Announcements 2020

Acquisition of R1.27 billion of Zambezi preference shares, fully funded through a placement of R1.27 billion of notes under the DMTN programme, and an increase in the DMTN programme amount to R10 billion

Northam shareholders are referred to the announcement dated 1 November 2019 (“previous announcement”) pertaining to the acquisition by Northam of preference shares in Zambezi Platinum (RF) Limited (“Zambezi”) (“Zambezi preference shares”).


1.    ACQUISITION OF ZAMBEZI PREFERENCE SHARES FOR R1.27 BILLION

Northam shareholders are referred to the announcement dated 1 November 2019 (“previous announcement”) pertaining to the acquisition by Northam of preference shares in Zambezi Platinum (RF) Limited (“Zambezi”) (“Zambezi preference shares”).

Northam is pleased to announce that, since the date of the previous announcement, it has acquired an additional 16.7 million Zambezi preference shares for a total cash consideration of approximately R1.27 billion (“ZPLP acquisition”). Northam now holds a total of 53 376 850 Zambezi preference shares, representing approximately 33.38% of all Zambezi preference shares in issue.

As stated in the previous announcement, Northam’s acquisition of Zambezi preference shares will reduce the preference share dividend expense and liability included in Northam’s consolidated financial statements, as well as Northam’s potential financial exposure under the guarantee it provided to holders of Zambezi preference shares, should the guarantee be called upon. Furthermore, should Zambezi redeem the Zambezi preference shares through a distribution of ordinary shares in Northam (“Northam shares”) held by Zambezi, then the redemption of the Zambezi preference shares held by Northam at such time will result in a distribution of Northam shares to Northam, thereby reducing the number of Northam shares in issue.

The ZPLP acquisition has been fully funded through the placement of the new notes, as further detailed below.

The ZPLP acquisition is not a categorised transaction  in terms of the JSE Limited Listings Requirements and information relating thereto is provided for information purposes only.

2.    INCREASE IN NORTHAM’S DMTN PROGRAMME AMOUNT FROM R5 BILLION TO R10 BILLION

In terms of the programme memorandum in respect of Northam's ZAR5 000 000 000 Domestic Medium Term Note Programme dated 3 August 2012, as amended and / or supplemented from time to time (“DMTN Programme”), the board of directors of Northam has approved an increase in the Programme Nominal Amount from ZAR5 000 000 000 to ZAR10 000 000 000. This increase will provide Northam with additional funding flexibility.

3.    PLACEMENT OF R1.27 BILLION OF NEW NOTES

Northam is pleased to announce that it has completed a private placement of notes to the value of R1.27 billion (“new notes”) under its DMTN Programme, in an amount equal to the consideration payable under the ZPLP acquisition. The new notes were placed as a new tranche under the NHM014 series and were listed on the Interest Rate Market of the JSE today, 3 April 2020. The new notes were issued on the same terms as the NHM014 series with a maturity date of 20 November 2021 and a floating interest rate of 3 month ZAR-JIBAR plus 2.5%, with interest payable quarterly. Following the placement of the new notes, the total aggregate nominal amount of notes in issue under the DMTN Programme amounts to R5.445 billion.

Johannesburg
3 April 2020

Corporate Advisor, Sponsor and Debt Sponsor to Northam
One Capital

Sole Arranger and Dealer to Northam in respect of the new notes and the DMTN Programme
One Capital

Attorneys to Northam
Cliffe Dekker Hofmeyr Inc.

Legal Advisors to Northam, the Arranger and the Dealer in respect of the new notes and the DMTN Programme
Bowman Gilfillan Inc.

Listing of tap issue (NHM014) under the increased DMTN programme

Noteholders are advised that the board of directors of Northam has approved an increase in the Programme Nominal Amount in terms of the provisions of the programme memorandum for its ZAR5 000 000 000.00 Domestic Medium Term Note Programme dated 3 August 2012, as amended and / or supplemented from time to time (“DMTN Programme”), from ZAR5 000 000 000.00 to ZAR10 000 000 000.00.


Noteholders are advised that the board of directors of Northam has approved an increase in the Programme Nominal Amount in terms of the provisions of the programme memorandum for its ZAR5 000 000 000.00 Domestic Medium Term Note Programme dated 3 August 2012, as amended and / or supplemented from time to time (“DMTN Programme”), from ZAR5 000 000 000.00 to ZAR10 000 000 000.00.

Noteholders are further advised that the JSE Limited (“JSE”) has granted approval for the listing of a tap issue of NHM014 Senior Unsecured Floating Rate Notes (“Notes”), under the DMTN Programme, as guaranteed by Booysendal Platinum Proprietary Limited, with effect from 3 April 2020.

The details pertaining to the tap issue of NHM014 are as follows:

Instrument Type: Senior Unsecured Floating Rate Notes
Total Notes in Issue: ZAR5 445 000 000.00 including this issue
Instrument Code: NHM014
Nominal Amount: ZAR1 270 000 000.00
Issue Price: 101.066164%
Interest Rate: 3 Month ZAR-JIBAR plus 250 bps
Interest Rate Determination Date(s):       20 February, 20 May, 20 August and 20 November (or the first Business Day of each Interest Period) of each year until the Maturity Date
Coupon Rate Indicator: Floating
Issue Date: 3 April 2020
Interest Commencement Date: 20 February 2020
Maturity Date: 20 November 2021
Final Redemption Amount: 100% of Nominal Amount
Last Day to Register: By 17h00 on 9 February, 9 May, 9 August and 9 November of each year until the Maturity Date
Books Closed Period: From 10 February to 19 February, 10 May to 19 May, 10 August to 19 August and 10 November to 19 November of each year until the Maturity Date (all dates inclusive) or if any early redemption occurs, 10 days prior to the actual Redemption Date
Interest Payment Date(s): 20 February, 20 May, 20 August and 20 November of each year until the Maturity Date
ISIN No: ZAG000163650
Business Day Convention: Following Business Day
Other: The applicable pricing supplement (“APS”) contains additional terms and conditions to the Terms and Conditions as contained in the DMTN Programme (“Additional Terms and Conditions”)
Summary of Additional Terms and Conditions: The Additional Terms and Conditions pertain to the applicable guarantee and the amendment of Condition 16.1 (Senior Notes) by including additional Events of Default in terms of Condition 16.1.1.9 (Other) of the Terms and Conditions. Investors should refer to Appendix “A” of the APS for full details of the Additional Terms and Conditions, available on Northam’s website: https://www.northam.co.za/downloads/send/96-files/1280-listing-of-tap-issue-nhm014

The Notes will be immobilised in the Central Securities Depository (CSD) and settlement will take place electronically in terms of JSE Rules.

Johannesburg
2 April 2020

Sole Arranger, Dealer and Debt Sponsor to Northam in respect of the Notes
One Capital

Legal Advisors to Northam, the Arranger and the Dealer in respect of the Notes
Bowman Gilfillan Inc.

Dealings in securities

In compliance with paragraphs 3.63 to 3.74 of the JSE Limited Listings Requirements (“Listings Requirements”), Northam advises its shareholders of the following dealings by an associate of a director of the company:


In compliance with paragraphs 3.63 to 3.74 of the JSE Limited Listings Requirements (“Listings Requirements”), Northam advises its shareholders of the following dealings by an associate of a director of the company:

Name of director Khomotso Brian Mosehla
Name of associate Business Venture Investments No 1774 Proprietary Limited
Nature of the transaction: Sale of shares
Nature and extent of director’s interest Indirect beneficial
Class of shares Ordinary shares
Date of transaction 23 March 2020
Price per preference share R55.00 per ordinary share
Total number of ordinary shares 64 009
Value of transaction R3 520 495.00
Transactions completed On market
Clearance obtained in terms of paragraph 3.66 of the Listings Requirements Yes

Johannesburg
25 March 2020
Sponsor and Debt Sponsor
One Capital

Interest payments notification – NHM012 and NHM015

Northam bondholders are advised of the following interest payments due on Friday, 13 March 2020:


Northam bondholders are advised of the following interest payments due on Friday, 13 March 2020:

Bond Code: NHM012
ISIN No: ZAG000160136
Coupon: 10.55%
Interest Period: 13 December 2019 to 12 March 2020
Interest Amount Due: R2 630 273.97
Payment Date: 13 March 2020
Date Convention: Following Business Day
 
Bond Code: NHM015
ISIN No: ZAG000164922
Coupon: 10.10%
Interest Period: 13 December 2019 to 12 March 2020
Interest Amount Due: R12 590 410.96
Payment Date: 13 March 2020
Date Convention: Following Business Day

Johannesburg
10 March 2020

Debt Sponsor
One Capital

Northam joins SA’s blue chips in JSE Top 40 index

Northam Platinum is pleased to advise that the company has for the first time been included in the FTSE/JSE Top 40 index, with a ranking of 32. The admission is effective from 23 March 2020.


Johannesburg, 05 March 2020. Northam Platinum is pleased to advise that the company has for the first time been included in the FTSE/JSE Top 40 index, with a ranking of 32.  The admission is effective from 23 March 2020.

Northam was first listed on the JSE exactly 33 years ago today, 5 March 1987 with a single developing operating asset in its portfolio. The group has since transformed into a multi-asset, diversified quality platinum group metal producer.  At close of business yesterday Northam’s market cap was pegged at R60 billion, reflecting the extraordinary capital appreciation which the company has achieved.

Northam’s H1 results were issued only a few days ago on Friday 28 February, when the company declared a record operating profit of R3 billion.  Chief executive Paul Dunne paid tribute to the company’s long-standing and loyal shareholders and employees, and the support that he has received in executing the group’s successful growth strategy.

Issued by R&A Strategic Communications, Johannesburg, Tel +27 (0)11 880 3924;
Marion Brower +27 71 493 0387

Note to editors
The Top40 is South Africa’s best-known index. It includes the 40 largest companies listed on the JSE. This is the index that most people monitor as an overall benchmark for the local exchange. Even though it contains only 40 out of the roughly 400 shares listed on the JSE, it represents over 80% of the total market cap of all JSE listed companies.

For further information on the Top 40 go to https://www.jse.co.za/services/market-data/indices/ftse-jse-africa-index-series

Interest payment notification – NHM013

Northam bondholders are advised of the following interest payment due on Monday, 9 March 2020.


Northam bondholders are advised of the following interest payment due on Monday, 9 March 2020:

Bond Code: NHM013
ISIN No: ZAG000162181
Coupon: 9.2%
Interest Period: 9 December 2019 to 8 March 2020
Interest Amount Due: R11 468 493.15
Payment Date: 9 March 2020
Date Convention: Following Business Day

Johannesburg
4 March 2020

Debt Sponsor
One Capital

Northam rewards shareholders as growth strategy matures

Northam Platinum released its results for the first half-year of the 2020 financial year today, Friday 28 February 2020. 


First meaningful cash flow generated

Johannesburg, 28 February 2020. Northam Platinum released its results for the first half-year of the 2020 financial year today, Friday 28 February 2020. 

Highlights for the reporting period:

  • 19.6% increase in production from own operations to 306 738oz 4E
  • Basket price climbs by 42.4% to USD1 443/oz 4E
  • Record H1 operating profit at R3 billion
  • Profit after tax R1.1 billion
  • R695 million free cash flow after capex
  • Shareholders benefit from purchase of ZPLP shares to the value of R2.4 billion
  • Five-year wage settlement at Booysendal
  • 37.8% cash profit margin (H1 2019: 20.0%)

Higher production contributions from both Zondereinde and Booysendal, along with new output from Eland boosted equivalent refined metal production by 19.6% to 306 738oz 4E. Group unit cash costs increased by 12.6% to R24 780/Pt oz.

At a presentation in Johannesburg today, CEO Paul Dunne reiterated that Northam had reached the final phase of its strategic journey. “The way Zambezi is structured gives us a very obvious and powerful way to return value to shareholders through the purchase of the Zambezi preference shares. This process has started and we’ll continue doing this by applying free cash over and above our targeted net debt position.”

Since 2015 Northam has spent R1.8 billion on acquisitions, which have added 48.8Moz 4E of additional resources, two concentrator plants with a combined milling capacity of 500 000 tonnes per month and other infrastructure. The cumulative expenditure to date on developing these projects is R8.3 billion, and capital forecast for the full financial year is estimated at R2.7 billion.

“Shareholders are always the last in line to gain from a company’s success via returns on capital employed. Our shareholders have been patient and loyal over a number of years while we have developed and executed our growth strategy, significantly benefitting our broader stakeholder base. That strategy is starting to bear fruit and it’s time to reward our shareholders’ patience,” commented Dunne.

Referring to the operating environment, Dunne said, “Policy uncertainty remains a serious impediment to growth in the South African mining industry. Government’s role in this respect is to provide enabling legislation which will encourage investment. The mining industry has the potential to create businesses with a strong economic multiplier effect and thousands of sustainable jobs with growth and development opportunities for individuals and communities alike.

“Business is doing all it can to keep the economy afloat but it cannot do it alone. The state is also part of the economy and needs to play its role in competently managing strategic assets such as Eskom, developing enabling legislation, and ensuring the safety of all citizens and business enterprises.”

Zondereinde

Production of equivalent refined metal at Zondereinde increased by 5.4% to 162 380oz 4Edespite a fire early in the reporting period. The higher volumes were largely attributable to a stockpile buildup and a combination of higher milled tonnages, an increase in head grade and concentrator recoveries.

Stoping volumes are building up in the Western Extension and further progress has been made on the deepening project. Good progress has been made in planning for additional access to the Western Extension. The enhanced metallurgical facilities continue to operate smoothly while plans to increase the capacity of the base metal removal plant are well advanced.

Total operating costs at Zondereinde were 30.4% higher, reflecting the effects of an increased employee complement, higher power costs and volumes, translating into a 9.6% increase in unit cash costs per equivalent refined platinum ounce, to R25 890/Pt oz (H1 F2019: R23 614/Pt oz).

Booysendal

The combined milled tonnages from the North and Central mines increased by 27.4% to 1 738 054 tonnes (H1 F2019: 1 363 924 tonnes), translating into a total of 132 529oz 4E of metal in concentrate produced.  The dense media separation plant at the North concentrator is continuing to operate well within design parameters.

Total operating costs at Booysendal amounted to R1.7 billion (H1 F2019: R1.1 billion), a 50.4% increase. Volume increases, together with stores and power costs led to this rise. Higher production volumes resulted in the unit cash costs increasing by 11.6% to R18 714/Pt oz. The commissioning of the South mine, together with the full operation of the South concentrator (with low volumes) explains, to a large degree, the unit cost increase.

The development of Booysendal South is on track. At the Central UG2 mine, surface infrastructure construction is almost complete and underground development is progressing satisfactorily. The South aerial rope conveyor and the PGM circuit of the South concentrator are operating well. Construction of the Central Merensky boxcut is almost complete and underground development will start before the end of the financial year. In addition, earthworks and civil construction have started for the North aerial rope conveyor. This installation will allow transport of Merensky ore from the North and Central mines to the South concentrator and is scheduled to coincide with the respective stoping ramp up profiles.

Eland

At Eland, surface material continues to be treated through the chrome spirals and secondary PGM circuit, and underground development has resumed. Development of the Kukama decline system is ahead of schedule, employing mechanised drilling and blasting together with a Mobile Tunnel Borer (MTB) following a successful trial. Primary development will be the focus during the next 18 months, but an early mining demonstration, to optimise stoping methodologies is also in progress.

In parallel with the processing operations, development of the declines at the Kukama shaft started, together with refurbishment and recommissioning of underground equipment. The MTB trial was completed, yielding positive results, and will be applied to develop the Kukama belt decline barrel. A total of 528 metres were developed, ahead of plan, on the three-barrel decline system. In addition, an on-reef raise connection was holed in the West 1 section of the mine in order to trial and optimise planned stoping methodologies.

Looking to the future, Dunne pointed to focus areas which would be key to the group’s performance:

  • The management of an unreliable energy supply
  • Operational delivery and effective cost control
  • Effective project execution
  • Appropriate levels of capital allocation and returning value to shareholders

“Our operations are performing well and are expected to deliver a solid performance for the full financial year. Project execution is on track and is well positioned to benefit from the stronger PGM prices,” Dunne concluded.

Issued by R&A Strategic Communications, Johannesburg, Tel +27 (0)11 880 3924;
Marion Brower +27 71 493 0387
Memory Johnstone: +27 82 719 3081

Condensed reviewed interim financial results for the six months ended 31 December 2019

Key features


Key features

    Reviewed 6 months ended
31 December 2019
Reviewed 6 months ended
31 December 2018
Variance %
Normalised headline earnings R000 1 883 912 553 312 240.5
Normalised headline earnings per share cents 369.6 108.5 240.6
Sales revenue R000 7 824 901 4 982 761 57.0
Operating profit R000 2 959 543 1 030 780 187.1
Operating profit margin % 37.8 20.7 82.6
Profit/(loss) for the period R000 1 147 600 (63 837) N/A*
Total comprehensive income for the period R000 1 147 636 (55 626) N/A*
Headline earnings/(loss) per share cents 328.3 (19.0) N/A*
Earnings/(loss) per share cents 328.0 (18.2) N/A*
Cash generated from operating activities R000 2 033 332 1 297 758 56.7
EBITDA R000 3 192 549 1 124 540 183.9
Capital expenditure R000 1 352 238 1 544 087 (12.4)

* N/A indicates a percentage change from a negative to a positive balance.

Financial results

Normalised headline earnings have been calculated taking into account the headline earnings adjusted for items relating to the 2015 Zambezi Platinum (RF) Limited black economic empowerment transaction (“BEE transaction”); these include the preference share dividends associated with the BEE financing structure as well as the loss on derecognition of the preference share liability. Stripping out the impact of the BEE transaction resulted in normalised headline earnings increasing to R1.9 billion (H1 F2019: R553.3 million), which equates to normalised earnings per share, based on the total number of 509 781 212 issued shares, of 369.6 cents (H1 F2019: 108.5 cents), being an increase of 240.6%.

Sales revenue increased by 57.0% from R5.0 billion in H1 F2019 to R7.8 billion in the period under review. The increase is attributable to an 11.9% increase in the volume of PGMs sold to 329 760 oz 4E (H1 F2019: 294 823 oz 4E), a 42.4% increase in the 4E basket price to USD1 443/oz (H1 F2019: USD1 013/oz) and a 3.7% weaker average ZAR/USD exchange rate realised of R14.72 (H1 F2019: R14.19).   

A 23.1% increase in cost of sales and corresponding 57.0% increase in revenue resulted in operating profit increasing to R3.0 billion (H1 F2019: R1.0 billion), an all-time high for the group. This translates to an operating profit margin of 37.8%.

It is the first time since 2015 that the group has generated meaningful free cash flow after funding capital expenditure. This amounted to R695.8 million (H1 F2019: utilisation of R185.6 million).

It is expected that the group’s ability to generate free cash flow in the foreseeable future will be positively impacted by production growth and the continuing increase in Platinum Group Metal prices.

The board of directors of Northam (“board”) has resolved not to declare an interim dividend for the 2020 financial year (H1 F2019: R Nil per share).  The board is currently of the view that the most efficient way to return value to shareholders is by way of the purchase of Zambezi Platinum (RF) Limited preference shares. 

About this announcement

This short-form announcement is the responsibility of the directors of Northam, and is a summary of the information in the group’s full interim reviewed financial results announcement for the period ended 31 December 2019 and does not contain full or complete details. Any investment decisions by investors and/or shareholders should be based on the full interim reviewed financial results accessible via the JSE link at https://senspdf.jse.co.za/documents/2020/JSE/ISSE/NHM/Interim_20.pdf and available on the company’s website at https://www.northam.co.za/investors-and-media/publications/presentations/2020/send/144-2020/1273-interim-financial-results.

The full interim reviewed financial results announcement is also available for inspection at no charge at the company’s registered office and the offices of its sponsor, One Capital Sponsor Services Proprietary Limited (17 Fricker Road, Illovo), during normal business hours.

Johannesburg
28 February 2020

Sponsor and Debt Sponsor
One Capital

Interest payments notification – NHM010 AND NHM011

Northam bondholders are advised of the following interest payments due on Monday, 24 February 2020:


Northam bondholders are advised of the following interest payments due on Monday, 24 February 2020:

Bond Code: NHM010
ISIN No: ZAG000159229
Coupon: 9.20%
Interest Period: 25 November 2019 to 23 February 2020
Interest Amount Due: R1 146 849.32
Payment Date: 24 February 2020
Date Convention: Following Business Day
 
Bond Code: NHM011
ISIN No: ZAG000159237
Coupon: 10.55%
Interest Period: 25 November 2019 to 23 February 2020
Interest Amount Due: R13 151 369.86
Payment Date: 24 February 2020
Date Convention: Following Business Day

Johannesburg
19 February 2020

Debt Sponsor
One Capital

Interest payment notification – NHM014

Northam bondholders are advised of the following interest payment due on Thursday, 20 February 2020:


Northam bondholders are advised of the following interest payment due on Thursday, 20 February 2020:

Bond Code: NHM014
ISIN No: ZAG000163650
Coupon: 9.30%
Interest Period: 20 November 2019 to 19 February 2020
Interest Amount Due: R31 645 479.45
Payment Date: 20 February 2020
Date Convention: Following Business Day

Johannesburg
17 February 2020

Debt Sponsor
One Capital