Announcements 2010

Further to the announcement dated 4 November 2010 regarding the resignation of the company secretary, shareholders are advised that Mr Dawid Swanepoel has been appointed as the company secretary to Northam, with immediate effect.

Johannesburg
25 November 2010

Sponsor
Barnard Jacobs Mellet Corporate Finance (Pty) Ltd

In compliance with paragraph 3.59 of the JSE Listings Requirements, shareholders are advised that Mr Bethuel Ngwenya has tendered his resignation as company secretary of Northam with effect from 3 November 2010.

An announcement will be made once a new company secretary is appointed.

Johannesburg
4 November 2010

Sponsor
Barnard Jacobs Mellet Corporate Finance (Pty) Ltd

Notice of annual general meeting

Notice is hereby given that the annual general meeting of the company will be held in Room U2, Hackle Brook, corner of Jan Smuts Avenue and Conrad Drive, Craighall, Johannesburg on Thursday, 11 November 2010 at 10:00 in order to transact the business as stated in the notice of annual general meeting included in the Annual Report.

Shareholders are requested to note that the reference in special resolution number 2 to article 71 should, in fact, be a reference to article 72 of the company’s articles of association.

No change statement

The company published its reviewed preliminary financial results for the year ended 30 June 2010 on 20 August 2010 and distributed its Annual Report to shareholders on Friday, 15 October 2010.

No abridged version of the audited financial statements is being published as the financial information as published on 20 August 2010 is unchanged.

Johannesburg
15 October 2010

Sponsor:
Barnard Jacobs Mellet Corporate Finance Pty) Limited

The management of Northam Platinum Limited regrets to advise that the strike at its Zondereinde mine in Limpopo province continues, following the failure of the second round of mediation with the National Union of Mineworkers (NUM) at the CCMA yesterday, Tuesday 21 September 2010.

Management remains firm in its rejection of the NUM’s demands of:

• a 15% increase in basic wages
• the collapsing of a number of bands which increase the demand to 19.5%
• the increase in the living out allowance from the current R1 600 per month to R3500 per month.
• in aggregate the total cost to company equates to an increase of 32%

Northam chief executive Glyn Lewis commented today, “This is a disappointing outcome after the best efforts of the CCMA. Nevertheless, we remain available and committed to seeking a resolution to this deadlock which will serve to satisfy the best interests of the company, its employees and its shareholders”

Johannesburg, 20 August 2010. Following a year of mixed fortunes, Northam Platinum Limited (Northam, JSE: NHM) reported a solid set of results for the year ended 30 June 2010, underpinned by a creditable operating performance from its Zondereinde mine.

Key features for the year

• Sustained improvements in safety performance
• Metal in concentrate produced 6.3% higher at 9 999kg (321 475oz)
• Average basket price 2.7% higher year on year at R288 255/kg
• Unit cash costs (R/kg produced) increases held to 8.1%
• Metal sales in concentrate reach a record 395 879oz
• Sales revenues 23.8% higher at R3.9 billion
• Earnings 1.7% higher at R641 million
• Cash in hand of R1.1 billion
• Board approval for Booysendal project

Commenting on the year’s developments chief executive Glyn Lewis said today that it had been a busy year on many fronts for Northam. “It’s fair to say that the Zondereinde mine again posted a respectable operating performance, with solid production, and sales volumes reaching record levels at almost 400 000oz.”

Smelter downtime owing to an incident in the precipitator in the second half of the financial year was shortlived, and had little impact on output. Following the installation of a temporary bypass around the precipitator the smelter is back in operation while the final repairs should be completed in the second quarter of the new financial year.

“Importantly, however,” said Lewis, “we now have board approval for the Booysendal project – which promises to be more robust than the initial feasibility work suggested. We are also optimistic about the feasibility of establishing a ConRoast smelting facility in Mpumalanga province – which provides us with more smelting optionality, while also reducing our reliance on Eskom.”

Operating and financial results

Tonnages milled at the Zondereinde mine were marginally lower at 2.0 million tonnes (Mt). Improved stoping width control on the UG2 reef and minor variations in the ratios of the Merensky pothole facies mined, contributed to the improved combined mill head grade of 5.2g/t. Total on-mine production was higher at 9 999kg (321 475oz). Purchased material accounted for 2 106kg, boosting metal sales by 18.8%% to 12 313kg or 395 879oz.

Sales revenues were 23.8% higher at R3.9 billion, on the back of higher sales volumes and buoyed by a slightly higher basket price, which had appreciated by 2.7% to R288 255/kg. (Year on year the rand was 13.2% stronger against the US dollar at US$/R7.57 (F2009: R8.72)).

Increases in mining input costs, in excess of inflation, put pressure on costs and contributed to a 17.0% increase in total operating costs. This included an amount of R21 million payable from March 2010 in terms of the Minerals and Petroleum Resources Royalty Act. The 33.4% increase in the cost of sales reflects the higher operating costs as well as the significantly higher cost and volumes of concentrates purchased, valued at R735.1 million, compared to R140.2 million in the previous year. This is in line with the company’s strategy of building capacity for enhanced downstream beneficiation.

The combination, inter alia, of interest from the investment in escrow payable to Anglo Platinum Limited (Anglo Platinum), higher sundry revenue and lower tax payable resulted in group profit attributable to shareholders being largely unchanged at R641.3 million. Headline earnings increased from 172.2 cents per share to 177.8 cents.

Booysendal update

Since the completion of the Booysendal feasibility study and the subsequent optimisation exercise the board has given approval for development of the mine to proceed. The optimisation study suggests that the project could support a production rate of 187 500 tonnes per month, or 162 000 oz (3PGM+Au) per annum and that the capital requirement for this mine would be approximately R3.6 billion.

Activities planned for the early works programme, namely detailed engineering, procurement of long lead items, construction of the on-reef boxcut, off site establishment of employee recruitment, training and accommodation facilities, safe road access to site and the establishment of construction power and water facilities are progressing according to plan. Capital expenditure on the project to date is R132.4 million. The primary construction activities will start as soon as certain outstanding regulatory approvals are obtained.

Outlook

The challenges of mining the Merensky reef at Zondereinde are anticipated to persist in the year ahead. This is likely to result in lower production volumes, while unit cash operating costs will continue to rise as the effects of wage demands and the rising costs of chemicals, power and explosives continue to be felt. Group earnings will be largely determined by these costs and by the average Rand basket price received in F2011.

The management of Northam advises that underground operations resumed last night, Thursday 29 July 2010, at the company’s Zondereinde mine near Thabazimbi.

This comes after the suspension of drilling and blasting operations following an accident on the mine on Tuesday 20 July 2010.

Management estimates production losses of approximately 7 000 ounces (3PGE+Au).

Sponsor
Barnard Jacobs Mellet Corporate Finance (Pty) Ltd

Platinum companies establish basis to evaluate commercial development of a new ConRoast furnace

Jubilee Platinum plc (Jubilee) and Northam Platinum Limited (Northam) are pleased to announce that they have entered into a Memorandum of Understanding (MoU) to establish a joint venture to evaluate the construction of a new DC arc furnace facility using ConRoast technology to treat a portion of Northam’s platinum group metal (PGM) concentrate.

This follows on from the successful completion by Jubilee and Mintek of the development programme for the ConRoast smelting process, and Jubilee’s acquisition of an appropriate site with infrastructure and an independent source of power near Middelburg, in South Africa’s Mpumalanga Province, to establish such a plant.

In terms of the MoU, the joint venture will investigate the feasibility of constructing and operating a 7MVA DC arc furnace facility to treat PGM concentrate emanating from Northam’s Booysendal mine, which is currently being developed.

Commenting on the MoU, Northam Chief Executive Glyn Lewis said today that an additional furnace facility could hold significant benefits for the Northam operations and projects. “Although we remain confident that our current smelting capacity at the Zondereinde mine is adequate for our near to mid-term requirements, an additional facility, in close proximity to the eastern limb, provides us with added smelting optionality while reducing our reliance on Eskom power. This could stand us in very good stead as we turn our attention to the incremental turning to account of the Booysendal resource.”

Jubilee Chief Executive Colin Bird commented “This is a significant development in the commercialisation of the ConRoast technology, following the successful completion of the trial phase of development as advised to the market in early June this year. Northam has played a pivotal role in the research and development phase of the ConRoast technology, having provided platinum concentrate for testing campaigns at the Mintek operation.”

Note to editors

The ConRoast technology, developed and patented by Mintek (South Africa’s national mineral research organization) is licensed exclusively to Braemore Platinum Smelters SA (Pty) Ltd (a wholly owned subsidiary of Jubilee). ConRoast is a robust, clean and safe DC-arc smelting process for treating high chrome-bearing platinum concentrates from UG2 reef ore and has established itself as an environmentally friendly smelting solution for PGM containing concentrates.

Larger project than initially envisaged

The management of Northam Platinum Limited (Northam) advises that it has completed an optimisation exercise on the Booysendal feasibility study, released to the market in the fourth quarter of the 2009 calendar year. Following board approval, preparatory work is proceeding on creating access and other infrastructural installations at the company’s 100% owned Booysendal asset on the eastern limb of the Bushveld Complex, which contains a resource of more than 100 million ounces (3PGM+Au).

The purpose of the optimisation study was to determine whether further value could be extracted from the first phase of the Booysendal project. The results indicate that:

• The start-up of production could be accelerated
• That the mining layout could support a higher rate of production
• This would result in lower unit operating costs

On surface, the concentrator plant layout has been optimised to take account of the higher run of mine (ROM) production, resulting in a more efficient process flow and a smaller environmental footprint. Commenting on the results of the optimisation process, Northam chief executive Glyn Lewis said today, “The value engineering process has been a more than useful exercise, with results yielding an enhanced return on a more robust project than we had initially envisaged.”

The optimisation study included a review and update of initial capital expenditure estimates. The total project capex has increased from R3.1 billion (June 2009 money terms) to R3.6 billion (March 2010 money terms) reflecting the effects of inflationary increases on the one hand, and on the other, the firmer estimates for a larger operation. Overall, the total capex estimate is slightly more efficient per unit of designed production (both in terms of tonnes milled and production ounces per annum (3PGM+Au)) .

The acceleration of production build-up follows on the rescheduling of construction: preparatory work is currently in progress to start the establishment of the on-reef boxcut in the first half of F2011. The remainder of the work, including the reverse decline adit, bulk earthworks for the concentrator and offices, permanent access ways and pipelines, will start as soon as the environmental permitting is obtained.

Mill throughput to the plant will increase to 150 000 tonnes per month) 187 500 ROM tonnes through the DMS), an increase of 25%.

The graph below indicates the accelerated schedule for production build-up:

Stockpile build-up

Power supply and energy efficiency measures

The revised mine design and higher rate of production are, at full capacity, expected to result in electricity consumption exceeding the ESKOM approved 20MVA during peak demand periods. These requirements will be fulfilled by self-generation of power on site (5MVA) during peak demand times. This will continue until ESKOM is able to supply additional power – currently estimated to be by 2015.

The revised design also makes provision for an energy management system and the introduction of energy recovery strategies. Orepass capacity is being improved which will minimise the requirement for decline conveyors to run during peak shift times. In addition, cycle efficiencies and optimised equipment selection will maximise output in each section, and at the same time reduce the number of sections required to operate.

In summary

Funding

With capital expenditure requirements for Booysendal peaking in mid 2012, Northam remains confident that the development of the Booysendal mine can be funded from a combination of internal retentions and debt instruments. Significant progress has been made in exploring various options in this regard.

Distributed by:

Russell & Associates, Johannesburg
Tel: +27 (0)11 880 3924
Fax: +27 (0)11 880 3788

The management of the Zondereinde division of Northam Platinum Limited (Northam) advises that it has shut down the convertors at the division’s metallurgical plant following an incident this morning, Monday 17 May 2010, which caused damage to the precipitator. No one was injured in the incident.

Initial estimates by management indicate that repairs could take around six weeks to complete. Material will be stockpiled while the repairs are being effected. The interruption will have a negative effect on sales for the current financial year. The purpose of the electrostatic precipitator is to remove particulate matter from the off-gas emissions prior to being discharged into the atmosphere via the chimney stack.

Investigations into the cause of the incident have commenced. Further announcements will be made as more details become available.

Go-ahead for Booysendal early works programme

Key features

• 33% increase in sales volumes to 6 134kg (197 206oz)
• Sales revenues 8% higher at R1.7 billion
• 21% slide in rand basket price to R254 913/kg (H1 F2009: R322 814/kg)
• Earnings 42% lower at R216 million
• Initial capex approved for Booysendal
• Dividend of 20cps declared

Northam's Zondereinde mine produced a respectable performance in the half-year, with a 33% increase in sales volumes, reaching a high of 6 134kg. The higher sales though were largely negated by the 21% slide in the rand basket price to R254 913/kg.

Expanding on the effect of metal prices and currency on the company's results, Northam chief executive Glyn Lewis explained, "Year-on-year the rand was 9% stronger against the US dollar at R7.66 (H1 2009: R8.40), and exacerbated the 14% decline in the average US dollar price for the company's basket of metals at US$1 035/oz."

The higher sales volumes were largely attributable to the inclusion of 480kg of secondary material, along with 1 013kg of metals in concentrate purchased, in line with our strategy of leveraging our metallurgical infrastructure. The concentrate purchases, valued at R305 million, added significantly to the cost of sales for the half-year.

Total operating costs were 13% higher at R1 094 million, reflecting the effects of inflation on costs of labour, consumables and services. "The increase in unit cash costs however was held to 7%, or R196 273/kg, flattered by the treatment of secondary materials. Compared to the 2009 H1 period, costs associated with refining declined by 36% to R50 million, illustrating once again the cost-effectiveness of using our in-house metallurgical processing facilities post the scheduled smelter rebuild," added Lewis. The net effect was that operating profit for the period was 61% lower at R234 million.

Investment income increased by 49% owing to the inclusion of interest earned on an investment in escrow which is payable to Anglo Platinum upon the transfer to Northam of certain new order mining licences in respect of the Booysendal extension. The group's share of the earnings from the Pandora Joint Venture amounted to R5 million, whilst sundry expenditure declined from R19 million to R2 million.

Attributable profits were 42% lower year on year at R216 million, with the earnings per share lower by 47% at 60cps, reflecting the increased number of shares in issue compared with the previous comparable period.

Alluding to the dividend of 20cps declared, Lewis explained "The dividend cover should not come as a surprise; we have always indicated that we will be conserving cash in line with our expansion requirements. This level of cover may be increased further depending on economic circumstances and the company's performance."

Booysendal

Board approval has been granted for an early works programme at Booysendal, which will be launched with immediate effect. The approved capex of R340 million will be allocated to construction of roads, pipelines and infrastructural facilities ahead of mine construction, which is likely to start in July this year. Going forward, Lewis said the main issues to be addressed would be securing an approval of the Environmental Management Programme (EMP), identifying appropriate contractors, establishing a community forum and exploring funding options.

Prospects

Both production of metals in concentrate and sales volumes are expected to be lower in the second half of the year. Although there are signs that the global economic climate is improving, some uncertainty remains regarding the sustainability of the recovery. At current basket prices earnings in the second half are likely to be at similar levels to the first half.

View the Results for the half year ended 31 December 2009 (PDF - 146KB)