Announcements 2019

Purchase of Zambezi Platinum (RF) Limited (“Zambezi Platinum”) preference shares (“preference shares”)

In terms of the Northam broad-based black economic empowerment transaction implemented on 18 May 2015, Zambezi Platinum holds ordinary shares in Northam.  Pursuant to the preference share terms, Zambezi Platinum is entitled to elect to settle the preference share redemption amount in cash, Northam ordinary shares or a combination thereof.

Accordingly, in compliance with paragraphs 3.63 to 3.70 of the JSE Limited Listings Requirements (“Listings Requirements”), Northam advises its shareholders of the following dealings by associates of a director of a major subsidiary of the company and Zambezi Platinum:

Johannesburg
1 October 2019

Sponsor and Debt Sponsor
One Capital

Northam bondholders are advised of the following interest payment due on Friday, 13 September 2019:

Johannesburg
10 September 2019

Debt Sponsor
One Capital

Johannesburg, Monday 09 September 2019.  Northam is pleased to advise that it has completed a private placement of domestic medium term notes to the value of R500 million under Northam’s R5 billion Domestic Medium Term Note Programme. The New Notes will be issued today on the Interest Rate Market of the JSE Limited and will mature over one year from the date of issue. The New Notes will attract a floating rate coupon of 2.40% per annum above a three-month ZAR-JIBAR and interest will be payable quarterly.

Following the placement of the New Notes, the total notional value of Notes in issue under the Programme will amount to R2,325 billion.  

Johannesburg
9 September 2019

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

Edith Leeson +27 79 527 6882

ACQUISITION OF R293 MILLION OF ZAMBEZI PREFERENCE SHARES

1. INTRODUCTION

   Northam shareholders (“shareholders”) are referred to the announcement dated 30 August 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, Northam has reached an agreement to acquire additional Zambezi preference shares, as detailed in paragraph 3 below (“acquisition”). Following the acquisition, Northam will hold 23 388 840 Zambezi preference shares, representing approximately 14.6% of all Zambezi preference shares in issue.

2. RATIONALE FOR THE ACQUISITION

   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 elect to 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.

3. SMALL RELATED PARTY TRANSACTION

   Northam has reached agreement with Coronation Asset Management Proprietary Limited, acting as an investment manager on behalf of its clients (“Coronation”), pursuant to which Northam will acquire Coronation’s entire remaining shareholding of Zambezi preference shares, being 3 980 382 Zambezi preference shares, at a price of R73.50 per Zambezi preference share, for a total cash consideration of approximately R292.6 million. The acquisition will be funded from Northam’s cash reserves.

   The acquisition will be implemented on 30 September 2019, provided Northam obtains a fairness opinion confirming that the transaction is fair to shareholders, as further detailed below. 

   Coronation is a material shareholder of Northam, in that it is able to exercise voting control, on behalf of its clients, in excess of 10% of all Northam shares in issue. Accordingly, Coronation is a related party to Northam as contemplated in paragraph 10.1(b)(i) of the JSE Limited Listings Requirements (“Listings Requirements”) and the acquisition is categorised as a “small related party transaction” in terms of paragraph 10.7 of the Listings Requirements.
   
   The acquisition is not subject to shareholder approval, provided an independent professional expert confirms that the terms of the acquisition are fair to shareholders (“fairness opinion”). Further information regarding the fairness opinion will be published on SENS in due course.

4. DETAILS OF THE ZAMBEZI PREFERENCE SHARES

   The Zambezi preference shares are cumulative, non-participating redeemable preference shares which accrue dividends at a nominal rate equal to the South African prime interest rate plus 3.5%, calculated on a daily basis, based on a 365-day year, compounded annually. The Zambezi preference shares were listed on the securities exchange operated by the JSE Limited on 11 May 2015.

   Subject to certain exceptions, the Zambezi preference shares are redeemable on 17 May 2025 and will be redeemed, at Zambezi’s election, in cash and / or through the distribution of Northam shares held by Zambezi. The redemption of the Zambezi preference shares is secured through a guarantee provided by Northam in favour of the holders of Zambezi preference shares. If the guarantee is exercised, Northam will, at its election, settle the associated liability using cash and / or through the issue of new Northam shares.
   As reported in the annual financial statements of Northam for the year ended 30 June 2019, the Zambezi preference share liability amounted to approximately R10.8 billion and the accumulated preference share dividends for the period amounted to approximately R1.3 billion. The acquisition by Northam of Zambezi preference shares will reduce the Zambezi preference share liability and accumulated preference share dividends recognised in Northam’s consolidated financial statements. The accounting policies adopted by Northam in the preparation of its annual financial statements are in accordance with the International Financial Reporting Standards.

   Johannesburg
   2 September 2019

   Corporate Advisor, Sponsor and Debt Sponsor to Northam
   One Capital

   Attorneys to Northam
   Cliffe Dekker Hofmeyr Inc.

1. Introduction

Northam shareholders (“shareholders”) are referred to the announcement dated 6 August 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, Northam has reached an agreement to acquire additional Zambezi preference shares, as detailed in paragraph 3 below (“acquisition”). Following the acquisition, Northam will hold 19 408 458 Zambezi preference shares, representing approximately 12.1% of all Zambezi preference shares in issue.

2. Rationale for the acquisition

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 elect to 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.

3. Small related party transaction and fairness opinion

Northam has reached agreement with the Public Investment Corporation SOC Limited (“PIC”), pursuant to which Northam will acquire 13 700 000 Zambezi preference shares from the PIC today (Friday, 30 August 2019) at a price of R73.50 per Zambezi preference share, for a total cash consideration of approximately R1.007 billion .

The acquisition is not subject to any conditions precedent and will be funded from Northam’s cash reserves.

The PIC is a material shareholder of Northam, in that within the preceding 12 months, it has been able to exercise voting control in excess of 10% of all Northam shares in issue. Accordingly, the PIC is a related party to Northam as contemplated in paragraph 10.1(b)(i) of the JSE Limited Listings Requirements (“Listings Requirements”) and the acquisition is categorised as a “small related party transaction” in terms of paragraph 10.7 of the Listings Requirements.

The acquisition is not subject to shareholder approval, provided an independent professional expert confirms that the terms of the acquisition are fair to shareholders. Northam has appointed BDO Corporate Finance Proprietary Limited (“BDO”) as the independent expert for purposes of providing an opinion in respect of the fairness of the acquisition (“fairness opinion”).

BDO has considered the terms and conditions of the acquisition and is of the opinion that the acquisition is fair to shareholders. A copy of the fairness opinion is available for inspection for a period of 28 days from the date of this announcement, at Northam’s registered office being, Building 4, 1st Floor, Maxwell Office Park, Magwa Crescent West, Waterfall City, Jukskei View.

4. Details of the Zambezi preference shares

The Zambezi preference shares are cumulative, non-participating redeemable preference shares which accrue dividends at a nominal rate equal to the South African prime interest rate plus 3.5%, calculated on a daily basis, based on a 365-day year, compounded annually. The Zambezi preference shares were listed on the securities exchange operated by the JSE Limited on 11 May 2015.

Subject to certain exceptions, the Zambezi preference shares are redeemable on 17 May 2025 and will be redeemed, at Zambezi’s election, in cash and / or through the distribution of Northam shares held by Zambezi. The redemption of the Zambezi preference shares is secured through a guarantee provided by Northam in favour of the holders of Zambezi preference shares. If the guarantee is exercised, Northam will, at its election, settle the associated liability using cash and / or through the issue of new Northam shares.
As reported in the annual financial statements of Northam for the year ended 30 June 2019, the Zambezi preference share liability amounted to approximately R10.8 billion and the accumulated preference share dividends for the period amounted to approximately R1.3 billion. The acquisition by Northam of Zambezi preference shares will reduce the Zambezi preference share liability and accumulated preference share dividends recognised in Northam’s consolidated financial statements. The accounting policies adopted by Northam in the preparation of its annual financial statements are in accordance with the International Financial Reporting Standards.

Corporate Advisor, Sponsor and Debt Sponsor to Northam
One Capital

Independent Expert to Northam
BDO Corporate Finance Proprietary Limited

Attorneys to Northam
Cliffe Dekker Hofmeyr Inc.

Key features:

• Record operating profit of R2.4 billion
• Record production from own operations of 519 954 oz 4E
• Normalised headline earnings of 270.1 cents per share, up 226.6%
• Execution of growth strategy remains firmly in place, with R2.6 billion spent on its execution during the period under review
• Net debt of R3 billion
• Commendable safety performance LTIIR of 0.93

Financial results

Northam achieved a record operating profit of R2.4 billion for the financial year ended 30 June 2019 (F2018: R823.3 million), representing a 192.7% increase from the previous corresponding period, underpinned by a solid operating performance at both operations, well contained unit cash costs and a higher basket price received. This translates to an operating profit margin of 22.6% (F2018: 10.9%).

The group achieved a record production from own operations amounting to 519 954 oz 4E (F2018: 483 941 oz 4E), representing a 7.4% increase from the previous corresponding period, with increased contributions from both Booysendal and Zondereinde. Group chrome concentrate production increased by 17.6% to 764 528 tonnes on the back of growth at Booysendal and Zondereinde, as well as first production from Eland (F2018: 650 091 tonnes).

The total comprehensive income for the period was R71.4 million (F2018: loss of R705.4 million). Included in the income for the period is the impact of the black economic empowerment ("BEE") transaction relating to the Zambezi Platinum (RF) Limited preference shares, which are consolidated into the group results and accrued a cumulative variable dividend (accrued dividends) amounting to R1.3 billion (F2018: R1.1 billion). This negatively impacted the consolidated group results for the period under review. Shareholders are reminded that this is a non-cash item.

Normalised headline earnings per share for the period were 226.6% higher at 270.1 cents (F2018: 82.7 cents) per share. Normalised headline earnings, which is Northam's main measure of performance, has been calculated taking into account the headline earnings/loss per share adjusted for non-cash items relating to the BEE transaction. These include the preference share dividends associated with the BEE transaction, as detailed above.

Total group capital expenditure reduced year on year to R2.9 billion as major project milestones were completed. R2.6 billion was spent on expansionary capex and R221.8 million on sustaining capex.

Despite the difficult economic circumstances prevailing during the period under review, both of Northam's mining operations posted an operating profit. Zondereinde achieved an operating profit of R1.3 billion (F2018: R355.4 million) and Booysendal achieved an operating profit of R985.7 million (F2018: R525.4 million).

The group continues to deliver on its strategy of developing low-cost, long-life assets in order to position itself at the lower end of the industry cost curve.

Highlights

Dividends

Given the company's current capital structure, project commitments and economic operating environment, the Northam board of directors (the "board") are of the view that the most efficient way to return value to investors precludes the payment of a cash dividend. The board has therefore resolved not to declare a dividend for the financial year ended 30 June 2019 (F2018: R Nil).

NOTICE OF ANNUAL GENERAL MEETING

The annual general meeting ("AGM") of Northam shareholders ("shareholders") will be held at Northam, Building 4, 1st Floor, Maxwell Office Park, Magwa Crescent West, Waterfall City, Jukskei View, Midrand, South Africa on Thursday, 7 November 2019 at 12:00 to transact the business as stated in the notice of AGM and abridged annual report 2019 ("notice and abridged annual report 2019").

Shareholders are advised that the notice and abridged annual report 2019, containing the condensed audited financial statements for the year ended 30 June 2019, will be distributed to all shareholders by no later than Friday, 30 August 2019.

The annual integrated report 2019, the complete consolidated audited annual financial statements which incorporates the external auditors' report in which Ernst & Young Inc. expressed an unmodified audit opinion and the notice and abridged annual report 2019 are available on the following link:
https://www.northam.co.za/investors-and-media/publications/annual-reports or can be obtained from the company's registered office on request.

The salient dates for the AGM are as follows:

* Any forms of proxy not lodged by this date and time must be delivered to the chairperson of the AGM before the appointed proxy may exercise any rights of the shareholder at the AGM.

This short-form announcement is the responsibility of the directors and is only a summary of the information in the full announcement and does not contain full or complete details.

Any investment decision should be based on the full results announcement accessible via the JSE link at https://senspdf.jse.co.za/documents/2019/JSE/ISSE/NHM/AFS_2019.pdf and the full audited annual financial statements available on our website at https://www.northam.co.za/investors-and-media/publications/annual-reports

The full results announcement and the full audited annual financial statements, incorporating the Ernst & Young Inc. auditors' report, are also available at our registered office and at the office of our sponsor for inspection, at no charge, during office hours.

On behalf of the board at Johannesburg on 20 August 2019.

* British

Registered office
Building 4, 1st Floor,
Maxwell Office Park
Magwa Crescent West
Waterfall City
Jukskei View, 2090
South Africa

PO Box 412694
Craighall, 2024
South Africa

Telephone +27 11 759 6000
www.northam.co.za

Company secretary
PB Beale
Building 4, 1st Floor,
Maxwell Office Park
Magwa Crescent West
Waterfall City
Jukskei View, 2090
South Africa

PO Box 412694
Craighall, 2024
South Africa

e-mail: trish.beale@norplats.co.za

Transfer secretaries
Computershare Investor Services Proprietary Limited
Rosebank Towers
15 Biermann Avenue
Rosebank, 2196
South Africa

PO Box 61051
Marshalltown, 2017
South Africa

Sponsor and debt sponsor
One Capital
17 Fricker Road
Illovo, 2196
Johannesburg
South Africa

PO Box 784573
Sandton, 2146
South Africa

Johannesburg
23 August 2019

Northam bondholders are advised of the following interest payments due on Monday, 26 August 2019:

Johannesburg
21 August 2019

Debt Sponsor
One Capital

1. Introduction

Northam shareholders (“shareholders”) are referred to the announcement dated 1 November 2016 (“previous announcement”) pertaining to the acquisition by Northam of 4 043 018 preference shares in Zambezi Platinum (RF) Limited (“Zambezi”), (“Zambezi preference shares”) for a purchase consideration equal to the issue price plus accumulated preference share dividends (“face value”).

Northam is pleased to announce that, since the date of the previous announcement, Northam has acquired additional Zambezi preference shares and has reached agreement to acquire further Zambezi preference shares, as detailed in paragraph 3 below. As a result of these acquisitions, Northam will hold 5 708 458 Zambezi preference shares (“Northam owned prefs”), representing approximately 3.6% of all Zambezi preference shares in issue. The face value of the Northam owned prefs, calculated as at 6 August 2019, amounts to approximately R403.5 million.

All the Northam owned prefs have been purchased at, or below, face value (as calculated on the date of acquisition).

2. Rationale for the acquisition of Zambezi preference shares

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 elect to 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.

3. Small related party transaction and fairness opinion

Northam has reached agreement with Coronation Asset Management Proprietary Limited, acting as an investment manager on behalf of its clients (“Coronation”), pursuant to which Northam will acquire 341 455 Zambezi preference shares from Coronation on Tuesday, 6 August 2019, at a price of R70.69 per Zambezi preference share, representing the face value of such shares, for a total cash consideration of approximately R24.1 million (“further transaction”).

The further transaction is not subject to any conditions precedent and will be funded from Northam’s cash reserves.

Coronation is a material shareholder of Northam, in that it is able to exercise voting control, on behalf of its clients, in excess of 10% of all Northam shares in issue. Accordingly, Coronation is a related party to Northam as contemplated in paragraph 10.1(b)(i) of the JSE Limited Listings Requirements (“Listings Requirements”).

Over the course of the past 12 months, Northam has acquired Zambezi preference shares from Coronation at face value. As a result of the aggregation provision contemplated in paragraph 10.8 of the Listings Requirements, the further transaction is categorised as a “small related party transaction” in terms of paragraph 10.7 of the Listings Requirements.

The further transaction is not subject to shareholder approval, provided an independent professional expert has confirmed that the terms of the further transaction are fair to shareholders. Northam has appointed BDO Corporate Finance Proprietary Limited (“BDO”) as the independent expert for purposes of providing an opinion in respect of the fairness of the further transaction (“fairness opinion”). 

BDO has considered the terms and conditions of the further transaction and is of the opinion that the further transaction is fair to shareholders. A copy of the fairness opinion is available for inspection for a period of 28 days from the date of this announcement, at Northam’s registered office being, Building 4, 1st Floor, Maxwell Office Park, Magwa Crescent West, Waterfall City, Jukskei View.

4. Details of the Zambezi preference shares

The Zambezi preference shares are cumulative, non-participating redeemable preference shares which accrue dividends at a nominal rate equal to the South African prime interest rate plus 3.5%, calculated on a daily basis, based on a 365-day year, compounded annually. The Zambezi preference shares were listed on the securities exchange operated by the JSE Limited on 11 May 2015.

Subject to certain exceptions, the Zambezi preference shares are redeemable on 17 May 2025 and will be redeemed, at Zambezi’s election, in cash and / or through the distribution of Northam shares held by Zambezi. The redemption of the Zambezi preference shares is secured through a guarantee provided by Northam in favour of the holders of Zambezi preference shares. If the guarantee is exercised, Northam will, at its election, settle the associated liability using cash and / or through the issue of new Northam shares.

As reported in the reviewed condensed consolidated interim results of Northam for the six months ended 31 December 2018 (“Northam results”), the Zambezi preference share liability amounted to approximately R10.1 billion and the accumulated preference share dividends for the period amounted to R611.8 million. The acquisition by Northam of Zambezi preference shares will reduce the Zambezi preference share liability and accumulated preference share dividends recognised in Northam’s consolidated financial statements. The accounting policies adopted by Northam in the preparation of its consolidated financial statements, including the Northam results, are in accordance with the International Financial Reporting Standards.

Johannesburg
6 August 2019

Corporate Advisor, Sponsor and Debt Sponsor to Northam
One Capital

Independent Expert to Northam
BDO Corporate Finance Proprietary Limited

Attorneys to Northam
Cliffe Dekker Hofmeyr Inc.

Northam bondholders are advised of the following interest payments due on Tuesday, 16 July 2019:

Johannesburg
11 July 2019

Debt Sponsor
One Capital

Thumbs-up for Kukama project

Johannesburg, 26 June 2019. Northam is pleased to advise its shareholders that mining operations at the Kukama shaft situated at its Eland mine complex will recommence in the new financial year (F2020).

This significant development comes after the successful conclusion of a feasibility study for the Kukama project.

Background

Northam purchased a 100% interest in the Eland mine from Glencore Operations South Africa Proprietary Limited in February 2017 for a cash consideration of R175 million. Eland mine was placed on care and maintenance in 2015 and Northam continued to manage it as such whilst undertaking the feasibility study for the Kukama shaft.

In terms of the transaction, Northam acquired all of Eland mine’s assets which included:

• Eland’s two mining rights with a resource currently estimated at 19.3 Moz 4E at an average in situ grade of 3.95 g/t;
• surface and underground infrastructure including a concentrator with a nameplate capacity of 250 ktpm; a chrome spiral recovery plant; a tailings storage facility; two decline systems; and surface support infrastructure;
• immovable property; and
• a mining fleet in excess of 100 vehicles, which includes low profile mechanised mining equipment.

Key conclusions from the Kukama shaft feasibility study

• Steady state production of 150Koz pa 4E, at unit costs in the lower half of the industry cost curve.
• Forecast investment returns comfortably in excess of Northam’s current weighted average cost of capital.
• Forecast positive free cash flow generated from year 4 onwards.
• Creation of 2 800 permanent jobs.
• Life of mine in excess of 30 years.

Current status of Eland mine

To date, Northam has continued to manage the Eland mine on care and maintenance whilst undertaking the feasibility study for the Kukama shaft.

Whilst completing the feasibility study for Kukama shaft and following positive feedback from the study, Northam commenced early work in preparation for its recommissioning. This includes refurbishing underground fixed and mobile equipment, as well as certain sections of the concentrator. Processing of the tailings storage facility at Eland mine has also commenced, which facilitated recommissioning of the surface plant and associated infrastructure.

The next steps

Conversion of the Kukama decline shaft into a footwall array will start in F2020, along with limited early stoping. Strike development and stoping build-up is scheduled to commence in F2021. Production is forecast to reach 100Koz pa 4E by 2025 and steady state production of 150Koz pa 4E is forecast from 2029.

Capital expenditure

Total developmental capital expenditure is estimated at R2.2 billion over a five-year period, in nominal terms (F2019 terms: R1.9 billion), which includes a provision for working capital requirements during the development phase. The project will be fully funded from Northam’s own resources.

Conclusion

Northam chief executive Paul Dunne points to the positive investment return demonstrated by the Kukama project, which comfortably exceeds the company’s weighted average cost of capital. “In addition,” says Dunne, “the project further diversifies the group’s operations and production capacity and does so efficiently by utilising an extensive existing capital footprint. Kukama is a project that lends itself to scaling up or down and will form the production base for the broader Eland complex.The mining method to be implemented at Kukama is well-known and well proven.  Our focus will be on safe, quality, long-life production, whilst creating sustainable long-term employment in the platinum industry.”

Presentation

Paul Dunne and the Northam team will be presenting to members of the investment community today, Wednesday 26 June in Johannesburg on latest growth developments in the group. The presentation will be webcast at 11:00 and will be accessible on the Northam website at www.northam.co.za.

Issued by

R&A Strategic Communications, Johannesburg,
Tel +27 (0)11 880 3924;
Marion Brower +27 71 493 0387
Edith Leeson +27 79 527 6882

Northam bondholders (bondholders) are advised of the following interest payment due on Monday, 10 June 2019.

Bondholders are further advised, in accordance with the Terms and Conditions of the Northam Platinum Limited ZAR2 000 000 000 domestic Medium Term Note Programme dated 3 August 2012, of the full capital redemption of the NHM003 note effective Monday, 10 June 2019.

05 June 2018

Debt Sponsor
One Capital

The JSE Limited (“JSE”) has granted approval for the listing of NHM010 and NHM011 Senior Unsecured Floating Rate Notes, under the Northam Platinum Limited ZAR2 000 000 000 Domestic Medium Term Note Programme dated 3 August 2012 (“Programme”), as guaranteed by Booysendal Platinum Proprietary Limited, with effect from 24 May 2019.

The details pertaining to NHM010 are as follows:

The details pertaining to NHM011 are as follows:

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

Johannesburg
23 May 2019

Arranger, Dealer and Debt Sponsor
One Capital

Attorneys to Northam in respect of the Notes
Bowman Gilfillan Inc.

Johannesburg, Tuesday 7 May 2019. Northam shareholders are advised that Dr NY (Yoza) Jekwa and Mr JJ (Jean) Nel have been appointed to the company’s audit and risk committee with effect from 1 June 2019.  Both currently serve on the board as independent, non-executive directors.

Yoza Jekwa has served on the Northam board since 8 November 2017. She is also an independent non-executive director of Ascendis Health Limited. Dr Jekwa holds an MBA in Finance and an MBBCh (Bachelor of Medicine and Bachelor of Surgery). She has extensive experience in the South African corporate banking industry and has held various positions in the medical field in South Africa and the United Kingdom.

Jean Nel was appointed to the Northam board on 6 November 2018. He is a non-executive director of Mimosa Holdings (Pvt) Limited, Mimosa Investment Limited and DRDGOLD Limited. Mr Nel qualified as a chartered accountant and has more than 18 years’ experience in mining and mining finance. Mr Nel held the position of CEO for the PGM division of Sibanye-Stillwater Limited following that company’s acquisition of Aquarius Platinum Limited (Aquarius) in 2016. He was previously CEO of Aquarius.

Dr Jekwa and Mr Nel will replace Ms TE (Emily) Kgosi and Mr R (Ralph) Havenstein on the audit and risk committee.  The audit and risk committee will comprise the following members, all of whom are non-executive and independent: Ms Hester Hickey (chairman); Mr David Brown; Dr Yoza Jekwa and Mr Jean Nel.

This announcement is made in compliance with paragraph 3.59 of the JSE Listings Requirements, and follows on the recommendations of the Northam nomination committee.

The members of the board would like to express their appreciation to Emily Kgosi and Ralph Havenstein for their service to the committee. They will both continue to serve the company as independent non-executive directors.

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

The JSE Limited has granted approval for the listing of NHM008 and NHM009 Senior Unsecured Floating Rate Notes, under the Northam Platinum Limited ZAR2 000 000 000 Domestic Medium Term Note Programme dated 3 August 2012, as guaranteed by Booysendal Platinum Proprietary Limited, with effect from 26 April 2019.

The details pertaining to NHM008 are as follows:

The details pertaining to NHM009 are as follows:

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

Johannesburg
25 April 2019

Arranger, Dealer and Debt Sponsor
One Capital

Attorneys to Northam in respect of the Notes
Bowman Gilfillan Inc

The JSE Limited (“JSE”) has granted approval for the listing of NHM006 and NHM007 Senior Unsecured Floating Rate Notes, under the Northam Platinum Limited ZAR2 000 000 000 Domestic Medium Term Note Programme dated 3 August 2012 (“the Programme”), as guaranteed by Booysendal Platinum Proprietary Limited, with effect from 16 April 2019.

The details pertaining to NHM006 are as follows:

The details pertaining to NHM007 are as follows:

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

Johannesburg
15 April 2019

Arranger, Dealer and Debt Sponsor
One Capital

Attorneys to Northam in respect of the Notes
Bowman Gilfillan Inc.

Northam bondholders are advised of the following interest payment due on Monday, 11 March 2019:

11 March 2019

Debt Sponsor
One Capital

Johannesburg, Friday 22 February 2019. Northam Platinum has posted results for the first half-year of the 2019 financial year. The strategy which was launched in 2015 with the Zambezi Platinum (RF) Limited Black Economic Empowerment transaction, has for the first time unfolded in the numbers. Normalised headline earnings, the primary measure of performance, amounted to R553 million, or 108.5 cents per share, up by 192.6%.

FINANCIAL HIGHLIGHTS

• Sales revenues increased by 48.5% to R5.0 billion, mainly on the back of higher volumes
• Operating profit of R1.0 billion, an all-time record for an interim period
• Operating profit margin of 20.7%, which has more than doubled
• An 111.1% increase in EBITA to R1.1 billion
• Normalised headline earnings 192.6% higher at 108.5 cents per share
• R1.5 billion spent on capital expenditure, mainly in the execution of the group growth strategy
• Cash cost increases/Pt oz respectably contained to 5.5%

PERFORMANCE OVERVIEW

At a presentation to the investment community in Johannesburg today, Northam chief executive Paul Dunne commented: “Our growth strategy remains on track, and projects are generally ahead of schedule:

• good progress is being made at Booysendal South with the successful commissioning of the rope conveyor and the re-commissioning of the PGM circuit at the South concentrator;
• At Zondereinde, excellent progress is being made with the ore reserve development in the western extension.

“We believe that these projects will position the group favourably to benefit from a stronger price environment in the next few years.”

Both Zondereinde and Booysendal delivered solid operating performances and maintained good cost control, limiting group unit cost increases to 5.5%. The transition from contract mining to owner mining at Booysendal has proved to be the correct decision with overall improved performances at the operation.

Good progress was made with the de-stocking of excess inventory. During the period 30 000 ounces were released, resulting in significantly higher sales volumes of almost 300 000 4E ounces, and boosting sales revenues to R5.0 billion. Excess inventory currently sits at approximately 140 000 4E ounces with a market value of around R2.3 billion, using December 2018 prices.

The chrome tailings retreatment project at Booysendal South made a material contribution to the group’s total chrome concentrate, which increased by 18% to 368 000 tonnes. Chrome remains a material contributor to Northam’s revenue.

A combination of higher sales volumes (up by 41%), a 4.2% uptick in the basket price to USD1 013/4E oz, and a 5.7% weakening of the ZAR against the USD, boosted revenues by 49% to R5 billion. Costs of sales were 31% higher, lagging the increase in revenues, and resulting in an operating profit of R1.0 million, and an operating profit margin of 20.7% (2018 H1: 10.1%).

Incoming chief financial officer Alet Coetzee added, “In the current price environment, our main focus remains on cost control and growing our production base down the cost curve, and hereby creating long term value for all out stakeholders.”

Capex of R1.5 billion was spent in the execution of the groups growth strategy as project delivery was accelerated.

MARKETS

PGM demand in the autocatalyst sector is expected to increase as tighter emissions legislation is introduced in China and India. Real driving emissions (RDE) legislation will become more onerous for the car manufacturers as emission limits will need to be maintained over the lifecycle of a vehicle. This will lead to increased loadings per vehicle. Industrial demand is also expected to grow in the petrochemicals sector and support for fuel cell development has increased. On the supply side, underinvestment in the South African industry over the past decade will lead to lower production in the future.

Palladium autocat demand is expected to increase particularly in China with the introduciotn of China VI legislation. In Western Europe loadings in gasoline vehicles are expected to increase significantly owing to the strict application of RDE standards.

An increased rhodium deficit is expected as demand in the autocatalyst sector follows a similar trajectory to palladium and supplies contract. Rhodium is the most effective metal for the control of nitrogen oxides and cannot easily be substituted.

OUTLOOK FOR THE BUSINESS

“Project execution remains key to our unfolding strategy. We’ve done most of the heavy lifting from both a technical and balance sheet point of view,” said Dunne. “This gives us increased confidence in our ability to deliver our projects on time and within budget in order to take advantage of a rising PGM market.

“Our operations are performing well, and we expect to deliver a solid production performance for the full year. We’ll continue to focus on costs in order to maintain a competitive cost position on the industry cost curve. This is the only parameter on which the company can protect itself during difficult market conditions.

“De-stocking of excess inventory will continue until normal inventory levels are reached. The current rate of processing is greater than the rate of mining. The destocking campaign should be completed by mid-year and should release significant working capital.

“Zondereinde’s most recent wage negotiations in 2018 resulted in a three-year agreement and augurs well for relatively stable labour relations going forward. Booysendal will come to the end of a one-year agreement in June at which time a new wage agreement will be negotiated.”

Dunne concluded, “Our operations are performing well, our growth strategy is on track and we look forward to a good set of full year results when we report again.”

Issued by
R&A Strategic Communications
Johannesburg
Tel +27 (0)11 880 3924
Marion Brower
+27 71 493 0387
Jan Walker
+27 71 493 0429

In terms of paragraph 3.4(b) of the JSE Limited Listings Requirements, companies are required to publish a trading statement as soon as they are satisfied, with a reasonable degree of certainty, that the financial results for the current reporting period will differ by at least 20% from the financial results of the previous corresponding period.

Improvement in normalised headline earnings

The group expects normalised headline earnings, defined as the group’s headline earnings adjusted for the impact of Northam’s black economic empowerment transaction, which constitutes the group’s main measure of performance, to be in excess of R550.0 million (H1 F2018: R189.1 million), representing an increase in excess of 190%.

Improvement in loss and headline loss per share

Shareholders are advised that the loss per share for the six months ended 31 December 2018 is expected to be between 17.8 cents and 18.6 cents per share and headline loss per share is expected to be between 18.6 cents and 19.4 cents per share, compared with the loss per share of 81.1 cents and headline loss per share of 80.0 cents reported in the comparative prior period (“H1 F2018”). The aforementioned ranges expressed in percentage terms, are, in respect of the loss per share, a decrease of between 77% and 78% and, in respect of the headline loss per share, a decrease of between 76% and 77%.

The anticipated loss and headline loss per share is attributable to Zambezi Platinum (RF) Limited’s non-cash preference share dividends, which are consolidated into Northam’s results in terms of International Financial Reporting Standards.

The number of shares in issue remains unchanged at 509 781 212 (H1 F2018: 509 781 212), which the group uses to determine the normalised headline earnings per share. The weighted average number of shares in issue for the period ended 31 December 2018 also remains unchanged at 349 875 759 (H1 F2018: 349 875 759 shares), which the group uses to calculate the loss and headline loss per share.

The expected improvement in earnings is primarily driven by a 40.5% increase in 4E metal sales volumes, which is underpinned by Northam’s growth and diversification strategy. The US Dollar basket price improved by 4.2% to USD1 013 per 4E oz (H1 F2018: USD972 per 4E oz) and the average ZAR/USD exchange rate weakened 5.7% to ZAR14.19/USD (H1 F2018: ZAR13.43/USD).

The financial information contained in this announcement has not been reviewed or reported on by Northam’s auditors. The condensed reviewed interim results for the period ended 31 December 2018 are expected to be published on or about 22 February 2019.

Johannesburg
7 February 2019

Sponsor and Debt Sponsor
One Capital