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NORTHAM PLATINUM LIMITED - NORTHAM PLATINUM LIMITED
NORTHAM PLATINUM LIMITED
(Registration number 1977/003282/06)
(Incorporated in the Republic of South Africa)
Share Code: NHM ISIN Code: ZAE000030912
(`the company`)
UNAUDITED INTERIM REPORT AND DIVIDEND DECLARATION FOR THE SIX MONTHS ENDED
31 DECEMBER 2004
KEY FEATURES
* Mining operations interrupted for six weeks owing to fire
* 23% of available shifts lost
* Production lower by 18.4%
* Net income down 39.7%
Income statement
Six months Six months Year
ended ended ended
31 December 31 December 30 June
Change 2004 2003 2004
% R000 R000 R000
Sales revenue (18.3) 720 283 882 077 1 720 399
Cost of sales (10.7) 638 250 714 862 1 331 614
Operating costs 0.8 557 766 553 463 1 057 568
Concentrates
purchased 21 552 - 14 632
Refining and other
costs 28 393 32 741 60 569
Metal leasing costs - (14 149) (14 149)
Depreciation 58 500 50 676 97 527
Change in metal
stocks (27 961) 92 131 115 467
Operating profit (50.9) 82 033 167 215 388 785
Investment income 16 126 18 998 38 174
Net sundry
revenue/(expenditure)
15 982 (37 753) (36 392)
Profit before tax (23.1) 114 141 148 460 390 567
Tax 51 433 44 385 136 869
Net income (39.7) 62 708 104 075 253 698
Reconciliation of
headline earnings
Net income 62 708 104 075 253 698
Profit on sale of
fixed assets (191) (198) (193)
Tax effect 57 59 58
62 574 103 936 253 563
Earnings per share -
cents (39.6) 27.1 44.9 109.6
Fully diluted
earnings per share -
cents (39.6) 27.1 44.9 109.6
Headline earnings
per share - cents (39.9) 27.0 44.9 109.5
Dividends per share
- cents 25.0 45.0 105.0
Capital repayments
per share - cents - - 20.0
Weighted average
number of shares in
issue 231 558 337 231 538 500 231 540 413
Fully diluted number
of shares in issue 231 615 661 231 556 884 231 556 027
Number of shares in
issue 231 573 500 231 538 500 231 543 500
Cash flow statement
Cash flow from
operations 122 196 262 357 512 808
Profit before tax 114 141 148 460 390 567
Depreciation 58 500 50 676 97 527
Change in working
capital (31 327) 125 071 139 362
Tax paid (19 965) (62 450) (117 766)
Other 847 600 3 118
Cash utilised in
investing activities (46 282) (57 964) (118 496)
Property plant and
equipment
Additions to
maintain operations (49 484) (60 362) (122 925)
Disposals 3 202 2 398 4 427
Investments - net - - 2
Cash utilised in
financing activities (185 685) (81 549) (187 665)
Proceeds from issue
of shares 137 - 24
Reduction of share
premium (46 310) (81 038) (81 394)
Dividends paid (138 929) - (104 194)
Increase in
Restoration Trust
Fund (583) (511) (2 101)
Net cash flow (109 771) 122 844 206 647
Cash at beginning of
period 501 622 294 975 294 975
Cash at end of period 391 851 417 819 501 622
Statement of changes
in equity
Equity at beginning
of period 1 583 642 1 515 508 1 515 508
Net income for the
period 62 708 104 075 253 698
Issue of new shares 137 - 24
Reduction of share
premium (46 310) (81 038) (81 394)
Dividends distributed (138 929) - (104 194)
Equity at end of
period 1 461 248 1 538 545 1 583 642
Balance sheet
Property, plant and
equipment 1 343 738 1 341 689 1 355 765
Unlisted investments 181 183 181
Northam Platinum
Restoration Trust
Fund 13 146 10 973 12 563
Current assets 752 908 781 563 804 015
Inventories 261 778 250 564 223 187
Accounts receivable 99 279 113 180 79 206
Cash and cash
equivalents 391 851 417 819 501 622
2 109 973 2 134 408 2 172 524
Share capital 1 950 586 1 997 091 1 996 759
Accumulated loss (489 338) (458 546) (413 117)
Shareholders` equity 1 461 248 1 538 545 1 583 642
Deferred tax 328 000 329 207 332 395
Long-term provisions 16 189 12 240 15 151
Current liabilities 304 536 254 416 241 336
Accounts payable 189 192 208 915 161 855
Tax 115 344 45 501 79 481
2 109 973 2 134 408 2 172 524
Operating statistics
Six months
ended
31 December
Change 2004
% R000
Merensky:
Development metres (44.9) 3 564
Square metres mined (25.5) 138 393
Tons milled (19.5) 687 194
Head grade (g/ton - 3 PGEs + Au) 6.1
Available ore reserves - months 20
UG2:
Development metres 33.1 1 312
Square metres mined (24.3) 45 173
Tons milled (15.5) 302 689
Head grade (g/ton - 3 PGEs + Au) 4.4
Available ore reserves - months 16
Combined:
Development metres (34.6) 4 876
Square metres mined (25.2) 183 566
Tons milled (18.4) 989 883
Head grade (g/ton - 3 PGEs + Au) 5.6
Financial stastistics
Precious metals in concentrates
produced
- 3 PGEs + Au kg 4 649
Precious metals sold - 3 PGEs + Au kg 4 723
Average price realised - 3 PGEs + Au R/kg 132 645
Average exchange rate realised US$1.00 = R 6.20
Operating costs - 3 PGEs + Au R/kg 132 547
Cash costs - 3 PGEs + Au R/kg 119 742
Precious metals in concentrates
produced
- 3 PGEs + Au oz 149 481
Precious metals sold - 3 PGEs + Au oz 151 835
Average price realised - 3 PGEs + Au $/oz 665
Operating costs - 3 PGEs + Au $/oz 665
Cash costs - 3 PGEs + Au $/oz 600
Operating costs per tonne milled R/tonne 623
Cash costs per tonne milled R/tonne 562
Outstanding hedging instruments at
period end
Platinum
Period covered by outstanding
instruments n/a January 2004
-
Average quantity hedged per month - oz -
Average contract price - US$/oz -
Fair value price at period end - US$/oz -
Unrealised gain/(loss) recognised - US$000 -
- R000 -
Palladium
Period covered by outstanding
instruments January 2005
to February 2005
Average quantity hedged per month - oz 1 000
Average contract price - US$/oz 215.00
Fair value price at period end - US$/oz 183.00
Unrealised gain/(loss) recognised - US$000 55
- R000 307
Currency
Period covered by outstanding
instruments January 2005
to February 2005
Average volumes hedged per month - US$000 1 000
Average contract rate - US$1.00 = R 6.35
Fair value rate at period end - US$1.00 = R 5.60
Unrealised gain (loss) recognised - R000 1 463
Capital commitments
Authorised but not contracted 88 727
Contracted 6 732
95 459
Other commitments
Information Technology Outsource
Service Provider
Due in one year 9 051
Due in two to five years 30 250
Operating lease rentals - office
equipment
Due in one year 171
Due in two to five years 215
Operating lease rentals - premises
Due in one year 136
Due in two to five years 309
These commitments will be
financed out
of operating cash flows
Six months Year
ended ended
31 December 30 June
2003 2004
R000 R000
Merensky:
Development metres 6 464 10 713
Square metres mined 185 672 322 451
Tons milled 854 089 1 541 234
Head grade (g/ton - 3 PGEs + Au) 6.1 6.0
Available ore reserves - months 18 15
UG2:
Development metres 986 1 690
Square metres mined 59 688 113 754
Tons milled 358 417 691 353
Head grade (g/ton - 3 PGEs + Au) 4.3 4.3
Available ore reserves - months 31 24
Combined:
Development metres 7 450 12 403
Square metres mined 245 360 436 205
Tons milled 1 212 506 2 232 587
Head grade (g/ton - 3 PGEs + Au) 5.5 5.5
Financial stastistics
Precious metals in concentrates
produced
- 3 PGEs + Au 5 694 10 592
Precious metals sold - 3 PGEs + Au 6 486 11 733
Average price realised - 3 PGEs + Au 123 121 130 874
Average exchange rate realised 6.97 6.81
Operating costs - 3 PGEs + Au 106 091 109 052
Cash costs - 3 PGEs + Au 97 051 99 532
Precious metals in concentrates
produced
- 3 PGEs + Au 183 063 340 547
Precious metals sold - 3 PGEs + Au 208 523 377 239
Average price realised - 3 PGEs + Au 549 597
Operating costs - 3 PGEs + Au 465 491
Cash costs - 3 PGEs + Au 425 449
Operating costs per tonne milled 498 517
Cash costs per tonne milled 456 472
Outstanding hedging instruments at
period end
Platinum
Period covered by outstanding
instruments n/a
to May 2004 -
Average quantity hedged per month 5 500 -
Average contract price 682.31 -
Fair value price at period end 811.00 -
Unrealised gain/(loss) recognised (3 412) -
(22 813) -
Palladium
Period covered by outstanding
instruments January 2004 n/a
to March 2004 -
Average quantity hedged per month 3 500 -
Average contract price 246.04 -
Fair value price at period end 191.00 -
Unrealised gain/(loss) recognised 692 -
3 628 -
Currency
Period covered by outstanding
instruments January 2004 July 2004
to June 2004 to Sept 2004
Average volumes hedged per month 6 000 2 000
Average contract rate 6.56 7.05
Fair value rate at period end 6.68 6.20
Unrealised gain (loss) recognised (6 777) 4 078
Capital commitments
Authorised but not contracted 54 734 127 737
Contracted 17 008 8 399
71 742 136 136
Other commitments
Information Technology Outsource
Service Provider
Due in one year 7 054 8 346
Due in two to five years 25 478 29 607
Operating lease rentals - office
equipment
Due in one year 164 167
Due in two to five years 354 332
Operating lease rentals - premises
Due in one year 408 204
Due in two to five years - -
These commitments will be
financed out
of operating cash flows
Basis of preparation
The financial statements have been prepared in accordance with the historical
cost convention except for certain financial instruments that are stated at
fair value. The company`s accounting policies used in the preparation of
these financial statements are consistent with those used in the annual
financial statements for the year ended 30 June 2004.
The interim financial statements of the company have been prepared in
accordance with International Financial Reporting Standards (IAS 34), South
African Statements of Generally Accepted Accounting Practice (AC 127), in
compliance with the listings requirements of the JSE Securities Exchange South
Africa and in the manner required by the Companies Act, 1973 for the
preparation of financial information of the company for the six months ended 31
December 2004.
Comment on results
Safety
It is with deep regret that the Board reports that eleven employees tragically
lost their lives in mining related accidents during the period under review.
Three mine employees and six contractors` employees lost their lives as a
result of the fire that occurred on 20 September 2004 in the conveyor decline
between 13 and 14 levels. Two separate incidents resulted in the deaths of the
other two employees.
All underground operations were suspended for the duration of the investigation
into the conveyor belt incident. A formal enquiry into the cause of this
incident will be held in due course.
Lost time and reportable injury safely statistics have continued to show a
downward trend.
Management remains firmly committed to eradicating unsafe practices in order to
provide a safe working environment for all the company`s employees and
continually conducts risk assessments, reviews operating procedures and
promotes safety initiatives in order to achieve this objective.
Operating performance
Following the suspension of production, mining operations were only resumed
towards the end of October 2004, with the resultant loss of approximately six
weeks of production. This had a significant negative effect on the company`s
performance during the period under review.
Compared with the six months ended December 2003, production of metal in
concentrates (3PGE + Au) was 18.4% lower at 4 649kg (149 481oz). Merensky
tonnage milled was some 19.5% lower whilst UG2 tonnage milled was 15.5% lower.
The development programme also suffered as a result of the suspension in
production. However, some progress was made, resulting in the immediately
available Merensky ore reserve increasing to 20 months whilst UG2 ore reserve
availability dropped to 16 months.
Financial results
The US Dollar basket price (3PGE + Au) increased by 21.1% to US$ 665 per ounce.
However, the sustained strength of the Rand resulted in the average price
received increasing by only 7.7% to R132 645 per kg. Unit sales decreased by
27.2% to 4 723kg (151 835 oz) largely as a result of production losses as well
as a reduction in the refining pipeline in December 2003, resulting in sales
revenue declining by 18.3% to R720 million.
Although total operating costs remained constant, the high fixed cost component
combined with the lower production resulted in the unit cash operating costs
increasing by 23.4% to R119 742 per kg. Cost of sales includes R21.6 million
relating to concentrates purchased in order to optimise smelter efficiencies.
The lower sales volumes resulted in the cost of sales for the period decreasing
by 10.7%.
An interim recovery from the company`s insurers is largely responsible for the
increase in net sundry revenue.
The profit attributable to shareholders decreased by 39.7% to R63 million
compared with that for the six months ended 31 December 2003.
Hedging
During the period US$6.0 million was hedged at an average rate of US$1.00 =
R6.30, whilst minor volumes of palladium were hedged at an average of US$215
per ounce. Details of the aggregate outstanding contracts are set out in the
accompanying financial report.
In terms of AC 133 - Financial Instruments: Recognition and Measurement, the
hedging instruments have been recognised at fair value at the end of the
period, with a gain of R1.7 million being included in net income.
Capital expenditure
Development expenditure (R13 million), access infrastructure to 1 level and 14
level (R3 million), additional pumping capacity (R4 million) and extensions to
the backfill infrastructure (R8 million) were the major contributors to the
capital expenditure of R50 million, with routine capital expenditure comprising
the balance.
Expansion
Booysendal Project (`Booysendal`)
The participants in the Booysendal Project are working towards finalising
outstanding conditions precedent which include the granting of a prospecting
licence by the Department of Minerals and Energy in respect of two state-owned
mineral properties that are included in the project.
Further growth opportunities
Northam is actively pursuing other growth opportunities in conjunction with
Mvelaphanda Resources which has a 22.3% equity interest in the company.
Prospects
Production of metals in concentrate for the next six months is expected to be
in line with that of the previous comparable reporting period. Consequently,
should the Rand basket price received remain at current levels, a commensurate
increase in earnings may be expected in the second half of the financial year.
Directorate
Mr. Robin Mills was appointed a non-executive director on 1 September 2004 in
place of Mr Dorian Emmett who resigned on 30 August 2004.
Dr Judy Dlamini and Ms Emily Kgosi were appointed independent non-executive
directors on 1 November 2004 On 1 February 2005 Mr P C (Pine) Pienaar was
appointed as an alternate director to Mr Bernard van Rooyen.
Dividend
Dividend number 12 of 25 cents per share has been declared in South African
currency, in respect of the six months ended 31 December 2004.
The dividend will be paid on Monday, 28 February 2005 to shareholders recorded
in the books of the company at the close of business on Friday, 25 February
2005 (the record date). The last day to trade cum dividend is Friday, 18
February 2005. The shares will commence trading ex dividend on Monday, 21
February 2005.
No share certificates may be dematerialised or rematerialised between Monday,
21 February 2005 and Friday, 25 February 2005, both days inclusive.
On behalf of the Board
T M G Sexwale B R van Rooyen
Chairman Director
Johannesburg
2 February 2005
Registered Office
1st Floor, Block 1A PO Box 412694
Albury Park Craighall
Magalieszicht Avenue 2024
Dunkeld West Republic of South Africa
Johannesburg
Share code: NHM ISIN: ZAE000030912
Directors: T M G Sexwale (Chairman), M E Beckett (British), Ms N J Dlamini (Dr),
R Havenstein, Ms E T Kgosi, R G Mills, E Molobi, R H H van Kerckhoven (Belgian),
B R van Rooyen (alternate: P C Pienaar), M J Willcox
Company Secretary: S J van der Spuy
These results are available on our website at www.northam.co.za
Date: 03/02/2005 07:30:36 AM
Produced by the JSE SENS Department
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