain insurance to cover these risks);
- changes in accounting policies and methods we use to report our financial
condition, including uncertainties associated with critical accounting
assumptions and estimates; environmental issues and liabilities associated
with mining including processing and stock piling ore;
- geopolitical uncertainty and political and economic instability in
countries which we operate; and
- labour strikes, work stoppages, or other interruptions to, or difficulties
in, the employment of labour in markets in which we operate mines, or
environmental hazards, industrial accidents or other events or occurrences,
including third party interference that interrupt the production of
minerals in our mines.
For further information on Atlatsa, investors should review the Company`s Annual
Report disclosed in the Form 20-F for the year ended December 31, 2011 filed on
SEDAR at www.sedar.com and with the United States Securities and Exchange
Commission www.sec.gov and other disclosure documents that are available on
SEDAR at www.sedar.com.
Date: 14/05/2012 15:31:05 Produced by the JSE SENS Department.
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