| Thu 21 Jun 2012, 15:30 | | RBP - Royal Bafokeng Platinum Limited - Review of operating activities and |
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RBP
RBP
RBP - Royal Bafokeng Platinum Limited - Review of operating activities and
capital expenditure in response to prevailing market conditions
ROYAL BAFOKENG PLATINUM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2008/015696/06)
JSE share code: RBP ISIN: ZAE000149936
("RBPlat" or the "Company")
REVIEW OF OPERATING ACTIVITIES AND CAPITAL EXPENDITURE IN RESPONSE TO
PREVAILING MARKET CONDITIONS
Shareholders are advised that due to prevailing difficult market
conditions, characterized by the softening of platinum group metal (PGMs)
prices as a result of weaker demand for PGMs particularly from Europe, as
well as local cost pressures, RBPlat, to preserve cash flows, has undertaken
a strategic review of operating activities and capital expenditure
commitments to identify opportunities of deferring expenditure in the short-
to medium term on certain non-critical items without any material negative
impact on the business ("Review").
The Company is of the view that current market conditions are likely to
prevail for the remainder of the year and going into 2013, and has therefore
decided in this first phase of the Review to introduce the following cash
preservation measures:
1. Deferment of exploration drilling at BRPM and Styldrift II
This includes drilling at Bafokeng Rasimone Platinum Mine`s ("BRPM")
North shaft as part of the Phase III replacement project, which is
scheduled to be completed by August 2017, and drilling at the Styldrift
II project. This deferment will not impact on the completion of studies
for Styldrift II, with the pre-feasibility still scheduled for
completion by the end of 2014. A total amount of R71.7 million planned
for the 2012 and 2013 financial years will be deferred.
2. Deferment of construction of a chairlift at BRPM`s South shaft
An amount of R20.5 million has been spent on this project to date.
Construction of the chairlift at North shaft will proceed as planned.
An amount of R90.7 million planned for the remainder of the 2012
financial year and the whole of 2013 is estimated to be deferred.
3. Deferment of BRPM concentrator upgrade
Plans to upgrade the existing BRPM concentrator have been deferred. The
upgraded BRPM concentrator facility with a capacity increase from
200,000tpm to 230,000tpm was scheduled to come on-stream by the end of
2013. The additional capacity would have enabled the treatment of ore
comprising up to 30% UG2, from the current limit of 8% UG2. The
existing arrangement to treat ore comprising in excess of 8% UG2 at
Anglo Platinum`s Waterval concentrator remains in place. Approximately
R300 million of the amount planned to be spent during the 2012 and 2013
financial years will be deferred.
RBPlat will continue to review capital and other expenditure and to optimise
operations while at the same time avoiding any material impact on production
and the long-term sustainability of operations. The Company remains
confident that long-term fundamental demand for PGMs remains in place,
supporting its long-term growth objectives.
Fourways, Johannesburg
21 June 2012
JSE Sponsor
Macquarie First South Capital (Pty) Limited
For further enquiries, please contact:
Lindiwe Montshiwagae
Investor Relations Manager
Tel: +27 (0)10 590 4517
Email: lindiwe@bafokengplatinum.co.za
Date: 21/06/2012 15:30:02 Produced by the JSE SENS Department.
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