Announcements 2022

Unless otherwise defined herein, capitalised words and terms contained in this announcement shall bear the same meanings ascribed thereto in the announcement published by Northam Holdings on SENS on Wednesday, 9 November 2022 (“Announcement”).

1. 1. INTRODUCTION

   Northam Shareholders and RBPlat Shareholders (collectively, “Shareholders”) are referred to the Announcement in terms of which, inter alia, Northam announced its firm intention to make an offer to RBPlat Shareholders to acquire all the Offer Shares for the Offer Consideration, as well as the announcement published by Northam on SENS on Wednesday, 7 December 2022 pertaining to the extension to the posting date of the Northam Offer Circular, setting out the full terms and conditions of the Offer (“Circular”), (“Extension Announcement”).

2. 2. FURTHER EXTENSION TO THE POSTING DATE OF THE NORTHAM OFFER CIRCULAR
   1. 2.1. In terms of the Extension Announcement, Shareholders were advised that the TRP has granted an extension to the date of posting of the Circular, in terms of which the Circular would be posted by Northam Holdings by no later than Friday, 23 December 2022 (“Posting Date”).
   2. 2.2. Notwithstanding the fact that the Circular was formally approved by the JSE on Thursday, 15 December 2022, conditional on the receipt of the TRP approval, and that the TRP had not raised any concerns with the Circular, Shareholders are hereby advised that, as a result of complaints raised by Impala Platinum Holdings Limited ("Implats Complaints"), the TRP has withheld the approval of the posting of the Circular until such time as the TRP has made a determination in respect of the Implats Complaints ("TRP Determination"). The Implats Complaints relate to the Announcement in terms of which Northam's intention to make the Offer was published and the announcement published by Northam Holdings on Monday, 12 December 2022 relating to the increase to the Maximum Cash Consideration under the Offer.
   3. 2.3. The TRP has granted a further extension to the Posting Date on the basis that the Circular will be posted by Northam Holdings within 3 business days of the TRP Determination.
   4. 2.4. Further details relating to the Transaction, including the Offer, and the related salient dates and times will be published on SENS in due course.
3. 3. RESPONSIBILITY STATEMENT

   The Northam Holdings board of directors (to the extent that the information relates to the Northam Group) collectively and individually accept responsibility for the information contained in this announcement and certify that, to the best of their knowledge and belief, the information contained in this announcement relating to the Northam Group is true and this announcement does not omit anything that is likely to affect the importance of such information.

Johannesburg
22 December 2022

Corporate Advisor, Sponsor and Transaction Sponsor to Northam Holdings
One Capital

Corporate Advisor, Debt Sponsor and Transaction Sponsor to Northam Platinum
One Capital

Attorneys to Northam Holdings and Northam Platinum
Webber Wentzel

Independent Sponsor to Northam Holdings
Deloitte

Disclaimer

This announcement does not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of the securities described herein, in any jurisdiction, in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction or without an exemption from the registration or qualification requirements under the securities laws of such jurisdiction.

The distribution of this announcement in certain jurisdictions may be restricted by applicable law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe such restrictions. Foreign Shareholders who are in any doubt as to their position should consult their professional advisors.

In relation to each Member State of the European Economic Area (each, an “EEA Relevant State”), this announcement and any other material in relation to the securities described herein or therein is only directed at, and any investment or investment activity to which this announcement relates is available only as follows: (A) to any legal entity which is a qualified investor as defined under Article 2 of the Regulation (EU) 2017/1129 (the “Prospectus Regulation”) (an “EEA Qualified Investor”); (B) to fewer than 150 natural or legal persons (other than EEA Qualified Investors) in that EEA Relevant State; or (C) in any other circumstances falling within Article 1(4) of the Prospectus Regulation.

In the United Kingdom, this announcement and any other material in relation to the securities described herein or therein is only directed at, and any investment or investment activity to which this announcement relates is available only as follows: (A) to any legal entity which is a qualified investor as defined under Article 2 of the Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018, (a “UK Qualified Investor”); (B) to fewer than 150 natural or legal persons (other than UK Qualified Investors); or (C) in any other circumstances falling within Section 86 of the Financial Services and Markets Act 2000.

Notice to US investors in RBPlat

The Offer will be made to RBPlat Shareholders in the United States in compliance with the applicable US laws and regulations, including Section 14(e) and Regulation 14E under the US Securities Exchange Act of 1934 as amended (the “Exchange Act”), and the exemptions from Regulation 14E and the U.S. tender offer rules provided by Rule 14d-1(c) under the Exchange Act.

The Northam Holdings Shares being offered pursuant to the Offer have not been and will not be registered in the United States under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), or the securities laws of any state of the United States or other jurisdiction, and, subject to certain limited exceptions, may not be offered or sold, taken up, exercised, resold, renounced, transferred, delivered or distributed, directly or indirectly, in or into the United States absent of registration under the U.S. Securities Act and in compliance with any applicable state securities laws, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. The financial information included in this announcement has been prepared in accordance with foreign accounting standards that may not be comparable to the financial statements of United States companies.

It may be difficult for US holders of RBPlat Shares to effect service of process within the United States and to enforce their rights and any claim arising out of the US federal securities laws against RBPlat and/or Northam Holdings, since RBPlat and Northam Holdings are located in a non-US jurisdiction, and some or all of their officers and directors may be residents of a non-US jurisdiction. US holders of RBPlat Shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court’s judgement.

Neither the Securities and Exchange Commission nor any securities commission of any state of the United States has approved the Offer, passed upon the fairness of the Offer or passed upon the adequacy or accuracy of this announcement. Any representation to the contrary is a criminal offence in the United States.

RBPlat Shareholders in the United States should note that the Northam Holdings Shares are securities in a South African company, and the Offer is subject to South African procedural and disclosure requirements, rules and practices which are different from those of the United States and are proposed to be implemented by way of the Offer. You should be aware that Northam Holdings and its affiliates or brokers may purchase shares in RBPlat otherwise than under the Offer, such as in open market or privately negotiated purchases, to the extent permitted by, and in compliance with, Rule 14e-5 under the Exchange Act and in accordance with South African law. Information about any such purchases or arrangements to purchase that is made public in accordance with South African law and practice will be available to all investors (including in the United States) via announcements on SENS

Unless otherwise defined herein, capitalised words and terms contained in this announcement shall bear the same meanings ascribed thereto in the firm intention announcement published by Northam Holdings on SENS on Wednesday, 9 November 2022 (“Announcement”).

1. INTRODUCTION

   Northam Shareholders and RBPlat Shareholders (collectively, “Shareholders”) are referred to the Announcement in terms of which Northam announced its firm intention to make an offer to RBPlat Shareholders to acquire all the Offer Shares for the Offer Consideration.

2. INCREASE TO THE MAXIMUM CASH CONSIDERATION IN RELATION TO THE OFFER
   1. As stated in the Announcement, Northam is entitled to, in its sole discretion, inter alia, increase the Cash Consideration in relation to the Offer (thereby increasing the Maximum Cash Consideration) from time to time, in which event the Share Consideration will be decreased by an equal amount such that the total Offer Consideration remains the same.
   2. Shareholders are hereby advised that Northam has increased the Maximum Cash Consideration by an amount of R7 billion, such that the Maximum Cash Consideration has increased to R17 billion (“Increased Maximum Cash Consideration”). The Share Consideration has consequently been decreased by an equal amount, such that the total Offer Consideration, representing R172.70 as at 8 November 2022, remains the same.

Unless otherwise defined herein, capitalised words and terms contained in this announcement shall bear the same meanings ascribed thereto in the announcements published by Northam Holdings on SENS on Wednesday, 9 November 2022 (“Announcement”).

1. INTRODUCTION

   Northam Shareholders and RBPlat Shareholders (collectively, “Shareholders”) are referred to the Announcement in terms of which, inter alia, Northam announced its firm intention to make an offer to RBPlat Shareholders to acquire all the Offer Shares for the Offer Consideration.

2. EXTENSION TO THE POSTING DATE OF THE NORTHAM OFFER CIRCULAR
   1. In terms of the Announcement, Shareholders were advised, inter alia, that the Northam Offer Circular setting out the full terms and conditions of the Offer (“Circular”), would be issued by Northam Holdings within 20 business days of the date of publication of the Announcement, being on or about Wednesday, 7 December 2022 (“Posting Date”), or such later date as may be approved by the TRP.
   2. Shareholders are hereby advised that the TRP has granted an extension to the Posting Date, in terms of which the Circular will be posted by Northam Holdings by no later than Friday, 23 December 2022.
   3. Further details relating to the Transaction, including the Offer, and the related salient dates and times will be published on SENS in due course.
3. RESPONSIBILITY STATEMENT

   The Northam Holdings board of directors (to the extent that the information relates to the Northam Group) collectively and individually accept responsibility for the information contained in this announcement and certify that, to the best of their knowledge and belief, the information contained in this announcement relating to the Northam Group is true and this announcement does not omit anything that is likely to affect the importance of such information.

Johannesburg
7 December 2022

Corporate Advisor, Sponsor and Transaction Sponsor to Northam Holdings
One Capital

Corporate Advisor, Debt Sponsor and Transaction Sponsor to Northam Platinum
One Capital

Attorneys to Northam Holdings and Northam Platinum
Webber Wentzel

Independent Sponsor to Northam Holdings
Deloitte

Unless otherwise defined herein, capitalised words and terms contained in this announcement shall bear the same meanings ascribed thereto in the announcement published by Northam Holdings on SENS on Wednesday, 9 November 2022 (“Announcement”).

1. INTRODUCTION

Northam Shareholders and RBPlat Shareholders (collectively, “Shareholders”) are referred to the Announcement in terms of which Northam announced its firm intention to make a voluntary offer to RBPlat Shareholders to acquire all the Offer Shares for the Offer Consideration.

2. UPDATE REGARDING THE TRANSACTION

As stated in the Announcement, implementation of the Offer and the Additional Acquisitions is conditional upon the fulfilment or waiver of certain conditions precedent, including obtaining, to the extent required, the written unconditional consent or waiver (or subject to such conditions as may be reasonably acceptable to Northam Holdings), from the relevant counterparties to any material contracts to which the Northam Group is a party, in relation to the Offer and the Additional Acquisitions or their implementation, as further set out in paragraphs 4.1.8.1.4 and 4.2.2.3 of the Announcement, respectively (“Material Contract Conditions”).

Shareholders are advised that Northam Holdings hereby waives the Material Contract Conditions and that the implementation of the Offer and the Additional Acquisitions is no longer subject to the Material Contract Conditions.

Implementation of the Offer and the Additional Acquisitions remains subject to the fulfilment or waiver of the remaining Offer Conditions and Additional Acquisition Conditions, respectively. An announcement will be published on SENS in due course wherein Shareholders will be provided with further details relating to the Transaction, including the Offer, the General Meeting and the related salient dates and times.

3. RESPONSIBILITY STATEMENT

The Northam Holdings board of directors (to the extent that the information relates to the Northam Group) collectively and individually accept responsibility for the information contained in this announcement and certify that, to the best of their knowledge and belief, the information contained in this announcement relating to the Northam Group is true and this announcement does not omit anything that is likely to affect the importance of such information.

Johannesburg
18 November 2022

Corporate Advisor, Sponsor and Transaction Sponsor to Northam Holdings:
One Capital

Corporate Advisor, Debt Sponsor and Transaction Sponsor to Northam Platinum:
One Capital

Attorneys to Northam Holdings and Northam Platinum
Webber Wentzel

Disclaimer

This announcement does not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of the securities described herein, in any jurisdiction, in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction or without an exemption from the registration or qualification requirements under the securities laws of such jurisdiction.

The distribution of this announcement in certain jurisdictions may be restricted by applicable law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe such restrictions. Foreign Shareholders who are in any doubt as to their position should consult their professional advisors.

In relation to each Member State of the European Economic Area (each, an “EEA Relevant State”), this announcement and any other material in relation to the securities described herein or therein is only directed at, and any investment or investment activity to which this announcement relates is available only as follows: (A) to any legal entity which is a qualified investor as defined under Article 2 of the Regulation (EU) 2017/1129 (the “Prospectus Regulation”) (an “EEA Qualified Investor”); (B) to fewer than 150 natural or legal persons (other than EEA Qualified Investors) in that EEA Relevant State; or (C) in any other circumstances falling within Article 1(4) of the Prospectus Regulation.

In the United Kingdom, this announcement and any other material in relation to the securities described herein or therein is only directed at, and any investment or investment activity to which this announcement relates is available only as follows: (A) to any legal entity which is a qualified investor as defined under Article 2 of the Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018, (a “UK Qualified Investor”); (B) to fewer than 150 natural or legal persons (other than UK Qualified Investors); or (C) in any other circumstances falling within Section 86 of the Financial Services and Markets Act 2000.

Notice to US investors in RBPlat

The Offer will be made to RBPlat Shareholders in the United States in compliance with the applicable US laws and regulations, including Section 14(e) and Regulation 14E under the US Securities Exchange Act of 1934 as amended (the “Exchange Act”), and the exemptions from Regulation 14E and the U.S. tender offer rules provided by Rule 14d-1(c) under the Exchange Act.

The Northam Holdings Shares being offered pursuant to the Offer have not been and will not be registered in the United States under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), or the securities laws of any state of the United States or other jurisdiction, and, subject to certain limited exceptions, may not be offered or sold, taken up, exercised, resold, renounced, transferred, delivered or distributed, directly or indirectly, in or into the United States absent of registration under the U.S. Securities Act and in compliance with any applicable state securities laws, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. The financial information included in this announcement has been prepared in accordance with foreign accounting standards that may not be comparable to the financial statements of United States companies.

It may be difficult for US holders of RBPlat Shares to effect service of process within the United States and to enforce their rights and any claim arising out of the US federal securities laws against RBPlat and/or Northam Holdings, since RBPlat and Northam Holdings are located in a non-US jurisdiction, and some or all of their officers and directors may be residents of a non-US jurisdiction. US holders of RBPlat Shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court’s judgement.

Neither the Securities and Exchange Commission nor any securities commission of any state of the United States has approved the Offer, passed upon the fairness of the Offer or passed upon the adequacy or accuracy of this announcement. Any representation to the contrary is a criminal offence in the United States.

RBPlat Shareholders in the United States should note that the Northam Holdings Shares are securities in a South African company, and the Offer is subject to South African procedural and disclosure requirements, rules and practices which are different from those of the United States and are proposed to be implemented by way of the Offer. You should be aware that Northam Holdings and its affiliates or brokers may purchase shares in RBPlat otherwise than under the Offer, such as in open market or privately negotiated purchases, to the extent permitted by, and in compliance with, Rule 14e- 5 under the Exchange Act and in accordance with South African law. Information about any such purchases or arrangements to purchase that is made public in accordance with South African law and practice will be available to all investors (including in the United States) via announcements on SENS.

• An offer to acquire all or a portion of the remaining RBPlat shares for R172.70 per RBPlat share
• This is equivalent to the R180.50 paid to Royal Bafokeng Holdings in November 2021, less dividends subsequently declared by RBPlat
• It represents an approximate 15% premium to the Implats offer value on 8 November 2022  
• The offer consideration will be fully settled in cash, or a combination of cash and Northam holdings shares by way of a cash ratchet mechanism, subject to the level of acceptance of the offer
• The minimum cash consideration per RBPlat share amounts to R54.40, assuming full acceptance of the offer, which will ratchet up to R152.42 if Implats does not accept the offer (based on its current shareholding in RBPlat) and a maximum of R172.70, being the full offer consideration, depending on the level of acceptance of the offer
• The offer is underpinned by compelling rationale for all stakeholders of both Northam and RBPlat, including shareholders and employees, together with host and affected communities
• Should Northam acquire a majority shareholding in RBPlat, RBPlat employees together with host and affected communities will participate in Northam’s approved extended broad-based black economic empowerment transaction

Northam Platinum Holdings Limited has announced its firm intention to make an offer to acquire the remaining shares in RBPlat which it does not already own. Northam currently holds 34.52% in RBPlat, and together with call options and a right of first refusal secured with the Royal Bafokeng Holdings group (RBH), may increase its shareholding in RBPlat to 37.80%.

The offer price amounts to R172.70 and is equivalent to the R180.50 purchase price paid to RBH in November 2021, adjusted for the dividends subsequently declared by RBPlat in March 2022 (R5.35) and August 2022 (R2.45). The offer is priced at an approximate 15% premium to the value of Implats’ offer on 8 November 2022.

The offer consideration will be fully settled in cash, or a combination of cash and Northam Holdings shares depending on the level of acceptance of the offer by way of a cash ratchet mechanism. As at the date of the announcement, Northam has committed R10 billion for the cash consideration and has reserved the right to increase this amount. Based on the R10 billion upfront cash commitment, if RBPlat shareholders collectively holding less than 19.9% of the RBPlat shares in issue accept the offer, the offer consideration will be fully cash settled. If RBPlat shareholders holding more than 19.9% accept the offer, the cash consideration will ratchet down and the balance of the offer consideration will be settled in Northam Holdings shares. If all RBPlat shareholders accept the offer, the minimum cash consideration per RBPlat share will amount to R54.40 and the balance of the offer consideration amounting to R118.30 per RBPlat share will be settled in Northam Holdings shares. If all RBPlat shareholders other than Implats accept the offer, the cash consideration will ratchet up to R152.42 per RBPlat share, based on Implats’ shareholding in RBPlat of 40.71% as per the Implats announcement on 4 November 2022, and the balance of the offer consideration amounting to R20.28 per RBPlat share will be settled in Northam Holdings shares.

For purposes of determining the number of Northam Holdings shares to be issued to settle the share consideration per RBPlat share, Northam Holdings shares will be priced at R187.89 per share, representing Northam’s 3 day volume weighted average price as at close of market on 8 November 2022.

The offer is supported by strong rationale for all stakeholders of both Northam and RBPlat, including shareholders, employees and host and affected communities.

For RBPlat shareholders, the offer presents an opportunity to realise the value of their investment in RBPlat at a significant premium, underpinned by a compelling cash component. In addition, RBPlat shareholders that receive Northam Holdings shares as part of the offer consideration (unless the offer consideration is fully cash settled) will diversify their investment across the Northam Group, whilst retaining indirect investment exposure to RBPlat (through Northam) and will participate in growth initiatives at Northam, as well as at RBPlat should Northam acquire a controlling interest in RBPlat.

For Northam shareholders, the transaction is aligned with the group’s long-term growth strategy and presents a unique opportunity to benefit from the inherent value and growth opportunities embedded within RBPlat’s attractive asset base. RBPlat generates strong cash flows from two established and well capitalised mines that access scarce, shallow, high-quality, platinum group metals (PGM) mineral resources contained within both the Merensky and UG2 orebodies. These orebodies are well understood and have premium loadings of those PGMs, particularly platinum and rhodium, essential to the global clean-air imperative as well as the burgeoning hydrogen economy. Should Northam acquire a controlling interest in RBPlat, the combination of Northam’s experience and technical expertise, together with the inherent qualities and scale of RBPlat’s resource base and infrastructure, will enable the combined group to unlock significant additional value for all stakeholders. In addition, the transaction will further reduce Northam’s overall risk through operational, geographical and metal contribution diversification which is an often under-appreciated consideration in mining and which has been a key element of Northam’s growth strategy since 2015.  

Large, shallow, high-quality PGM orebodies, such as those of RBPlat, are scarce. Furthermore, the PGM industry has been under-capitalised for more than a decade, and this is expected to negatively impact primary PGM supply. The rationale for Northam’s investment in RBPlat has been driven by a firm belief in the continued global importance of PGMs which, together with constrained supply, should support metal pricing and resource valuations well into the future. The prevailing commodity cycle favours the acquisition of producing, cash generative and sustainable assets with growth potential, as opposed to the capital-intensive development of long-dated production.

Northam has identified various initiatives for both unlocking value and creating additional value at RBPlat’s existing mines (BRPM and Styldrift), as well as at the currently undeveloped Styldrift II. It intends to pursue these initiatives if it obtains a controlling interest in RBPlat. Northam’s experience and expertise at its Booysendal mining complex, together with the innovative mode of development of the 3 shaft project at its Zondereinde mine, bodes well for modular development and growth initiatives at Styldrift II.

Northam further believes that there is a good cultural fit between its current operations and those of RBPlat. This will harmonise the management, and consequently the performance, of the combined group’s assets, should Northam acquire a controlling interest in RBPlat.

Northam is supportive of an extension to the existing royalty arrangements with Implats in respect of the two Implats shafts (6 and 20) operating on the RBPlat mining area, on commercially reasonable terms, should Implats request an extension. Northam believes that this arrangement will strengthen regional job preservation and stability and will be a beneficial outcome for all affected parties.

In the event that Northam obtains a controlling interest in RBPlat, RBPlat’s employees, together with host and affected communities, will be granted significant participation in Northam’s 15-year extended broad-based black economic empowerment transaction which received overwhelming support from Northam shareholders in 2021.

The offer is conditional upon Northam obtaining a 50% + 1 shareholding in RBPlat, excluding treasury shares, but including Northam’s existing RBPlat shareholding, call option shares and any other RBPlat shares acquired by Northam outside of the offer. Northam has, however, reserved the right to waive this condition. Other conditions to the offer include obtaining the requisite approval from Northam’s shareholders and the necessary authorities.

Paul Dunne, Northam’s chief executive officer, said “the offer is aligned with Northam’s growth strategy and presents a unique opportunity to acquire a controlling interest in a scarce, high-quality ore body with established and well capitalised infrastructure. We are confident in the rationale for all stakeholders in Northam and RBPlat, as well as the value unlock and value creation opportunities underpinned by the inherent value and growth potential embedded within RBPlat’s attractive asset base. Since acquiring our initial shareholding in RBPlat, our balance sheet, liquidity position and credit outlook have strengthened significantly, enabling Northam to present an offer construct to RBPlat shareholders with a compelling cash consideration and an attractive premium, whilst limiting the number of Northam shares to be issued.”

UPGRADE TO NORTHAM PLATINUM’S CREDIT RATING

Northam Holdings and Northam Platinum are pleased to advise that the credit rating agency, Global Credit Rating Company

Limited (“GCR”), has upgraded Northam Platinum’s national scale long-term credit rating to A+(za) from A(za), with the short-term credit rating re-affirmed at A1(za) and the outlook accorded as Stable.
The upgrade of Northam Platinum’s rating is in view of Northam Platinum’s enhanced liquidity position with significant financial flexibility, along with the expectation that the Group will continue to deliver a strong operating performance in various price scenarios. GCR notes that Northam Platinum continues to sustain high profitability levels, stemming from its ongoing ramp-up in production and its high-quality, competitive cost assets.

The GCR announcement in regard to Northam’s credit rating is available from the GCR website at: https://gcrratings.com/category/announcements/.

INCREASE IN AVAILABLE BANKING FACILITIES

Northam is pleased to announce that it has concluded agreements in terms of which its five-year R4 billion revolving credit facility (“RCF”) maturing in September 2024 (“Previous RCF”), has been refinanced and increased on more favourable terms. The new five-year R5.705 billion RCF (“New RCF”) will mature in August 2027 and has a nominal interest rate of between JIBAR plus 2.40% (at the lower end of utilisation) and JIBAR plus 2.80% (at the upper end of utilisation). This compares favourably to the nominal interest rate in respect of the Previous RCF of between JIBAR plus 2.55% (at the lower end of utilisation) and JIBAR plus 2.95% (at the upper end of utilisation).

In addition, Northam has settled its R3 billion bridge facility which had a final maturity date in December 2022 and has secured a new five-year term loan facility of R2.445 billion (“Term Loan”), maturing in August 2027 with a nominal interest rate of three-month JIBAR plus 2.50%.

The New RCF together with the Term Loan (collectively, the “Facilities”) and Northam’s existing R1 billion general banking facilities, increase Northam’s available banking facilities to R9.15 billion, on more favourable terms.

SETTLEMENT OF ALL OUTSTANDING AMOUNTS OWING TO RBH

Northam confirms that it has settled all amounts owing to Royal Bafokeng Holdings Proprietary Limited and its subsidiaries (collectively, “RBH”) in respect of the acquisition of a material interest in Royal Bafokeng Platinum Limited (“RBPlat”) from RBH, as announced on 9 November 2021. As a result, Northam’s shareholding in RBPlat is entirely unencumbered.

Northam’s current shareholding in RBPlat comprises 100 219 552 RBPlat shares (representing c. 34.52% of the total RBPlat shares in issue) with a current market value of approximately R14.6 billion based on the closing price per RBPlat share of R146.04 on 27 October 2022.

Alet Coetzee, Northam’s Chief Financial Officer, said “Northam is pleased to receive external recognition of its strong liquidity position and the continued success of its growth strategy, as affirmed by the upgraded credit rating. Northam remains appreciative of the continued support from its lenders.”

Johannesburg
28 October 2022

Northam Holdings shareholders (“shareholders”) are advised that at the annual general meeting of shareholders held on Tuesday, 25 October 2022 (“AGM”), all the ordinary resolutions (other than the non-binding resolutions 4.1 and 4.2) and special resolutions, as set out in the notice of AGM dated Tuesday, 16 August 2022, were passed by the requisite majority of shareholders present or represented by proxy at the AGM. Further details regarding the voting results for each of the resolutions are contained below.Each resolution proposed at the AGM, together with the number and percentage of Northam Holdings ordinary shares (“shares”) voted, the percentage of shares in respect of which shareholders abstained from voting and the percentage of votes carried for and against each resolution, are as follows:Ordinary resolution number 1.1 – re-election of Mr JG Smithies as a director

Ordinary resolution number 1.2 – re-election of Ms TE Kgosi as a director

Ordinary resolution number 1.3 – re-election of Ms HH Hickey as a director

Ordinary resolution number 2 – appointment of Pricewaterhouse Coopers Inc. (with the designated external audit partner being Mr AJ Rossouw CA(SA)) as the independent external auditors of the group

Ordinary resolution number 3.1 – election of Ms HH Hickey as a member of the audit and risk committee

Ordinary resolution number 3.2 – election of Dr NY Jekwa as a member of the audit and risk committee

Ordinary resolution number 3.3 – election of Mr MH Jonas as a member of the audit and risk committee

Ordinary resolution number 4.1 * – non-binding endorsement of the group’s remuneration policy

Ordinary resolution number 4.2 * – non-binding endorsement of the group’s remuneration implementation report

Special resolution number 1 – approval of non-executive directors’ fees

Special resolution number 2 – approval of financial assistance in terms of sections 44 and 45 of the Companies Act No. 71 of 2008

Special resolution number 3 – approval for the general authority to repurchase issued shares

*As more than 25% of the votes cast by shareholders present or represented by proxy at the AGM on ordinary resolutions 4.1 and 4.2, respectively, were against the non-binding endorsement of the group’s remuneration policy and the non-binding endorsement of the group’s remuneration implementation report, the company will continue to engage with dissenting shareholders (i.e. those shareholders who voted against the group’s remuneration policy and/or remuneration implementation report) and hereby invites such shareholders to send comments / concerns / questions relating to the group’s remuneration policy and/or remuneration implementation report, in writing, to Ms PB Beale, the company secretary of Northam, via email at trish.beale@norplats.co.za, to be received by no later than close of business on Thursday, 15 December 2022.Notes

• The total number of shares eligible to vote at the AGM was 396 615 877. 1 share is held in treasury and not eligible to vote at the AGM.
• Percentages of shares voted are calculated in relation to the total issued share capital of Northam Holdings, amounting to 396 615 878 shares.
• Percentage of shares voted for and against are calculated in relation to the total number of shares voted in respect of the relevant resolution.
• Abstentions are calculated as a percentage in relation to the total issued share capital of Northam Holdings.

Johannesburg
25 October 2022

Corporate Advisor and Sponsor to Northam Holdings
One Capital

Attorneys to Northam Holdings and Northam Platinum
Webber Wentzel

Corporate Advisor and Debt Sponsor to Northam Platinum
One Capital

Shareholders are hereby advised that, in accordance with the JSE Limited Listings Requirements, the company’s annual compliance verification certificate prepared in accordance with section 13(G)(2) of the Broad-Based Black Economic Empowerment Act, No. 53 of 2003, as amended, is available on the company’s website via the following link:  
https://www.northam.co.za/downloads/send/148-governance/1487-broad-based-bee-rating-annexure-a-and-certificate

Johannesburg
3 October 2022

Corporate Advisor and Sponsor to Northam Holdings
One Capital

Attorneys to Northam Holdings and Northam Platinum
Webber Wentzel

Corporate Advisor and Debt Sponsor to Northam Platinum
One Capital

The JSE Limited (“JSE”) has granted approval for the listing of NHM022 Senior Unsecured Floating Rate Notes (“Notes”) under series NHM022 issued under the Northam Platinum Limited ZAR15 000 000 000 Domestic Medium Term Note Programme (“Programme”), dated 29 October 2020, as amended and supplemented from time to time (“Programme Memorandum”), as guaranteed by Booysendal Platinum Proprietary Limited, with effect from 23 September 2022.

Any capitalised terms not defined in this announcement shall have the meanings ascribed thereto in the section of the Programme Memorandum headed “Terms and Conditions of the Notes”.

The details pertaining to the issue of NHM022 are as follows:

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

Johannesburg
22 September 2022

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

Attorneys to Northam, the Arranger and the Dealer in respect of the Programme
Bowman Gilfillan Inc.

Northam bondholders are hereby advised that the company’s annual financial statements for the year ended 30 June 2022, which incorporate the auditor’s unmodified audit report thereon, are available on the Northam website at https://www.northam.co.za/investors-and-media/publications/financials and available for inspection, during office hours, at the registered office of the company.

Johannesburg
26 August 2022

Total refined metal production 9.7% higher year on year

Northam Platinum Holdings Limited (Northam Holdings) today reported results for the 2022 financial year (F2022). The full suite of year-end reports is available on the Northam website at www.northam.co.za.

Key developments in the year:

• Significant value creation attributable to the conclusion of the Composite Transaction
• Number of shares in issue lower by 22.2%
• Normalised HEPS 20.7% higher at 2 573 cents
• Growth strategy unfolds with acquisition of a strategic holding in RBPlat
• Organic growth projects remain on track
• Solid operational and financial performance
• Net Debt to EBITDA ratio of 0.97

CHALLENGES

• Unit cash costs higher by 18.9%
• Global above-inflation cost environment
• Lower 4E metal prices put pressure on margins
• Safety setback at Zondereinde with two fatalities in the year
• Booysendal reports decline in production owing to eastern limb community unrest and lower ore grades

GROUP OPERATIONAL PERFORMANCE

OPERATING REVIEW

Equivalent refined metal from own operations increased marginally to 716 488 oz 4E. Zondereinde recorded improved production during the second half of the financial year, whilst production growth from the Booysendal South mine was in line with the forecast.

The challenging operating environment at both Zondereinde and Booysendal was a dominant feature of the year:   

• Zondereinde tragically suffered two mining-related fatalities, together with increased medical absences relating to the ongoing COVID-19 pandemic.
• At Booysendal the ongoing regional community unrest in the eastern limb of the Bushveld Complex resulted in lost production shifts, and the intersection of a lower grade reef package at North mine led to declines in concentrator feed grades

Nevertheless, the group’s growth projects remain on track with the Western extension at Zondereinde and the South mine at Booysendal making solid progress, and Booysendal’s fatality-free safety record remains intact. Eland continues its ramp-up, with Maroelabult adding considerable synergistic benefits.

The development of Booysendal South is progressing well despite work stoppages due to community unrest in the region. Underground development and stoping ramp-up at the Central UG2 modules is progressing and decline development at the South Merensky module is on track. Underground stoping has commenced at the BS4 UG2 module and will ramp-up over the coming 12 months. The North aerial rope conveyor was commissioned in December 2021 and is operating within design parameters.

At Eland mine, processing of ore from surface sources continues, whilst underground and open pit feed are being batch treated. Development of the Kukama decline system has progressed well, as has strike development to connect with the Maroelabult mine. Underground stoping ramp-up is in progress. In addition, open-pit mining of UG2 started in the eastern portion of the mining right during the first quarter.

With significant cost increases at all the operations, unit cash costs per equivalent refined platinum ounce increased by 18.9% to R34 069/Pt oz.

Capital expenditure grew by 37.2% to R4.6 billion reflecting the progress in our expansionary projects. Speaking to the investment community today chief executive Paul Dunne said; “We plan significant ongoing activity at the Western extension of Zondereinde, as well as at Eland over the coming two years. Consequently, group capital expenditure for the coming financial year is forecast to reach R5.4 billion.

“A raft of global geopolitical issues hold the potential for further disruption to the metal markets, whilst ongoing regional community unrest in the eastern Bushveld and the lingering effects of COVID-19 on our workforce could lead to operational disruption. We continue to monitor the market and the societal landscape and will amend our capital program when and where prudent,” Dunne said.

Along with the ongoing work at the Western extension at Zondereinde, upgrades to the material handling infrastructure at the metallurgical facilities together with the planned rebuild of furnace 1 were completed, and capacity upgrades at the base metal removal plant are in progress.

Work has started on the development of a 11 MW solar power farm to provide electricity to the metallurgical complex. The design and permitting phases have been concluded and earthworks are in progress.

With recycling, we maintain our measured approach.  A dedicated smelter circuit to treat recycling material at the Zondereinde facility was commissioned in May 2022, enhancing our ability to treat high grade recycling products from various sources.

Corporate developments:

Strategically, the year under review has been significant for Northam.

With the implementation of the Composite Transaction during the year, the maturity of the Zambezi BEE Transaction was accelerated, providing a number of strategic outcomes to position the group for the next phase of development. The introduction of Northam Holdings as the new listed entity provides the group with flexibility to undertake future transactions. This was achieved by way of a share exchange implemented on a one for one basis in terms of which Northam shareholders exchanged their Northam Platinum shares for Northam Holdings shares.

In addition, the acquisition of a 34.52% shareholding in Royal Bafokeng Platinum Limited (RBPlat) aligns with our long-term growth, sustainability and operational diversification strategy. The consequent introduction of Royal Bafokeng Investment Holding Company Proprietary Limited (RBIH) as a significant shareholder in Northam Holdings further strengthens the group’s empowerment credentials.

This acquisition holds potential for substantial long-term value creation. It further provides inherent optionality. The complementary metals mix of RBPlat, with a higher relative platinum contribution, fits well within the broader Northam metals basket. The RBPlat assets are young, shallow and well capitalised and occupy a strategically important position in the Western Bushveld. We recognise the Royal Bafokeng Nation’s important contribution and ongoing legacy in respect of RBPlat and are cognisant of our responsibility in respect of the long-term sustainability of RBPlat’s operations and its impact on the broader communities and the Royal Bafokeng Nation as a whole.

The current position in the commodity cycle indicates that the acquisition of long-life, cash generative, producing assets with further growth potential, offers the most compelling value. Our investment in RBPlat is aligned with these investment requirements.

Financial results

Results for the year were adversely affected by lower metal prices and the above-inflationary cost environment, offsetting the 12.8% growth in sales volumes. Operating profits fell by 7.6% to R14.9 billion, attributable to the increase in cost of sales.

Earnings before interest, taxation, depreciation and amortisation (EBITDA) was only marginally lower at R16.5 billion (F2021: R16.7 billion).

The group generated cash flows from operating activities of R11.4 billion during F2022. Northam invested R8.4 billion in the Composite Transaction and a further R8.4 billion in the RBPlat acquisition. This, together with, inter alia, our ongoing investment in expansionary capital expenditure resulted in Net Debt increasing to R16.0 billion, including the deferred portion of the purchase consideration relating to the acquisition of the RBPlat shares, amounting to R1.7 billion as at 30 June 2022.

Commenting on the group’s debt position, chief financial officer Alet Coetzee reiterated: “Northam is comfortable with a self-imposed long-term Net Debt to EBITDA ratio of 1 to 1 in the pursuance of the group’s growth strategy. At year end the debt ratio was 0.97, falling within our self-imposed target. ”

To illustrate the context, Coetzee pointed to the Net Debt which approximates the value of Northam’s 34.52% investment in RBPlat, which is a liquid asset, and the c. R18.8 billion value of the 4E inventory at year-end.

The group’s share of earnings from RBPlat amounted to R777.0 million. A dividend of R536.2 million was declared and received in respect of Northam’s shareholding in RBPlat. In addition, subsequent to year end a further dividend of R245.5 million was declared in respect of Northam’s shareholding in RBPlat.

Prospects for the year ahead
Looking to the future Dunne pointed to the three UG2 mining modules at Booysendal South being commissioned and engineered and contributing to the group production forecast in a range of 770 000 to 810 000 oz 4E, with capital forecast at R5.4 billion in 2023.

At the same time, Dunne cautioned that the following key factors would be critical in impacting future financial results:

• Group safety performance and health and wellness of our employees
• Growth strategy delivery
• The results of our project execution phases
• The success of developing optionality in the market

R&A Strategic Communications, Johannesburg, Tel +27 (0)11 880 3924

• Marion Brower +27 71 493 0387
• Memory Johnstone +27 82 719 3081

Highlights for the year under review, 30 June 2022 (F2022)

• Significant value creation, value unlock and value return for shareholders associated with the successful acceleration of the Zambezi BEE transaction
• Acquisition of a strategic shareholding in RBPlat, aligned with our growth strategy, also yielding dividend income
• Continued progress with our organic growth projects, which remain on track
• Solid operational performance, considering the specific challenges encountered
• Satisfactory financial performance, notwithstanding margin pressures associated with the prevailing global above-inflationary cost environment and lower 4E metal prices
• Net debt to EBITDA of 0.97, within our self-imposed target ratio of 1:1 during the pursuance of the group’s growth strategy

Introduction

As published on SENS on 20 September 2021, Northam Holdings was introduced as the new holding company for the group by way of a share exchange implemented on a one for one basis, in terms of which Northam Platinum shareholders (excluding Zambezi Platinum (RF) Proprietary Limited (previously Zambezi Platinum (RF) Limited), (“Zambezi”) exchanged their ordinary shares in Northam Platinum (“Northam Platinum shares”) for ordinary shares in Northam Holdings (“Northam Holdings shares”). Consequently, Northam Platinum became a subsidiary of Northam Holdings and all Northam Platinum shares in issue were delisted from the Main Board of the securities exchange operated by the JSE Limited (“JSE”) and all Northam Holdings shares in issue were listed on the Main Board of the JSE, thereby ensuring the seamless continuation of the group’s listing.

In light of the above, the consolidated financial results of Northam Holdings for the year ended 30 June 2022 (“F2022”) are reflected as a continuation and comparison of the group’s financial results. Northam Platinum is therefore effectively the comparative predecessor for financial reporting purposes.

Northam Holdings expects to deliver satisfactory financial results for F2022, despite significant inflationary pressures and a decrease in the average 4E dollar price achieved.
The table below provides key financial features for F2022 (Northam Holdings), compared to those for the year ended 30 June 2021 (“F2021”) (Northam Platinum) as follows:

1. Since the consolidated financial results of Northam Holdings are in substance a continuation of the group, the shares used in calculating the number of issued shares and weighted average number of issued shares are based on the issued stated capital of the entity listed on the JSE at the relevant stage (i.e. Northam Platinum for F2021 and Northam Holdings for F2022), used to determine normalised headline earnings per share.

2. Used to determine the basic and headline earnings per share.

The total number of shares in issue reduced by approximately 22.2% as a result of, inter alia:

• a reduction in Northam Platinum shares pursuant to the early maturity of the broad-based black economic empowerment (“B-BBEE”) transaction with Zambezi (“Zambezi BEE transaction”) (shareholders are referred to the combined circular dated Monday, 31 May 2021 (“Circular”) for further details); and
• a subsequent issue of 34 399 725 Northam Holdings shares to Royal Bafokeng Investment Holding Company Proprietary Limited (“RBH”) in settlement of a portion of the purchase consideration for the acquisition of Royal Bafokeng Platinum Limited (“RBPlat”) shares (“RBPlat shares”) from RBH (shareholders are referred to the announcements published by Northam on SENS on 9 and 19 November 2021 for further details).

Production and unit cash costs

Notwithstanding the array of challenges faced in F2022, our operations collectively achieved a steady increase in production and our growth projects remain on track.

A key feature has been the difficult operational environments at the Zondereinde and Booysendal mines. During the first half of F2022, Zondereinde tragically suffered two mining-related fatalities, together with increased medical absences relating to the COVID-19 pandemic. Booysendal was affected by regional community unrest, which impacted the entire eastern Bushveld region, throughout the financial year, which resulted in lost production shifts, and was also affected by the intersection of a lower grade reef package in the upper southern portion of the North UG2 mine, which led to a decrease in concentrator feed grade. These challenges and external events negatively impacted the group’s metal production and unit cash costs during the period.

Despite the aforementioned challenges, the group’s equivalent refined metal from own operations increased to 716 488 oz 4E (F2021: 690 867 oz 4E). Zondereinde recorded improved production during the second half of F2022, whilst production growth from Booysendal was lower than forecast as a result of lower grade mined at Booysendal North.

In respect of our current expansionary projects, development of the Western extension at Zondereinde has progressed well; Booysendal has made good progress on South mine, whilst recording 7 million fatality-free shifts and remaining fatality free since inception; and Eland continues its ramp-up, with the addition of the recently acquired Maroelabult section adding considerable synergistic benefits.

Group unit cash costs per equivalent refined platinum ounce increased by 18.9% to R34 069/Pt oz (F2021: R28 662/Pt oz) on the back of cost increases at all of the operations. Cash costs per equivalent refined platinum ounce increased by 14.8% at Zondereinde to R34 828/Pt oz (F2021: R30 350/Pt oz), 21.9% at Booysendal to R25 321/Pt oz (F2021: R20 780/Pt oz), and 29.5% at Eland to R55 594/Pt oz (F2021: R42 928/Pt oz). These increases were primarily driven by (i) above-inflationary increases in chemicals, steel components, emulsions and fuel, (ii) an increase in the number of employees in service as the group continues to grow the labour complement to enable the planned expanded production profile together with the negotiated wage increase for our employees and (iii) lower concentrator feed grades from the Booysendal North UG2 mine.

A large portion of Eland mine’s production is currently being derived from surface sources in order to ensure appropriate start-up volume throughput levels and purchased at prevailing metal prices. This impacted the unit cash cost for Eland, as well as that of the group.

Unit cash costs for the group and per operation for F2022 compared to F2021 were as follows:

Key production metrics for F2022 compared to F2021 were as follows:

The cost of purchased concentrates and recycling material decreased by 9.4%, despite 4E volumes purchased increasing by 11.2%. This was a result of changes in the ruling commodity prices as well as the prill split of the purchased material, which contained more platinum and rhodium and less palladium in the year under review, compared to the previous corresponding period.

Sales

Sales volumes for the current financial year were impacted by the planned rebuild and upgrade of smelter furnace 1 at the Zondereinde metallurgical complex (“smelter furnace 1”), which commenced during May 2021 and was successfully completed at the end of October 2021.

Sales revenue for F2022 amounted to R34.1 billion, an increase of 4.4% year on year (F2021: R32.6 billion). The increase in sales revenue was the combined result of:

• a 12.8% increase in 4E sales volumes;
• a 13.4% decrease in the average 4E US dollar (USD) basket price, from USD3 049/4E oz during F2021 to USD2 640/4E oz achieved for F2022; and
• a 1.7% weakening in the Rand against the USD, from R15.00 to R15.26.

The minor metals, iridium and ruthenium, continue to perform well, with average USD metal prices per ounce increasing by 10.8% and 58.2% respectively. It is expected that iridium and ruthenium, which are critical to the growing hydrogen economy, will become increasingly significant contributors to revenue. Base metals also performed well with the USD price of nickel and chrome increasing on average by 44.8% and 54.2%, respectively, and the average USD price for copper increasing by 19.1%, on a per tonne basis.

Total revenue per platinum ounce sold decreased by 11.3% to R73 828/Pt oz, from R83 277/Pt oz in F2021. This resulted in a cash profit margin per platinum ounce of 53.9% (F2021: 65.6%).
The table below summarises dispatched metal volumes to the group’s precious metal refiners, compared to metal volumes refined and sold, together with the average achieved USD sales prices per metal. The table does not include attributable ounces relating to Northam’s investment in RBPlat.

Despite the planned rebuild and upgrade of smelter furnace 1 during the first half of F2022 total refined volumes increased by 9.7% to 719 580 oz 4E (F2021: 655 741 oz 4E).
Concentrate sold to a third party to honour legacy offtake agreements relating to the Everest and Maroelabult operations contained 36 305 oz 4E (F2021: nil). Refined metal sold to the group’s customers totalled 701 618 oz 4E (F2021: 654 057 oz 4E).

The services of a second precious metal refiner were engaged during F2022, to cater for the group’s medium to long-term production growth profile.

Financial results

Despite the 12.8% growth in sales volumes, lower average metal prices and an above-inflationary cost environment negatively impacted the annual financial results. Cost of sales increased by 16.1% which, combined with the 4.4% increase in sales revenue, resulted in operating profit decreasing by 7.6% to R14.9 billion for the year under review (F2021: R16.1 billion).

We operate a largely fixed cost business and consider the best defence against current global inflationary pressures to be increasing production and doing so efficiently. Our capital allocation and treasury decisions have been guided by our growth strategy and we have been consistent in our approach of growing our production base down the industry cost curve.
Earnings before interest, taxation, depreciation and amortisation (“EBITDA”) was marginally lower at R16.5 billion (F2021: R16.7 billion).

As at 30 June 2022, inventory on hand amounted to approximately 353 000 oz 4E, which was valued at c. R18.8 billion when applying the 4E basket price and exchange rate at year end.
The group generated cash flows from operating activities of R11.4 billion during F2022 (F2021: R12.1 billion). Northam invested R8.4 billion towards the Composite Transaction (as contemplated in the Circular) and a further R8.4 billion towards the investment in RBPlat. This, together with, inter alia, our ongoing investment in expansionary capital expenditure resulted in net debt increasing to R16.0 billion, including the deferred portion of the purchase consideration relating to the acquisition of the RBPlat shares, amounting to R1.7 billion as at 30 June 2022.

As previously communicated to shareholders, Northam is comfortable with a self-imposed long-term net debt to EBITDA ratio (“debt ratio”) of 1 to 1 in the pursuance of the group’s growth strategy. As at 30 June 2022, the debt ratio was 0.97, falling within the group’s self-imposed target.

The following additional factors contextualises the net debt position of the group:

• Net debt approximates the value of our 34.52% investment in RBPlat, which is a liquid asset represented by 100 219 552 RBPlat shares listed on the JSE.
• The value of our 4E inventory at year-end (market value of c. R18.8 billion) exceeds net debt.

For the year under review, the group’s share of earnings from RBPlat amounted to R777.0 million (included in EBITDA and calculated for the period from 19 November 2021 until 30 June 2022, adjusted for additional RBPlat shares purchased on‑market by Northam during December 2021, as announced on SENS on 7 December 2021). A dividend of R536.2 million was declared and received in respect of Northam’s shareholding in RBPlat. In addition, subsequent to the year end a further dividend of R245.5 million was declared in respect of Northam’s shareholding in RBPlat. As at 30 June 2022, RBPlat reported net cash on hand (after taking into account the RBPlat dividend declaration in respect of this period) of R4.2 billion. This equates to c. R14.37 of cash per RBPlat share currently in issue.

Investment in RBPlat

During the first half of F2022, Northam made a strategic investment by acquiring a significant shareholding in RBPlat, as published on SENS on 9 and 19 November 2021. Further acquisitions by Northam of RBPlat shares were announced on SENS on 7 December 2021. Shareholders are referred to the relevant announcements for details regarding the RBPlat investment.

As at 30 June 2022, Northam held 100 219 552 RBPlat shares. As set out in more detail in the 7 December 2021 SENS announcement, Northam has the option to increase its shareholding in RBPlat by purchasing up to a further 6 145 798 RBPlat shares (“option shares”) at R137.38 per share (calculated as at 30 June 2022, including escalation and after taking into account the dividends declared), as well as a right of first refusal to acquire a further 3 367 673 RBPlat shares (“ROFR shares”). The total RBPlat shares held, as well as the option shares and ROFR shares, represent 37.8% of RBPlat’s total issued shares.

For illustrative purposes, if Northam were to acquire all the option shares as at 30 June 2022 at R137.38 per option share, Northam’s weighted average cost per RBPlat share, in respect of its RBPlat shares, would amount to R164.63 (net of dividends declared). Taking into account the net cash on hand (after taking into account the RBPlat dividend declaration in respect of their interim period), the illustrative weighted average cost decreases to R150.26 per RBPlat share.

Northam believes that its investment in RBPlat holds the potential for substantial long‑term value creation. It provides inherent optionality and its complementary metal mix, with a higher relative platinum contribution, fits well within the broader Northam basket. The RBPlat assets are young, shallow, large, well-capitalised and occupy a strategically important position in the Western Bushveld.

Capital expenditure

Capital expenditure increased to R4.6 billion (F2021: R3.3 billion). This is in line with our capital schedule and is the combined result of increased expansionary capital of R3.1 billion (F2021: R1.8 billion), together with a marginal decrease in sustaining capital expenditure to R1.4 billion (F2021: R1.5 billion).

Expansionary capital expenditure increased as a result of significant development on the Western extension project at Zondereinde, together with the ongoing ramp-up at Eland. Sustaining capital expenditure at Booysendal increased due to a number of extensions to strike belts and the first significant fleet replacements, whilst sustaining capital requirements at our metallurgical operations decreased following the commissioning of the rebuilt smelter furnace 1 at Zondereinde.

Significant ongoing expansion is planned for the Western extension at Zondereinde, as well as at Eland, over the next two years. Consequently, group capital expenditure for the current financial year is estimated to amount to R5.4 billion. We continue to monitor the market and the societal landscape and our capital program will be amended, when and where prudent, to cater for adverse developments including, inter alia, (i) global geopolitical issues which hold the potential for further disruption to the metal markets, (ii) the ongoing regional community unrest in the eastern Bushveld and (iii) the lingering effects of COVID-19 on our workforce.

At Zondereinde mine, stoping is ramping-up within the Western extension and further progress has been made on the deepening project. Reaming of number 3 shaft was completed during April 2022 and equipping is in progress. Pilot drilling of 3a ventilation shaft commenced during the second half of the year and has reached a depth of 650 metres. Both shafts are scheduled to be commissioned during the 2024 financial year. At the metallurgical facilities, upgrades to the material handling infrastructure, together with the planned rebuild of smelter furnace 1, were completed. Capacity upgrades at the base metal removal plant have commenced, in line with our growth profile.

The development of an 11 MW solar power farm to provide electricity to the metallurgical complex commenced. The design and permitting phases for this installation have been concluded and earthworks are in progress. The project was temporarily suspended as a result of global supply chain disruptions resulting from COVID-19, but the project is progressing. In addition, preliminary work on a larger solar facility has commenced.

The development of Booysendal South is progressing well despite work stoppages due to community unrest in the region. Underground development and stoping ramp-up at the Central UG2 modules is progressing, and the steady state complement of stoping crews is in place. Decline development at the South Merensky module is on track. Underground stoping has commenced at the BS4 UG2 module and will ramp-up during the coming 12 months. The North aerial rope conveyor was commissioned in December 2021 and is operating within design parameters.

At Eland mine, processing of ore from surface sources continues, whilst underground and open pit feed are being batch treated. Development of the Kukama decline system has progressed well, as has strike development to connect with Maroelabult mine, which was purchased from Barplats Mines Proprietary Limited, a subsidiary of Eastern Platinum Limited. Underground stoping ramp-up is in progress. In addition, open-pit mining of UG2 commenced in the eastern portion of the Eland mining right during the first quarter of the financial year. First ore was delivered to the concentrator during the second quarter of the financial year.

Conclusion

In summary, whilst the operating environment has been particularly challenging, the group expects to deliver a solid set of results whilst achieving significant strategic advancements, including:

• continued progress in respect of the group’s organic growth projects, which remain on track;
• significant value creation, value unlock and value return for our shareholders, arising from the successful acceleration of the maturity of the Zambezi BEE transaction;
• a significant reduction in issued share capital structured into the acceleration of the maturity of the Zambezi BEE transaction;
• the incorporation of Northam Holdings, which optimises the structure of the group for Northam’s future growth; and
• the significant strategic investment in RBPlat, structured to include RBH as a strategic empowerment shareholder in Northam, representing the interests of the Royal Bafokeng Nation, home to RBPlat employees and communities.

The financial information contained in this announcement is the responsibility of the board of directors of Northam Holdings and has not been reviewed or reported on by Northam Holdings’ auditors. The audited results for Northam Holdings for F2022 are expected to be published on or about 26 August 2022.

Johannesburg
17 August 2022

Northam bondholders are advised of the following interest payment due on Thursday, 11 August 2022:

Johannesburg
5 August 2022

Debt Sponsor
One Capital

Northam bondholders are advised of the following interest payments due on Monday, 13 June 2022:

Johannesburg
8 June 2022

Debt Sponsor
One Capital

The JSE Limited (“JSE”) has granted approval for the listing of a tap issuance of Senior Unsecured Floating Rate Notes (“Notes”) under series NHM021 issued under the Northam Platinum Limited ZAR15 000 000 000 Domestic Medium Term Note Programme (“Programme”), dated 29 October 2020, as amended and supplemented from time to time (“Programme Memorandum”), as guaranteed by Booysendal Platinum Proprietary Limited, with effect from 26 May 2022.

Any capitalised terms not defined in this announcement shall have the meanings ascribed thereto in the section of the Programme Memorandum headed “Terms and Conditions of the Notes”.
The details pertaining to the tap issuance of the NHM021 series are as follows:

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

Johannesburg
24 May 2022

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

Attorneys to Northam, the Arranger and the Dealer in respect of the Programme
Bowman Gilfillan Inc.

Northam bondholders are advised of the following interest payments due on Tuesday, 24 May 2022, Wednesday, 25 May 2022 and Thursday, 26 May 2022:

Johannesburg
19 May 2022

Debt Sponsor
One Capital

In accordance with section 122(3)(b) of the Companies Act, No. 71 of 2008 (“Companies Act”), as amended, and paragraph 3.83(b) of the JSE Limited Listings Requirements, Northam Holdings shareholders are advised that the company received notification, in the prescribed form, from Fairtree Asset Management Proprietary Limited, on behalf of its clients (“Fairtree”), advising that it has acquired a beneficial interest in the securities of Northam Holdings, such that Fairtree now holds a beneficial interest of 5.032% in the company’s total issued share capital.

The company will file the relevant notification with the Takeover Regulation Panel, as required in terms of section 122(3)(a) of the Companies Act.

Johannesburg
28 April 2022

Corporate Advisor and Sponsor to Northam Holdings
One Capital

Attorneys to Northam Holdings and Northam Platinum
Webber Wentzel

Corporate Advisor and Debt Sponsor to Northam Platinum
One Capital

…extends life of Zondereinde mine to over 30 years

Northam has achieved another major project milestone with the completion of drilling of its No 3 Shaft, at a world record depth of 1 382 metres at the group’s Zondereinde mine in the western bushveld. Work on the No 3 shaft at Zondereinde’s significant brownfields capital expansion project, the Western extension, started in early 2020.

Zondereinde’s Western extension is a quality resource block containing 21 million ounces of PGM within the high-grade Merensky and UG2 orebodies. The resource was purchased in 2017 for R1 billion. The addition of the Western extension improves operational flexibility at Zondereinde and will permit annual PGM output to increase to 350 000 ounces 4E by 2026. It also extends the remaining life of the operation to over 30 years.

Mining activity from the existing workings of the Zondereinde mine will gradually transition into the Western extension block. The new shaft complex is situated some four kilometres from the original Zondereinde Mine complex, a distance which constrains service delivery and logistics. The new shaft will transport people and materials, as well as allow the supply of services, including backfill, chilled service water and ventilation, to the underground workings. This will alleviate the challenges associated with distance from the existing Zondereinde shafts.

The Zondereinde mine, situated in Limpopo Province near Thabazimbi is a key contributor to social upliftment and development in the area. The development of no. 3 shaft will secure the jobs of Zondereinde’s current employee complement of 10 700, as well as an additional 600 permanent positions. This provides the impetus for further economic activity in the province.

Northam CEO Paul Dunne said today: “This project milestone was delivered on time and on budget by the Zondereinde team, in collaboration with our project service provider, Master Drilling. The resultant long-term stability and life of mine extension delivered by this project will have a beneficial impact on the mine, its stakeholders and the local economy for decades to come.”

R&A Strategic Communications, Johannesburg, Tel +27 (0)11 880 3924

• Marion Brower +27 71 493 0387
• Memory Johnstone +27 82 719 3081
• Siseko Njobeni +27 11 880 3924

Visual resources will be available on the Northam website, www.northam.co.za

Northam bondholders are advised of the following interest payment due on Tuesday, 26 April 2022:

Johannesburg
21 April 2022

Debt Sponsor
One Capital

The JSE Limited (“JSE”) has granted approval for the listing of tap issuances of Senior Unsecured Floating Rate Notes (“Notes”) under series NHM012, NHM018, NHM019 and NHM021 issued under the Northam Platinum Limited ZAR15 000 000 000 Domestic Medium Term Note Programme (“Programme”), dated 29 October 2020, as amended and supplemented from time to time (“Programme Memorandum”), as guaranteed by Booysendal Platinum Proprietary Limited, with effect from 19 April 2022.

Any capitalised terms not defined in this announcement shall have the meanings ascribed thereto in the section of the Programme Memorandum headed “Terms and Conditions of the Notes”.

The details pertaining to the tap issuance of the NHM012 series are as follows:

The details pertaining to the tap issuance of the NHM018 series are as follows:

The details pertaining to the tap issuance of the NHM019 series are as follows:

The details pertaining to the issue of NHM021 are as follows:

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

Johannesburg
13 April 2022

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

Attorneys to Northam, the Arranger and the Dealer in respect of the Programme
Bowman Gilfillan Inc.

Strategically, the period under review has been significant for Northam.

Key features:

* Profit before Zambezi preference share dividends adding back interest and depreciation

Strategically, the period under review has been significant for Northam.

Firstly, the maturity of the broad-based black economic empowerment transaction with Zambezi Platinum (RF) Limited (“Zambezi”), (“Zambezi BEE transaction”) was accelerated as part of the Composite Transaction (as contemplated in the circular to shareholders dated 31 May 2021), which was approved by 99.9% of shareholders on 30 June 2021. The implementation of the Composite Transaction will enable Northam to achieve a number of strategic outcomes that will position the group for the next phase in its development. The Composite Transaction also resulted in the introduction of Northam Holdings as the new listed entity which was achieved by way of a share exchange implemented on a one-for-one basis in terms of which Northam shareholders exchanged their Northam shares for Northam Holdings shares. The introduction of Northam Holdings optimises the group structure for compliance with the historically disadvantaged persons ownership requirements as set out in the Mining Charter.

Secondly, the acquisition of a 34.68% shareholding in Royal Bafokeng Platinum Limited (“RBPlat”) aligns with Northam’s long-term growth, sustainability and operational diversification strategy. The consequent introduction of Royal Bafokeng Investment Holding Company Proprietary Limited as a significant shareholder in Northam Holdings further strengthens the group’s empowerment credentials.

Northam believes that this acquisition holds the potential for substantial long-term value creation. It further provides inherent optionality. The complementary metals mix of RBPlat, with a higher relative platinum contribution, fits well within the broader Northam metals basket. The RBPlat assets are young, shallow and well capitalised and occupy a strategically important position in the western limb of the Bushveld Complex. Northam recognises the Royal Bafokeng Nation’s important contribution and ongoing legacy in respect of RBPlat and is cognisant of Northam’s responsibility in respect of the long-term sustainability of RBPlat’s operations and its impact on the broader communities and the Royal Bafokeng Nation as a whole.

Financial results

Sales revenue for the six months ended 31 December 2021 was R13.9 billion, an increase of 16.8% compared to the sales revenue of R11.9 billion reported in the six months ended 31 December 2020 (“H1 F2021”). The increase in sales revenue was as a result of higher USD basket prices which was offset by a decrease in sales volumes on a 4E basis and a stronger ZAR/USD exchange rate, compared to H1 F2021. 4E sales volumes were impacted by the planned rebuild and upgrade of smelter furnace 1 at the Zondereinde metallurgical complex (“furnace 1”), which commenced during May 2021 and was successfully completed at the end of October 2021.

Despite the operational and inflationary challenges experienced, operating profit increased by 12.7%. Operating profit was impacted by the 16.8% increase in sales revenue which was partially offset by a corresponding 20.0% increase in cost of sales, resulting in an operating profit of R5.9 billion for the period under review (H1 F2021: R5.2 billion). This translates to an operating profit margin of 42.2% (H1 F2021: 43.7%).

EBITDA increased by 19.1% to R6.4 billion (H1 F2021: R5.4 billion).

The group’s financial results were affected by the challenging operational performance which impacted sales volumes, and in turn impacted operating profit, and the resultant cash position of the group. The cash position was further impacted by the acceleration of the maturity of the Zambezi BEE transaction, as well as the acquisition of the RBPlat shares.

During the period under review the group generated cash flow from operations amounting to R2.9 billion (H1 F2021: R3.1 billion). Cash generated was impacted by marginally lower sales volumes and higher than inflation cost increases. Sales volumes were impacted by higher inventory levels arising from the planned rebuild and upgrade of furnace 1 during the period under review, together with the increased pipeline as a result of the introduction of a second precious metal refiner. As at 31 December 2021, inventory on hand amounted to 379 874 oz 4E. Applying the average basket price realised during the period under review, inventory on hand is valued at c. R18.7 billion as at 31 December 2021.

Cash generated was applied towards both the Composite Transaction, resulting in an outflow of cash in excess of R6.6 billion, and the acquisition of the investment in RBPlat amounting to an outflow of R4.1 billion during the period under review. This resulted in net debt increasing to R14.3 billion, excluding the deferred portion of the purchase consideration relating to the acquisition of the RBPlat shares (“deferred acquisition consideration”) of R5.7 billion. 

As previously communicated to shareholders, Northam is comfortable with a self-imposed long-term net debt to EBITDA ratio of 1 to 1 (“net debt ratio”) in the pursuance of the group’s growth strategy. Excluding the deferred acquisition consideration, which relates to a corresponding cash generative underlying asset with no net debt, the net debt ratio as at 31 December 2021 (expressed on a rolling twelve month basis) amounted to 0.81. Inclusive of the deferred acquisition consideration, the net debt ratio was 1.13. The ongoing release of metal built up ahead of the smelter following the recommissioning of furnace 1, as well as a normalisation of the metal pipeline following the introduction of a second precious metal refiner, combined with the strong current metal price environment and the receipt by Northam of the dividend declared by RBPlat subsequent to the period end, will contribute to normalising the net debt ratio (post settlement of the deferred acquisition consideration) by 31 December 2022.

Group operational review and capital expenditure

The period under review has been extremely challenging, but Northam’s growth aspirations remain on track.

A key feature has been the difficult operational environments at the Zondereinde and Booysendal mines. Tragically, Zondereinde suffered two mining related fatalities, together with elevated medical absences relating to the ongoing COVID-19 pandemic. Furthermore, regional community unrest in the eastern region of the Bushveld Complex resulted in lost production days at Booysendal. This has negatively impacted the group’s metal production and unit cash costs. Despite this, Northam’s expansionary projects remain on track. Development of the Western extension at Zondereinde has progressed well. Booysendal has made good progress on South mine whilst recording seven million fatality-free shifts and remaining fatality free since inception. Eland mine continues to ramp-up and the addition of the recently acquired Maroelabult section adds considerable benefits.

The group’s equivalent refined metal from own operations decreased marginally to 351 359 oz 4E (H1 F2021: 352 741 oz 4E). The health, safety and community issues mentioned above resulted in lower production at Zondereinde and only marginal growth at Booysendal.

Group chrome concentrate production decreased by 17.3% to 430 697 tonnes (H1 F2021: 521 086 tonnes), as a result of a commensurate lower UG2 concentrator throughput.

Group unit cash costs per equivalent refined platinum ounce increased by 18.6% to R32 814/Pt oz (H1 F2021: R27 660/Pt oz) as a result of cost increases at all of the operations. Zondereinde cash costs increased by 21.3% to R34 544/Pt oz (H1 F2021: R28 473/Pt oz), with a corresponding increase of 19.1% at Booysendal to R24 158/Pt oz (H1 F2021: R20 288/Pt oz), and Eland recording an increase of 7.9% to R42 583/Pt oz (H1 F2021: R39 476/Pt oz).

Capital expenditure increased to R2.3 billion (H1 F2021: R1.3 billion). This is the result of the restart of capital projects that had been curtailed following the onset of the COVID-19 pandemic, partially offset by capital projects having either been completed, or being near completion at Booysendal mine. R1.5 billion (H1 F2021: R918.1 million) was spent on expansionary capital expenditure and R776.9 million (H1 F2021: R380.5 million) on sustaining capital expenditure.

The significant increase in sustaining capital expenditure was as a result of the planned rebuild and upgrade of furnace 1, together with a number of extensions to strike belts at Zondereinde mine and the first significant fleet replacements at Booysendal.

Expansionary projects that had been temporarily scaled back included: the Central Merensky and BS4 modules at Booysendal mine; aspects of the Western extension number 3 shaft project at Zondereinde mine; and the stoping build-up at Eland mine. Following improved market certainty during the previous corresponding period, all curtailed growth projects were re-initiated and the majority of workflow impacts resulting from the stoppage were clawed back. As such, the overall impact on the group’s growth strategy has been minimal. Group capital expenditure for the full financial year is forecasted to amount to R4.6 billion. The potential for further disruption to operations and the metal markets as a result of the COVID-19 pandemic remains. In addition, there is a continued risk of regional community unrest on the eastern limb of the Bushveld Complex. We continue to monitor the market and the societal landscape and will amend our capital programme when and where prudent. 

At Zondereinde mine, stoping is ramping-up within the Western extension section and further progress has been made on the deepening project. Reaming of number 3 shaft is progressing on track. At the metallurgical facilities, upgrades to the material handling infrastructure together with the planned rebuild of furnace 1 were completed as stated above. Capacity upgrades at the base metal removal plant have commenced, in order to align with our growth profile.

The development of Booysendal South is progressing well despite work stoppages due to community unrest in the region. Construction of surface infrastructure has been completed and underground development and stoping ramp-up at the Central UG2 modules is progressing. Decline development at the South Merensky module is on track. Underground stoping has commenced at the BS4 UG2 module and will ramp-up over the coming twelve months. The North aerial rope conveyor was commissioned in December 2021 and is operating within design parameters.

At Eland mine, processing of surface sources continues. Development of the Kukama decline system has progressed well, as has strike development to connect with the Maroelabult mine which was purchased from Eastern Platinum Limited. Underground stoping ramp-up is in progress. In addition, open-pit mining of UG2 commenced in the eastern portion of the mining right during the first quarter of the 2022 financial year. First ore was delivered to the concentrator during the second quarter.

Returning meaningful value to our shareholders

There are a number of ways that value can be returned to shareholders. This includes cash dividends, but also includes share buy-backs and, previously, the purchase of Zambezi preference shares.
The group has returned significant value to shareholders over the last two years through the acquisition of Zambezi preference shares and the early maturity of the Zambezi BEE transaction, which resulted in a reduction in the group’s issued share capital of 28.9%. 

The company considers an interim and final dividend at each reporting period. At its discretion, the board of directors of the company (“board”) may consider a special dividend where appropriate and dependent on the perceived need to retain funds for expansion or operating purposes. The quantum of any dividend would be determined by also taking into account expected future metal prices and exchange rates, together with capital commitments at the time of consideration by the board.

The company is currently at a critical juncture in respect of its growth trajectory, with various potential outcomes which remain to be determined. These outcomes will contribute to and inform our approach to dividends.

Accordingly, the board has resolved to not declare an interim dividend for the six months ended 31 December 2021 (H1 F2021: R Nil per share).

About this announcement

This short-form announcement is the responsibility of the board and is only a summary of the information in the group’s published condensed reviewed interim financial results for the six months ended 31 December 2021 and does not contain full or complete details.

Any investment decisions by investors and/or shareholders should be based on the published condensed reviewed interim financial results accessible via the JSE link at https://senspdf.jse.co.za/documents/2022/JSE/ISSE/NPHE/Interim_22.pdf and on the company’s website at: www.northam.co.za.

The condensed reviewed interim financial results are also available for inspection at no charge at the company’s registered office (Building 4, 1st Floor, Maxwell Office Park, Magwa Crescent West, Waterfall City, Jukskei View) and the offices of its sponsor, One Capital Sponsor Services Proprietary Limited (17 Fricker Road, Illovo), during normal business hours.

Johannesburg
31 March 2022

Shareholders are referred to the announcement published by Northam on SENS on 9 December 2021 in response to the announcement published by RBPlat on the same date regarding, inter alia, a submission made to the Takeover Regulation Panel (“TRP”) by the independent board of RBPlat, as constituted in terms of regulation 108 of the Companies Regulations, 2011, alleging that Northam had possibly triggered a mandatory offer in terms of section 123 of the Companies Act, No. 71 of 2008 (“Alleged Mandatory Offer”), (“RBP TRP Submission”).

Following, inter alia, Northam’s submission to the TRP in response to the RBP TRP Submission, Northam is pleased to advise that the TRP has today, 30 March 2022, ruled in favour of Northam’s position that the Alleged Mandatory Offer has not been triggered and accordingly, the RBP TRP Submission has been dismissed.

The board of directors of Northam Holdings (to the extent that the information relates to Northam Holdings) accepts responsibility for the information contained in this announcement and certifies that, to the best of its knowledge and belief, the information contained in this announcement relating to Northam Holdings is true and this announcement does not omit anything that is likely to affect the importance of such information.

Johannesburg
30 March 2022

Corporate Advisor and Sponsor to Northam Holdings
One Capital

Attorneys to Northam Holdings and Northam Platinum
Webber Wentzel

Corporate Advisor and Debt Sponsor to Northam Platinum
One Capital

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.

Northam expects to report an increase in earnings per share in the range of 55.9% to 65.9% for the six months ended 31 December 2021 (“H1 F2022”) compared to the six months ended 31 December 2020 (“H1 F2021”). 

As published on SENS on 20 September 2021, Northam Holdings was introduced as the new holding company for the group by way of a share exchange implemented on a 1 for 1 basis, in terms of which Northam Platinum shareholders exchanged their ordinary shares (net of treasury shares) in Northam Platinum (“Northam Platinum shares”) for ordinary shares in Northam Holdings (“Northam Holdings shares”). Simultaneously, Northam Platinum became a subsidiary of Northam Holdings and all Northam Platinum shares in issue were delisted from, and all Northam Holdings shares in issue were listed on, the Main Board of the exchange operated by the JSE Limited, thereby ensuring the continuation of the group listing.

In light of the above, the condensed reviewed interim financial results of Northam Holdings (H1 F2022) reflect the arrangement that is in substance a continuation of the group. Northam Platinum is the predecessor for financial reporting purposes (H1 F2021).

Key financial features of H1 F2022 (Northam Holdings), compared to those of H1 F2021 (Northam Platinum) were as follows:

Notes:

1. Since the consolidated financial results of Northam Holdings are in substance a continuation of the group, the shares used in calculating the number of issued shares and weighted average number of issued shares are based on the issued stated capital of the listed entity at that stage.
2. Used to determine the basic and headline earnings per share.

The number of shares in issue reduced by approximately 22.2%. This is the net outcome across both entities (Northam Holdings and Northam Platinum) resulting from, inter alia:

• a reduction in Northam Platinum shares pursuant to the early maturity of the broad-based black economic empowerment (“BBBEE”) transaction with Zambezi Platinum (RF) Limited (“Zambezi BEE transaction”) (shareholders are referred to the circular dated 31 May 2021 setting out further details to this transaction); and
• a subsequent issue of Northam Holdings shares to Royal Bafokeng Investment Holding Company Proprietary Limited (“RBH”) in settlement of a portion of the purchase consideration for the acquisition of the Royal Bafokeng Platinum Limited (“RBPlat”) shares (“RBPlat shares”) from RBH.

Production and unit cash costs

The group’s equivalent refined metal from own operations decreased marginally to 351 359 oz 4E (H1 F2021: 352 741 oz 4E), as a result of challenging operational circumstances experienced during the period under review and was largely attributable to lower production at Zondereinde. 

The Zondereinde and Booysendal mines experienced particularly difficult operational environments during this period. Tragically, Zondereinde suffered two mining related fatalities, together with increased medical absences relating to the ongoing COVID‑19 pandemic. Furthermore, regional community unrest resulted in various production stoppages at Booysendal. These factors negatively impacted the group’s metal production as well as unit cash costs.

Group unit cash costs per equivalent refined platinum ounce increased by 18.6% to R32 814/Pt oz (H1 F2021: R27 660/Pt oz) as a result of cost increases at all operations. Zondereinde’s unit cash costs escalated by 21.3% to R34 544/Pt oz (H1 F2021: R28 473/Pt oz), with a corresponding increase of 19.1% at Booysendal to R24 158/Pt oz (H1 F2021: R20 288/Pt oz), and a 7.9% increase at Eland to R42 583/Pt oz (H1 F2021: R39 476/Pt oz). These increases were the result of higher input costs and lower than anticipated production volumes. Higher input costs were the result of an increase in the number of employees in service as the group continues to grow the labour component to enable the planned expanded production profile, as well as higher than normal inflation relating to, in particular, electricity tariffs and consumables such as diesel, steel and chemicals. 

Despite the challenging operating environment, the group’s expansionary projects remain on track. Development of the Western extension at Zondereinde has progressed well. Booysendal has made good progress on South mine, whilst recording seven million fatality free shifts and remaining fatality free since inception. Eland mine continues to ramp-up and the addition of the recently acquired Maroelabult section, transferred in January 2022, provides flexibility which will positively impact the overall mine build programme.

Unit cash costs for the group and per operation for H1 F2022 compared to H1 F2021 were as follows:

Key production metrics for H1 F2022 compared to H1 F2021 were as follows:

Volumes of purchased material increased by 34.2% to 25 188 oz 4E (H1 F2021: 18 772 oz 4E). The cost of purchased material is determined by applying the ruling commodity prices to the prill split of the purchased material. During the period under review third party material purchased contained more platinum, with a lower cost, and less palladium, with a higher cost, than the previous corresponding period which impacted the cost of the material purchased, resulting in a cost increase of 21.7%.

Equivalent refined production from own operations for the full financial year ending 30 June 2022 is forecast to be between 680 000 and 710 000 oz 4E. This will result in an estimated unit cash cost per platinum ounce of between R33 000 and R34 000, assuming no further adverse inflationary pressure during the remainder of the current financial year.

Sales

Sales volumes were impacted by the planned rebuild and upgrade of smelter furnace 1 at the Zondereinde Metallurgical complex (“furnace 1”) which commenced during May 2021 and was successfully completed at the end of October 2021.

Sales revenue for the period amounted to R13.9 billion, an increase of 16.8% from the previous corresponding period (H1 F2021: R11.9 billion). This increase was the combined result of softer PGM sales volumes (309 255 oz 4E versus 315 320 oz 4E in H1 F2021) in light of the furnace 1 rebuild and upgrade and higher USD basket prices, which prices were somewhat offset by a stronger ZAR/USD exchange rate.

The average USD basket price achieved increased by 22.5% to USD2 647/4E oz, from USD2 160/4E oz in H1 F2021. This benefitted from an 8.0% increase in the average platinum price to USD1 009/oz (H1 F2021: USD934/oz), together with a 15.7% increase in the average rhodium price to USD15 385/oz (H1 F2021: USD13 296/oz). The price of minor metals, iridium and ruthenium, continue to perform well, increasing by an average of 147.8% and 127.5% respectively, during the period under review. It is expected that iridium and ruthenium, which are critical to the growing hydrogen economy, will become increasingly significant contributors to the group’s revenue.

The average ZAR/USD exchange rate strengthened by 6.2% over the same period, to R15.04/USD (H1 F2021: R16.04/USD).

Total revenue per platinum ounce sold increased by 14.4% to R70 140/Pt oz, from R61 307/Pt oz in H1 F2021, resulting in a cash profit margin per platinum ounce in excess of 50%.

Sales volumes are expected to increase during the second half of the 2022 financial year as inventory built up ahead of the smelter is being processed. Sales guidance for the full financial year is between 720 000 and 740 000 oz 4E, with 770 000 to 800 000 oz 4E expected to be delivered to the group’s refiners.

The table below summarises dispatched metal volumes to the group’s precious metal refiners, compared to metal volumes refined and sold, together with the average achieved USD sales prices per metal.

The above table does not include attributable ounces relating to Northam’s investment in RBPlat.

As a result of the planned rebuild and upgrade of furnace 1 during the period under review, total refined volumes for the 6 months decreased by 7.3% to 298 797 oz 4E (H1 F2021: 322 170 oz 4E).

Concentrate sold to a third party in order to honour legacy offtake agreements relating to the Everest and Maroelabult operations contained 19 758 oz 4E. Refined metal sold to the group’s customers totalled 289 497 oz 4E.

The group engaged the services of a second precious metal refiner during the period under review to cater for the group’s medium to long-term production growth profile. As a result, the precious metal pipeline increased by approximately 40 000 oz 4E, reducing metal available for sales during H1 F2022.

Financial results

Despite the operational and inflationary challenges experienced, operating profit increased by 12.7%. The key contributor to this increase was a 16.8% increase in revenue which was partially offset by a corresponding 20.0% increase in cost of sales, resulting in an operating profit of R5.9 billion for the period under review (H1 F2021: R5.2 billion).  

Earnings before interest, taxation, depreciation and amortisation (“EBITDA”) increased by 19.1% to R6.4 billion (H1 F2021: R5.4 billion).

During the period under review the group generated cash flow from operations amounting to R2.9 billion (H1 F2021: R3.1 billion). Cash generated was impacted by marginally lower sales volumes and higher than inflation cost increases. Sales volumes were impacted by higher inventory levels arising from the planned rebuild and upgrade of furnace 1 during the period, together with the increased pipeline as a result of the introduction of a second precious metal refiner. As at 31 December 2021, inventory on hand amounted to approximately 380 000 oz 4E. Applying the average basket price realised during the period under review, inventory on hand is valued at c. R18.7 billion as at 31 December 2021.

Cash generated was applied towards the composite transaction (as contemplated in the circular to shareholders dated 31 May 2021) and the concomitant repurchase of almost 30% of the shares in issue, resulting in a once-off outflow of cash in excess of R6.6 billion, together with the acquisition of RBPlat shares amounting to a further outflow of R4.1 billion during the period.

The combined impact on cash flows, including an increase in capital expenditure and the significant cash outlay in respect of the accelerated maturity of the Zambezi BEE transaction and concomitant share repurchase, resulted in net debt increasing to R14.3 billion, excluding the deferred portion of the purchase consideration relating to the acquisition of the RBPlat shares, amounting to R5.7 billion as at 31 December 2021 (“outstanding consideration”). As previously communicated to shareholders, Northam is comfortable with a self-imposed long-term net debt to EBITDA ratio of 1 to 1 (“debt ratio”) in the pursuance of the group’s growth strategy. Excluding the outstanding consideration, which relates to a corresponding cash generative underlying asset with no net debt, the debt ratio as at 31 December 2021 (expressed on a rolling twelve month basis) amounted to 0.81. Inclusive of the outstanding consideration, the debt ratio was 1.13. The ongoing release of metal built up ahead of the smelter following the recommissioning of furnace 1, as well as a normalisation of the metal pipeline following the introduction of a second precious metal refiner, combined with the strong current metal price environment and the receipt by Northam of the dividend declared by RBPlat subsequent to the period end (refer below), will contribute to normalising the debt ratio (post settlement of the outstanding consideration) by 31 December 2022.

For the period under review, the group’s share of earnings from RBPlat amounted to R128.4 million (included in EBITDA and calculated for the period from 19 November 2021 until 31 December 2021, adjusted for additional RBPlat shares purchased on-market by Northam during December 2021, as announced on SENS on 7 December 2021). A dividend of R536.2 million was declared in respect of Northam’s shareholding in RBPlat subsequent to the period end and is excluded from the above. As at 31 December 2021, RBPlat reported net cash on hand (after taking into account the RBPlat dividend declaration in respect of this period) of R3.4 billion. This equates to c. R11.60 per RBPlat share currently in issue. 

Investment in RBPlat

During the period under review, Northam made a strategic investment by acquiring a significant shareholding in RBPlat, as published on SENS on 9 November 2021. Further acquisitions of RBPlat shares were announced on 7 December 2021. Shareholders are referred to these announcements for details regarding the investment in RBPlat.

As at 31 December 2021, Northam held 100 219 552 RBPlat shares. As set out in more detail in the 7 December 2021 announcement, Northam has the option to increase its shareholding in RBPlat by purchasing up to a further 6 145 798 RBPlat shares (“option shares”) at R131.56 per share (calculated as at 31 December 2021, including escalation and after taking into account the dividend to be received by RBPlat shareholders).

As at 31 December 2021 and assuming:

• all option shares have been acquired by Northam (as at 31 December 2021, for illustrative purposes); and
• the dividend declared by RBPlat for the period ended 31 December 2021 has been received,

the illustrative net cost per RBPlat share acquired by Northam amounts to R171.58 per share. RBPlat’s reported net cash on hand as at 31 December 2021 (after taking into account the RBPlat dividend declaration in respect of this period) amounted to c. R11.60 per RBPlat share.

Northam believes that its investment in RBPlat holds the potential for substantial long‑term value creation. It provides inherent optionality and its complementary metal mix, with a higher relative platinum contribution, fits well within the broader Northam basket. The RBPlat assets are young, shallow, well-capitalised and occupy a strategically important position in the Western Bushveld.

Capital expenditure

Capital expenditure increased to R2.3 billion (H1 F2021: R1.3 billion). This is the result of the restart of capital projects that had been curtailed following the onset of the COVID-19 pandemic, partially offset by capital projects having either been completed, or being near completion at Booysendal mine. R1.5 billion (H1 F2021: R918.1 million) was spent on expansionary capital expenditure and R776.9 million (H1 F2021: R380.5 million) on sustaining capital expenditure.

The significant increase in sustaining capital expenditure was a result of the planned rebuild and upgrade of furnace 1 together with a number of extensions to strike belts and the first significant fleet replacements at Booysendal.

Expansionary projects that had previously been temporarily scaled back included: the Central Merensky and BS4 modules at Booysendal mine; aspects of the Western extension number 3 shaft project at Zondereinde mine; and the stoping build-up at Eland mine.

Following improved market certainty, all COVID-19 related curtailed growth projects were re-initiated and the majority of workflow impacts resulting from the stoppage were clawed back. As such, the overall impact on the group’s growth strategy has been minimal.

Group capital expenditure for the full financial year is forecasted to amount to approximately R4.6 billion. The potential for further disruption to operations and the metal markets as a result of the COVID-19 pandemic, as well as market disruptions following the invasion of Ukraine by Russia, remain as risks to production and sales. In addition, a risk of regional community unrest on the eastern limb of the Bushveld remains. We continue to monitor the market and will amend the group’s capital program when and where prudent. 

The group continues to execute on its strategy of developing low-cost, long-life assets in order to position itself at the lower end of the industry cost curve. We believe that the development of the group’s project pipeline, which builds on the group’s pre-existing and acquired asset base, is bearing fruit and will continue to position Northam to deliver strong operational performance and financial results.

Conclusion

In summary, whilst the operating environment has been particularly challenging, we believe that the period under review has been important for Northam, given:

• the significant progress made in respect of the group’s organic growth projects;
• the successful acceleration of the maturity of the Zambezi BEE transaction and value unlock for BBBEE;
• the c. 30% share repurchase;
• the establishment of a new group structure and the listing of Northam Holdings; and
• a significant strategic investment in RBPlat, coinciding with the introduction of RBH as an important empowerment shareholder of Northam.

The financial information contained in this announcement is the responsibility of the board of directors of Northam Holdings and has not been reviewed or reported on by Northam’s auditors. The reviewed consolidated results for Northam Holdings for the six months ended 31 December 2021 are expected to be published on or about 31 March 2022.

Johannesburg
24 March 2022

Northam bondholders are advised of the following interest payment due on Monday, 28 February 2022:

Johannesburg
23 February 2022

Debt Sponsor
One Capital

Northam bondholders are advised of the following interest payment due on Thursday, 24 February 2022:

Johannesburg
21 February 2022

Debt Sponsor
One Capital

In accordance with section 122(3)(b) of the Companies Act, No. 71 of 2008 (“Companies Act”), as amended, and paragraph 3.83(b) of the JSE Limited Listings Requirements, Northam Holdings shareholders are advised that the company received notification, in the prescribed form, from Old Mutual Limited (“Old Mutual”), advising that it has acquired a beneficial interest in the securities of Northam Holdings, such that Old Mutual now holds a beneficial interest of 5.01% in the company’s total issued share capital.

The company will file the relevant notification with the Takeover Regulation Panel, as required in terms of section 122(3)(a) of the Companies Act.

Johannesburg
18 February 2022

Corporate Advisor and Sponsor to Northam Holdings
One Capital

Attorneys to Northam Holdings and Northam Platinum
Webber Wentzel

Corporate Advisor and Debt Sponsor to Northam Platinum
One Capital

Shareholders are advised that, with effect from today, Thursday 3 February 2022, Mr Mcebisi Jonas has been appointed as a member of the audit and risk committee. With this appointment, the audit and risk committee comprises Ms Hester Hickey (chairperson), Dr Yoza Jekwa and Mr Mcebisi Jonas, all of whom are independent non-executive directors of the company.

As an interim measure Mr Paul Dunne, the chief executive officer of the company, has been appointed as a member of the social, ethics, human resources and transformation committee (“SEHR&T committee”) pending the appointment of a suitable non‑executive director. The SEHR&T committee now comprises non-executive director Ms Emily Kgosi (chairperson), independent non-executive director Dr Yoza Jekwa and Mr Paul Dunne.

Johannesburg
3 February 2022

Northam bondholders are advised of the following interest payment due on Monday, 17 January 2022:

Johannesburg
12 January 2022