Atlatsa achieves best operating quarter and half year
performance in past five years at Bokoni Mine with significant
improvements in year-on-year Q2 and H1 operating and financial
results:
- H1 PGM production increases by 28%
- H1 unit costs decrease by 10%
- Q2 cash operating profit improves by 185% to $4 million
- Restructure Plan remains on track
- Conditional approval obtained to migrate to the
TSX
JOHANNESBURG,
Aug. 14, 2013 /CNW/ - Atlatsa
Resources Corporation ("Atlatsa" or the "Company") (TSXV: ATL; NYSE
MKT: ATL; JSE: ATL) announces its operating and financial results
for the three and six months ended June 30,
2013. This release should be read together with the
Company's financial statements and Management Discussion &
Analysis filed on www.atlatsaresources.co.za and www.sedar.com.
Currency values are presented in South African Rand (ZAR), Canadian
Dollars ($) and United States Dollars (US$).
In commenting on the results Atlatsa's Chief
Commercial Officer, Joel Kesler,
said, "The upward quarterly trend in performance at Bokoni Mine
continues, with all key operating and financial metrics moving in
the right direction. Our immediate goals remain re-positioning
Bokoni towards the lower end of the PGM* industry cost curve and
generating improved cash flows from our operations, despite what
remains a challenging environment for South African PGM producers.
These operational improvements, together with our improved balance
sheet after implementation of the Restructure Plan, will place
Bokoni and our Company in a strong position to achieve our growth
strategy through to 2020".
*PGM means platinum group metals (4E),
comprising platinum, palladium, rhodium and gold.
Summary of ooperating and financial
performance
Operating
results |
Q2
2013 |
Q2
2012 |
%
Change |
H1
2013 |
H1
2012 |
%
Change |
Tonnes milled |
T |
361,071 |
289,575 |
24.7 |
664,035 |
532,629 |
24.7 |
Recovered grade |
g/t milled,4E |
3.72** |
4.08 |
(8.8) |
3.77 |
3.67 |
2.7 |
4E oz produced |
oz |
42,901 |
34,098 |
25.8 |
78,944 |
61,897 |
27.5 |
UG2 mined to total
output |
% |
31.8 |
32.5 |
(2.2) |
33.0 |
32.8 |
0.5 |
Primary development |
M |
2,465 |
2,706 |
(8.9) |
4,421 |
5,223 |
(15.3) |
Capital expenditure |
$m |
13.2 |
12.7 |
(3.9) |
25.2 |
19.6 |
(28.6) |
Operating cost/tonne
milled |
ZAR/t |
1,158 |
1,211 |
4.4 |
1,221 |
1,317 |
7.3 |
Operating cost/4E oz |
ZAR/4E oz |
9,743 |
10,285 |
5.3 |
10,264 |
11,363 |
9.7 |
Lost-time injury
frequency rate
("LTIFR") |
Per 200,000
hours worked |
0.16 |
1.37 |
88.3 |
0.57 |
1.42 |
60.1 |
Total permanent
labour
(mine operations) |
Number |
3,565 |
3,511 |
1.5 |
3,565 |
3,511 |
1.5 |
Total contractors
(mine operations) |
Number |
1,717 |
1,963 |
(12.5) |
1,717 |
1,963 |
(12.5) |
Consolidated
statement of comprehensive income summary |
Expressed in Canadian
Dollars (000's) |
Q2 2013 |
Q2 2012 |
%
Change |
H1
2013 |
H1
2012 |
%
Change |
Revenue |
48,427 |
38,733 |
25 |
93,508 |
72,812 |
28.4 |
Cash operating costs*** |
44,405 |
43,499 |
(2.1) |
88,442 |
87,398 |
(1.2) |
Cash operating profit/(loss) |
4,022 |
(4,716) |
185.3 |
5,066 |
(14,586) |
134.7 |
Operating margin |
8.3% |
(12.2%) |
168 |
5.4% |
(20%) |
127 |
EBITDA**** |
6,816 |
(8,541) |
179.8 |
24,793 |
(22,141) |
212 |
Loss after tax |
(13,255) |
(40,412) |
67.2 |
(17,880) |
(81,679) |
78.1 |
Non-controlling interest |
(3,964) |
(19,342) |
79.5 |
(2,424) |
(39,073) |
93.8 |
Loss attributable to Atlatsa
shareholders |
(9,291) |
(21,069) |
55.9 |
(15,455) |
(42,606) |
63.7 |
Basic and diluted loss per
share - cents |
(2) |
(5) |
60 |
(4) |
(10) |
60 |
** Includes lower-grade open cast
material.
*** Cash operating costs represent all on mine production and
processing costs, excluding depreciation charges.
**** EBITDA 2013 numbers includes a fair value gain on
re-pricing of Atlatsa debt facility from Anglo American
Platinum.
Safety
Bokoni's LTIFR for the quarter improved to 0.16
per 200,000 hours worked; an 88.3% improvement when compared to Q2
2012.
After completion of H1 2013, on August 3, 2013 Bokoni Mine achieved 2 million
fatality free shifts after 15 months of continuous operations
without incident. This achievement was marred by an accident which
occurred on August 6, 2013 at
Bokoni's Vertical Shaft operations, where a contract miner lost his
life in a fall of ground incident.
Management at Bokoni is currently instituting
remedial action in order to mitigate against the potential
recurrence of this unfortunate accident.
Operational results
This quarter marks the first anniversary since
the appointment of the new management team at Bokoni and a number
of its on mine initiatives introduced during the past year are
beginning to bear fruit, as demonstrated by the significant
improvement in all key production metrics over the period.
PGM ounces produced improved by 26% and 27.5%
respectively, when measured on a quarterly and half year
comparative basis.
The improvement in production metrics can
largely be attributed to:
- improved operating crew efficiencies, with stoping teams now
achieving on average 314m²/crew, representing a 22% year-on-year
improvement;
- a new productivity linked bonus incentive scheme;
- better mining flexibility through the creation of additional
immediately stopable ore reserves (IMS), with one fully-equipped
panel available for every two panels being mined;
- improved geological potholing management through dedicated re
and sub development crews having achieved a 64% year-on-year
improvement in metres developed; and
- improved support structures on the UG2 mining operations.
Primary development at the Bokoni operations has
decreased year-on-year due to a deferral of UG2 expansion plans and
the adoption of a new operating plan at Bokoni which extends
through to 2020, as detailed in the Company's announcement on
March 27, 2013.
Open cast mining operations
During Q2 2013, open cast mining commenced at
Bokoni's Merensky operations with the initial box-cut and
associated surface infrastructure being completed during the
period. Mining operations are currently in the ramp-up phase with
the box-cut extending east to west along strike on the Merensky
reef sub-outcrop. Steady state open cast mining operations of
40,000 tpm are anticipated to be achieved during September 2013.
Production mix
Bokoni Mine's production mix will remain at a
ratio of approximately 70% Merensky to 30% UG2 reef for the
foreseeable future, as UG2 expansion plans remain deferred in the
medium term and open cast mining operations are carried out on only
the Merensky reef horizon. At current spot PGM prices, the Merensky
reef revenue basket per PGM ounce yields approximately 13% higher
revenue than the UG2 basket price at Bokoni.
Financial results
Revenue
The Company's revenue increased materially when
measured on a quarterly and half year comparative basis. These
increases are attributable to much improved production and sales
volumes, together with an improved ZAR PGM revenue basket price
achieved during the periods under review, impacted largely by the
weakening of the ZAR by 16.8% relative to the US$ over the
comparative quarterly period.
The ZAR PGM basket price achieved for Q2 2013
was 15.9% higher year-on-year at ZAR11,168 when compared to ZAR9,640 for Q2 2012, whilst the US$ PGM basket
price decreased by 0.9% year-on-year to US$1,176 compared to US$1,186 in Q2 2012.
Operating costs
Despite increased production volumes, absolute
cash operating costs over the comparative quarter and half year
periods remained relatively flat, notwithstanding annual wage
increases of 8% and power utility increases in excess of 25% over
the same period. Cost containment was partly achieved through
employee numbers remaining relatively constant, whilst contract
labour decreased by 12.5% during the period under review.
ZAR per PGM ounce unit costs, representing the
key operating cost efficiency measure for the Company, decreased by
9.7% to ZAR 9,743/ PGM oz over
the comparative half year period.
Absolute and unit cost cutting initiatives
remain a key focus at the Bokoni operations, with further
reductions in unit costs anticipated from Q3 2013 onwards as a
result of continued efficiency improvements, together with ramp up
of the Merensky open cast mining operations.
Capital
Capital expenditure at the Bokoni operations
remained relatively constant in absolute terms, with stay in
business capital of $3.3 million
(ZAR728/ PGM oz), remaining at
approximately 8% of monthly operating expenditure. Project
expansion capital remains at between ZAR20
million ($2.1 million) to ZAR25
million ($2.6 million) per
month, primarily focused on the Brakfontein Merensky and Middelpunt
Hill UG2 shaft and mining footprint expansions, as underground
mining operations ramp up from their current level of 120,000 tpm
to 160,000 tpm steady state in the medium term. During this ramp up
phase the Merensky open cast operations will be used to ensure that
the Bokoni concentrator plants run at their full installed
processing capacity of 160,000 tpm.
Cash and available facilities
As at June 30,
2013 and the Group had unrestricted cash and equivalents of
$10.7 million with available undrawn
facilities on its existing loan from Anglo American Platinum of
$17.4 million. Available debt
facilities will increase to a maximum facility limit of
ZAR1.55 billion ($165 million) on implementation of the Revised
Restructure Plan.
Earnings and profitability
The improved operational and cost performance at
Bokoni Mine resulted in the Company achieving a Cash operating
profit of $4 million*** for the
quarter under review, whilst EBITDA**** increased to $6.8 million during the same period.
The Company recognised a fair value gain of
$8.8 million during the quarter, and
$29.4 million for the half year,
arising from the implementation of phase one of the Revised
Restructure Plan, which took place on September 28, 2012. This had a positive impact on
the Company's earnings for the period.
The Company continues to incur significant
finance charges (Q2 2013: $14.7
million) on its historical outstanding debt owing to Anglo
American Platinum, which will continue until such time as the
Revised Restructure Plan is implemented and its current
attributable debt of ZAR3.67 billion
($390 million) is reduced by
approximately ZAR2.45 billion
($260.7 million), anticipated to be
completed during Q3 2013.
Notwithstanding continued high levels of finance
expenses, the Company managed to reduce its loss attributable to
shareholders and loss measured on a per share basis by
approximately 60% over the comparative periods, with its basic and
diluted loss per share improving year-on-year from $0.05 cps to $0.02
cps.
Revised Restructure Plan
On March 27, 2013,
the Company announced that it had entered into a ZAR3.5 billion ($372.3
million) Revised Restructure Plan with Anglo American
Platinum, which will have a material positive impact on the
Company's operational and financial outlook going forward.
During Q2 2013 the Company's shareholders
approved the Revised Restructure Plan in an Extraordinary General
Meeting of Shareholders held on June 28,
2013.
The implementation of the Revised Restructure
Plan remains subject to the fulfilment or, where appropriate,
waiver of the following conditions precedent:
- All of the agreements constituting the Revised Restructure Plan
becoming unconditional;
- Approval by the Competition Authorities of South Africa;
- Approval by the Exchange Control division of the South African
Reserve Bank;
- Approval by the Department of Mineral Resources, South Africa; and
- Approvals by the TSX Venture Exchange, JSE Limited and
NYSE-MKT.
The Revised Restructure Plan is anticipated to
be completed during Q3 2013.
For additional information on the Restructure
Plan refer to the press releases of Atlatsa dated February 2, 2012, March
15, 2012, March 30, 2012,
May 3, 2012, June 15, 2012, July 26,
2012, September 7, 2012,
September 27, 2012, October 2, 2012, October
22, 2012, December 3, 2012,
January 21, 2013, March 27, 2013, March 28, 2013, April 5,
2013 and July 2, 2013 as well
as the material change reports filed on February 13, 2012, September 27, 2012 and April 8, 2013 all of which are available on SEDAR
at www.sedar.com and the Company's website
www.atlatsaresources.co.za.
Migration to TSX
During Q2 2013, the Company received conditional
approval from the Toronto Stock Exchange (TSX) to list the
Company's common shares on the TSX at which point the Company's
common shares will de-listed from the TSX Venture Exchange. The
listing remains subject to certain conditions. These conditions
include, without limitation, final approval from the TSX and the
completion of the proposed Revised Restructure Plan.
The Company anticipates that the graduation to
the TSX will take place following completion of the Revised
Restructure Plan, and will provide an update as to timing as it
finalizes these details. Following graduation to the TSX,
Atlatsa's common shares will trade on the TSX under the stock
symbol "ATL".
Accounting Policies and Going
Concern
The FY 2012 financial statements are prepared on
the basis of accounting policies applicable to a going concern. The
Revised Restructure Plan described above was successfully approved
by Atlatsa shareholders on June 28,
2013, but remains subject to fulfilment or waiver of certain
conditions precedent.
The audit report included in the Company's
Annual Report on Form 20-F ("20-F") contained an opinion from its
independent registered public accounting firm, KPMG Inc., which
included a "going concern" explanatory paragraph. The Company
discusses this matter in Note 2 to the annual financial statements
for the year ended December 31, 2012,
filed on March 28, 2013 on
www.sedar.com, the Company's website and in its 20-F. Shareholders
should refer to the Q2 2013 MD&A for a discussion of the
Company as a going concern in Note 2 of the annual financial
statements for the year ended December 31,
2012, which continue to apply to the Company as of the date
of this release.
Note on conference call
Atlatsa will not be holding a conference call or
presentation to accompany these results. The Company will resume
detailed shareholder communications in due course after completion
of its Revised Restructure Plan.
Queries:
On behalf of Atlatsa
Joel Kesler
Chief Commercial Officer
Office: +27 11 779 6800
Mobile: +27 82 454 5556
Russell and Associates
Charmane Russell / Pam Wolstenholme
Office: +27 11 880 3924
Mobile: +27 82 372 5816 / +27 82 927 8957
Macquarie First South Capital (Pty) Ltd
Annerie Britz
Office: +27 11 583 2000
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 MKT 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 Revised
restructure Plan 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
operating plan will continue to be implemented as expected and will
achieve improvements in production and operational efficiencies as
anticipated; the Revised Restructure Plan will be implemented in a
timely manner; 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
Revised Restructure Plan in a timely manner, if at all;
- uncertainties related to the continued implementation of the
Bokoni Mine operating plan and open cast mining operations;
- uncertainties related to the timing of the implementation of
the Bokoni Mine deferred expansion plans;
- 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,
2012 filed at www.sedar.com and with the United States
Securities and Exchange Commission at www.sec.gov and other
disclosure documents that are available at www.sedar.com.
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.
SOURCE Atlatsa Resources Corporation