- Bokoni Mine achieves a positive EBITDA of $10.4 million and starts to generate cash from
operations
- Q3 PGM production increases by 23%
- Significant improvements in development to increase
Bokoni mining footprint
- Open cast mine achieves steady state production target in
September 2013
- Financial Restructure Plan nears completion
JOHANNESBURG,
Nov. 14, 2013 /CNW/ - Atlatsa
Resources Corporation (Atlatsa or the Company) (TSXV: ATL; NYSE
MKT: ATL; JSE: ATL) announces its operating and financial results
for the three and nine months ended September 30, 2013. This release should be read
together with the Company's financial statements and Management
Discussion & Analysis filed on www.atlatsaresources.co.za and
www.sedar.com. Currency values are presented in South African Rand
(ZAR), Canadian Dollars ($) and United States Dollars (US$).
Commenting on the results Atlatsa's Chief
Executive Officer, Harold Motaung,
said, "Whilst Bokoni Mine delivered another positive quarterly
operational performance, with much improved development at our two
key ramp up projects, together with the commissioning of our open
cast mine to steady state, it is with deep regret that the quarter
was also marred by the loss of three members of our work force. The
board and management of Atlatsa would like to express our deepest
condolences to the bereaved families. Our focus at Bokoni remains
to continue to improve our operational performance, whilst
maintaining the high safety standards we have set for
ourselves."
*PGM means platinum group metals (4E),
comprising platinum, palladium, rhodium and gold.
Summary of operational and financial
performance
Operating results |
Q3
2013 |
Q3
2012 |
%
Change
Yr-on-Yr |
Q2
2013 |
%
Change
Q-on-Q |
Tonnes milled |
T |
436,785 |
324,727 |
34.5 |
361,071 |
21.0 |
Recovered grade milled |
g/t PGM |
3.50** |
3.84 |
(8.8) |
3.72** |
(5.7) |
PGM oz produced |
Oz |
47,611 |
38,819 |
22.7 |
42,901 |
3.5 |
UG2 mined to total
underground output |
% |
32.4 |
36.8 |
(12) |
31.8 |
1.8 |
Primary development |
M |
3,407 |
2,342 |
45.5 |
2,465 |
38.2 |
Capital expenditure |
$m |
12.5 |
14.2 |
(12.3) |
13.2 |
(5.2) |
Operating cost/tonne milled |
ZAR/t |
1,105 |
1,145 |
3.5 |
1,158 |
4.5 |
Operating cost/PGM oz |
ZAR/PGM oz |
10,140 |
9,577 |
(5.9) |
9,743 |
(4.1) |
Lost-time injury
frequency rate (LTIFR) |
Per 200,000
hours worked |
0.31 |
1.05 |
70.5 |
0.16 |
(93.8) |
Total permanent labour
(mine operations) |
Number |
3,698 |
3,587 |
3.1 |
3,565 |
3.7 |
Total contractors
(mine operations) |
Number |
2,085 |
1,880 |
10.9 |
1,717 |
21.4 |
Financial
results
Expressed in Canadian
Dollars (000's) |
Q3 2013 |
Q3 2012 |
%
Change |
Q2 2013 |
Variance
%
Q-on-Q |
Revenue |
54,165 |
43,936 |
23.3 |
48,427 |
11.9 |
Cash operating costs*** |
49,244 |
43,707 |
(12.7) |
44,405 |
10.9 |
Cash operating profit/(loss) |
4,921 |
229 |
>100 |
4,022 |
22.4 |
Operating margin |
9.1% |
1% |
>100 |
8.3% |
9.6 |
(Loss)/ Profit after tax |
(15,455) |
49,795 |
(>100) |
(13,255) |
16.6 |
Non-controlling interest |
(2,576) |
(17,754) |
(85.5) |
(3,964) |
(35.0) |
(Loss)/Profit attributable to
Atlatsa shareholders |
(12,880) |
67,549 |
(>100) |
(9,291) |
38.6 |
Basic and diluted (loss)/profit
per share |
(0.03) |
0.16 |
(>100) |
(0.02) |
50.0 |
** Includes lower-grade open cast
material.
*** Cash operating costs represent all on mine production and
processing costs, excluding depreciation charges.
Safety
Notwithstanding Bokoni's LTIFR improving by
70.5% when compared to Q3 2012, this quarter was marked by a
disappointing safety performance for the Company.
Having achieved two million fatality free
shifts after 15 months of continuous operations, the quarter was
marred by three fatal accidents which occurred in separate
incidents on August 6, August 28 and September
21. The fatalities resulted from two fall-of-ground
accidents and one rigging-related accident.
Management at Bokoni has engaged extensively
with its work force and the DMR's Safety Division in an effort to
help prevent similar accidents occurring in the future.
Operational results
Q3 2013 represented a key quarter for
entrenching Bokoni's new operational strategy, as part of the
Company's Restructure Plan announced in March 2013.
In terms of the new operational plan, Bokoni
will place significant focus on its underground mine development by
increasing the mining footprint at its key Brakfontein Merensky and
Middelpunt Hill (MPH) UG2 operations, which remain in ramp-up phase
through to 2018. During this ramp-up phase underground mine
production will be supplemented with ore generated from the
Merensky open cast mine to meet installed concentrator processing
capacity of 160,000 tpm.
Key operational features for the quarter were as
follows:
- a significant improvement in primary development, which
increased by 1,000 m (46%) year-on-year. Mining footprints were
expanded at both the Brakfontein Merensky and MPH UG2 shaft
operations, where shaft decline development has now extended below
7 level (450m below surface) at Brakfontein and 2 level (300m below
surface) at MPH;
- tonnes milled increased by 35% year-on-year. Underground tonnes
milled improved by 13%, with the balance of the improvement
comprising additional ore production from open cast operations;
- recovered grade decreased to 3.5 g/t as a result of dilution
from the lower grade opencast ore. Ore grades from underground
operations remained constant over the period;
- production of PGM oz improved by 23% year-on-year. Operational
focus remains on improving Bokoni's ounces produced/tonnes milled
ratio by ensuring that both the open cast and underground
operations deliver on grade targets and maintain concentrator
recoveries at targeted levels (90% Merensky underground, 87% UG2
underground and 70% Merensky open cast); and
- the Merensky open cast mine achieved a steady state target of
40,000 tpm in September 2013.
Financial results
Revenue
The Company's revenue increased materially when
measured on a quarterly and nine month 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 relative to the US$.
The ZAR PGM basket price achieved for Q3 2013
was 19.9% higher year-on-year at ZAR11,620 when compared to ZAR9,688 for Q3 2012. The US$ PGM basket price
decreased by 0.8% year-on-year to US$1,163 compared to US$1,172 in Q3 2012.
Operating costs
Unit operating costs remained relatively flat
year-on-year, notwithstanding provisions made during the financial
quarter for annual wage increases, a 12% increase in power utility
charges and a 25% increase in working cost development charges
associated with a 46% year-on-year increase in primary development
at Bokoni's ramp up operations.
ZAR per tonne milled unit costs decreased by
3.5% year-on-year from ZAR 1,145/t to
ZAR 1,105/t as a result of increased
throughput from both underground and open cast operations.
ZAR per PGM ounce unit costs increased by 5.9%
to ZAR 10,140/ PGM oz from
ZAR 9,577/ PGM oz in the comparative
period of 2012.
Capital
Total capital expenditure for Q3 2013 was $12.5 million, compared to $14.2 million for Q3 2012.
Earnings and profitability
- The Company recognised a fair value gain of $5.4 million during the quarter, compared to
$107.6 million in Q3 2012, arising
from implementation of phase one of the Restructure Plan, which
took place on September 28, 2012.
- Bokoni Mine's earnings before interest, tax, depreciation and
amortization (EBITDA) improved significantly year-on-year, with
Bokoni achieving a positive EBITDA of $10.4
million for Q3 2013, compared to a negative EBITDA of
$3.3 million in Q3 2012.
- Pending final implementation of the Restructure Plan the
Company continues to incur significant finance charges (Q3 2013:
$15.1 million) on its historical debt
outstanding to Anglo American Platinum. This expense contributed
materially towards the Company's loss for the quarter of
$15.5 million, with a basic and
diluted loss per share of $0.03.
- The Company generated cash from operations of $7.4 million in Q3 2013, compared to cash
utilised from operations of $10.8
million in Q3 2012. This movement was partially attributable
to changes in working capital. Notwithstanding these working
capital changes, cash generated from operations improved to
$2 million, reflecting a better
operational performance at Bokoni.
- As at September 30, 2013 the
Company had unrestricted cash and equivalents of $20.5 million.
Restructure Plan
On March 27, 2013,
the Company announced that it had entered into a Restructure Plan
with Anglo American Platinum, which will have a material positive
impact on the Company's operational and financial outlook going
forward (Restructure Plan).
During Q2 2013 the Company's shareholders
approved the Restructure Plan in an Extraordinary General Meeting
of Shareholders held on June 28,
2013.
During Q3 2013 the following conditions for
implementation of the Restructure Plan were met:
- in terms of Section 102 of the South African Mineral and
Petroleum Resources Development Act no. 28 of 2002 (MPRDA), the
Department of Mineral Resources (DMR) gave its consent for the
sub-division and transfer of mineral properties at the Ga-Phasha
project area between Atlatsa and Anglo American Platinum;
- the South African Competition Authorities granted unconditional
approval for implementation of the Restructure Plan;
- the DMR granted its consent in terms of Section 11 of the MPRDA
for the sale and transfer of mineral rights relating to the
Boikgantsho Platinum project from Atlatsa to Anglo American
Platinum;
- the Exchange Control division of the South African Reserve Bank
granted the necessary approvals for the Company to implement the
Restructure Plan; and
- the DMR renewed prospecting rights relating to the Boikgantsho
Platinum project, situated on the Northern Limb of the Bushveld
Igneous Complex, adjacent to Anglo American Platinum's Mogalakwena
Mine operations.
The implementation of the Restructure Plan
remains subject to the fulfilment or, where appropriate, waiver of
the following conditions precedent:
- all of the agreements constituting the Restructure Plan
becoming unconditional; and
- outstanding execution of new mining rights and approvals
required from the DMR relating to certain financial security being
registered over mining rights.
For additional information on the Restructure Plan,
refer to the press releases of Atlatsa dated between February 2, 2012 and October 31, 2013 all of which are available on
SEDAR at www.sedar.com and the Company's website
www.atlatsaresources.co.za.
Accounting Policies and Going
Concern
The FY 2012 financial statements are prepared on
the basis of accounting policies applicable to a going concern. The
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, on the Company's website and in its 20-F.
Shareholders should refer to the Q3 2013 MD&A and condensed
consolidated interim financial statements (note 2) for an update of
the Company as a going concern, which applies 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 Restructure Plan.
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.
SOURCE Atlatsa Resources Corporation