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PLN - Platmin Limited - Results for quarter ended 30 September 2011

Release Date: 07/11/2011 15:00
Code(s): PLN
Wrap Text

PLN - Platmin Limited - Results for quarter ended 30 September 2011 Platmin Limited Incorporated in the accordance with the laws of Canada Registration number: 610178-0 Share code on TSX: PPN Share code on JSE: PLN ISIN: CA72765Y1097 Condensed Consolidated Interim Financial Statements for the three and nine months ended September 30, 2011 and September 30, 2010 (Unaudited, expressed in United States dollars, unless otherwise stated) Condensed consolidated interim statement of financial position as at September 30, 2011 (Unaudited, expressed in U.S. dollars, unless otherwise stated) Sep 30, Dec 31, 2011 2010
Notes $000 $000 ASSETS Non-current assets Mining assets 36,485 49,886 Intangible assets 5 32,981 14,019 Property, plant and equipment 6 490,798 578,550 Loans receivable 57 63 Restricted cash investments and guarantees 8 160,047 84,471 Total non-current assets 720,368 726,989 Current assets Inventories 7 8,776 11,285 Accounts and other receivables 36,969 46,877 Restricted cash 8 - 135,131 Cash and cash equivalents 9 131,898 188,596 Total current assets 177,643 381,889 TOTAL ASSETS 898,011 1,108,878 EQUITY AND LIABILITIES Equity attributable to owners of the parent Share capital 10 891,434 756,579 Accumulated deficit (120,909) (90,419) Other components of equity 51,932 198,352 822,457 864,512 Non-controlling interests (50,155) (30,116) Total equity 772,302 834,396 Non-current liabilities Long-term borrowings 11 14,758 4,710 Finance lease liability 12 7,492 9,410 Decommissioning and rehabilitation provision 13 74,431 70,705 Total non-current liabilities 96,681 84,825 Current liabilities Trade payables and accrued liabilities 21,230 20,747 Revolving commodity facility 14 7,741 3,468 Current portion of finance lease liability 12 57 291 Current portion of long-term borrowings 15 - 31,923 Convertible debenture 16 - 133,228 Total current liabilities 29,028 189,657 Total liabilities 125,709 274,482 TOTAL EQUITY AND LIABILITIES 898,011 1,108,878 NATURE OF OPERATIONS The accompanying notes are an integral part of the condensed consolidated interim financial statements. Condensed consolidated interim statement of income for the three and six months ended September 30, 2011 (Unaudited, expressed in U.S. dollars, unless otherwise stated) For the three months For the nine months ended ended Sep 30, Sep 30, Sep 30, Sep 30, 2011 2010 2011 2010
Notes $000 $000 $000 $000 Revenue 22,559 - 83,086 - Cost of operations 17 (45,024) - (149,081) - Operating loss (22,465) - (65,995) - Administrative and general expenses 18 (7,136) (6,918) (15,642) (16,233) Other income/(expenses) 18 36,749 (17,338) 30,553 (33,754) Finance income 1,374 - 4,848 - Finance costs (1,034) (1,778) (4,293) (5,254) PROFIT/(LOSS) FOR THE PERIOD 7,488 (26,034) (50,529) (55,241) Profit/(Loss) attributable to: Owners of the parent 13,741 (26,910) (30,490) (51,182) Non-controlling interest (6,253) 876 (20,039) (4,059) 7,488 (26,034) (50,529) (55,241) Earnings/(Loss) per share (in currency units) attributable to owners of the parent: Basic and diluted 19 0.02 (0.05) (0.03) (0.09) The accompanying notes are an integral part of the condensed consolidated interim financial statements. Condensed consolidated interim statement of comprehensive income for the three and nine months ended September 30, 2011 (Unaudited, expressed in U.S. dollars, unless otherwise stated) For the three months For the nine months ended ended Sep 30, Sep 30, Sep 30, Sep 30,
2011 2010 2011 2010 Notes $000 $000 $000 $000 Profit/(Loss) for the period 7,488 (26,034) (50,529) (55,241) Other comprehensive income (net of tax) (136,803) 22,445 (160,843) 42,664 Exchange differences on translation from functional to presentation currency (136,803) 22,445 (160,843) 42,664 Income tax relating to components of other comprehensive income - - - - TOTAL COMPREHENSIVE LOSS FOR THE PERIOD (129,315) (3,589) (211,372) (12,577) Total comprehensive profit/( loss) attributable to: Owners of the parent (123,062) (4,465) (191,333) (8,518) Non-controlling interest (6,253) 876 (20,039) (4,059) (129,315) (3,589) (211,372) (12,577) The accompanying notes are an integral part of the condensed consolidated interim financial statements. Condensed consolidated interim statement of changes in shareholders` equity for the nine months ended September 30, 2011 (Unaudited, expressed in U.S. dollars, unless otherwise stated) Equity attributable to the shareholders Share
based Share payment capital Deficit reserve Warrants $000 $000 $000 $000
Balance at December 31, 2009 425,535 (35,002) 10,167 846 Shares issued 241,260 - - - Loss for the period - (51,182) - - Stock-based compensation - - 30,136 - Other comprehensive income: Currency translation adjustment - - - - Balance at September 30, 2010 666,795 (86,184) 40,303 846 Shares issued 89,784 - - - Loss for the period - (4,235) - - Stock-based compensation - - 1,925 - Other comprehensive income: Currency translation adjustment - - - - Balance at December 31, 2010 756,579 (90,419) 42,228 846 Shares issued 134,855 - - - Loss for the period - (30,490) - - Stock-based compensation - - 14,423 - Other comprehensive income: Currency translation adjustment - - - - Balance at September 30, 2011 891,434 (120,909) 56,651 846 Equity attributable to the shareholders
Foreign currency Non- translation controlling Total reserve Subtotal interest equity
$000 $000 $000 $000 Balance at December 31, 2009 71,574 473,120 (20,091) 453,029 Shares issued - 241,260 - 241,260 Loss for the period - (51,182) (4,059) (55,241) Stock-based compensation - 30,136 - 30,136 Other comprehensive income: Currency translation adjustment 42,664 42,664 - 42,664 Balance at September 30, 2010 114,238 735,998 (24,150) 711,848 Shares issued - 89,784 - 89,784 Loss for the period - (4,235) (5,966) (10,201) Stock-based compensation - 1,925 - 1,925 Other comprehensive income: Currency translation adjustment 41,040 41,040 - 41,040 Balance at December 31, 2010 155,278 864,512 (30,116) 834,396 Shares issued - 134,855 - 134,855 Loss for the period - (30,490) (20,039) (50,529) Stock-based compensation - 14,423 - 14,423 Other comprehensive income: Currency translation adjustment (160,843) (160,843) - (160,843) Balance at September 30, 2011 (5,565) 822,457 (50,155) 772,302 Note 10 The accompanying notes are an integral part of the condensed consolidated interim financial statements. Condensed consolidated interim statement of cashflows for the three and nine months ended September 30, 2011 (Unaudited, expressed in U.S. dollars, unless otherwise stated) For the three months For the nine months ended ended
Sep 30, Sep 30, Sep 30, Sep 30, 2011 2010 2011 2010 Notes $000 $000 $000 $000 Cash flows from operating activities Cash receipts from customers 36,577 10,131 88,997 45,884 Cash paid to suppliers and employees (51,436) (45,779) (144,677) (134,054) Cash utilised in operations (14,859) (35,648) (55,680) (88,170) Interest received 514 1,123 1,609 1,859 Interest paid 10 (225) (274) (906) Net cash utilised in operating activities (14,335) (34,750) (54,345) (87,217) Cash flows from investing activities Purchase of property, plant and equipment (3,796) (3,872) (8,063) (4,507) Proceeds from fair value adjustments (2,272) - 2,478 - Purchase of Sedibelo West - - (79,666) - Additions to intangible assets (6) 81 (12,505) (1,096) Increase in rehabilitation investment (438) - (6,334) - Increase in cash investments - (48,538) - (65,497) Increase in deferred exploration expenses (2,820) (68) (3,629) (983) Net cash utilised in investing activities (9,332) (52,397) (107,719) (72,083) Cash flows from financing activities Increase in loans payable - - - 25,708 Decrease in finance lease liability (463) (460) (1,389) (1,371) Increase/(Decrease) in revolving commodity facility (3,032) 7,260 3,443 3,445 Realised foreign exchange (losses) / gains (19) - (1,389) (2) Repayment of promissory note - - (29,106) - Proceeds from issue of shares - (265) 130,797 241,256 Net cash generated from financing activities (3,514) 6,535 102,356 269,036 Net (decrease) / increase in cash and cash equivalents (27,181) (80,612) (59,708) 109,736 Net foreign exchange differences (981) (1,237) 3,010 (8,029) Cash and cash equivalents at the beginning of the period 9 160,060 212,931 188,596 29,375 Cash and cash equivalents at the end of the period 9 131,898 131,082 131,898 131,082 The accompanying notes are an integral part of the condensed consolidated interim financial statements. Notes to the condensed consolidated interim financial statements for the three and nine months ended September 30, 2011 (Unaudited, expressed in U.S. dollars, unless otherwise stated) 1. Nature of operations Platmin Limited ("the Company") and its subsidiaries ("the Group") is a Natural Resources Group engaged in the acquisition, exploration, development and operation of Platinum Group Elements ("PGE") properties in the Republic of South Africa. The Company was incorporated under the Canada Business Corporation Act on May 29, 2003. The Company has continued as a company under the Business Corporations Act of British Columbia, Canada, effective April 1, 2009. Its Common Shares are listed on the Toronto Stock Exchange ("TSX"). The Company trades under the symbol "PPN" on both exchanges. On July 22, 2009, the Company listed on the Johannesburg Securities Exchange Limited ("JSE") under the symbol "PLN". These condensed consolidated interim financial statements have been prepared using International Financial Reporting Standards ("IFRS") applicable to a going concern, which contemplates the realisation of assets and settlement of liabilities in the normal course of business as they become due. For the three and nine months ended September 30, 2011 the Group incurred a profit/(loss) of US$7.488 million and (US$50.529) million. At September 30, 2011 had an accumulated deficit of US$120.909 million. The Group is dependent on the successful operation of the Pilanesberg Platinum Mine ("PPM") to generate cash flows in order to fund its operations and pay debt as it becomes due. The Group increased its equity by US$135.000 million by way of conversion of the convertible debenture on March 31, 2011 and had US$131.898 million in cash and cash equivalents at September 30, 2011 to fund mining activities and meet its contractual obligations. 2. Statement of compliance The unaudited condensed consolidated interim financial statements for the three and nine months ended September 30, 2011 have been prepared in accordance with the recognition and measurement requirements of IFRS and the presentation and disclosure requirements of International Accounting Standard ("IAS") 34 Interim Financial Reporting. These interim results do not include all the information required for the full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended December 31, 2010. The unaudited condensed consolidated interim financial statements, which have been prepared on the going concern basis, were approved by the Board of Directors on 2 November 2011. The financial statements are presented in US dollars, rounded to the nearest thousand. 3. Accounting policies The accounting policies applied by the Group in these unaudited condensed consolidated interim financial statements are consistent with those applied by the Group in its consolidated financial statements as at and for the year ended December 31, 2010. Upon declaring commercial production on January 1, 2011, the useful life of assets has been calculated in accordance with the table as detailed below. Property, plant and equipment Depreciation and amortisation are calculated on a units-of-production method for the mining assets and straight-line method for all other assets to write off the cost of the assets to their residual values over their estimated useful lives. The depreciation and amortization rates applicable to each category of property, plant and equipment are as follows: Useful life Asset category (years) Vehicles 5 Computer equipment 3 Office equipment 6 Furniture and fittings 6 Other equipment 5 Buildings 20 Leasehold improvements 5 Plant and equipment Units of production (ore tonnes processed) Deferred stripping costs, decommissioning assets Units of production (ore tonnes mined) Producing mines (exploration and evaluation assets) Units of production (ore tonnes mined) 4. Segmented information Management has determined the operating segments based on the reports reviewed by the Executive Committee ("the Committee") that are used to make strategic decisions. The Committee considers the business from an operating perspective. The Group operates in one geographic segment, the Republic of South Africa. The operating segments comprise the following: Mining operation: PPM declared commercial production on January 1, 2011. This mine is involved in the mining and processing of platinum group elements. Development and exploration operations: The Group is engaged in a number of other development and exploration projects within the Republic of South Africa. Administrative operations: The Group administration is done at the local corporate office based in Centurion, the Metropolitan City of Tshwane in the Republic of South Africa. Although the development and exploration as well as administrative operations do not meet the quantitative thresholds required by IFRS 8 - Segment reporting, management has concluded that these segments should be reported, as they are of a reportable segment. The development and exploration segment is earmarked as the growth area for the Group. The segment information provided to the committee for the reportable segments for the nine-month periods ended is as follows: Development and Mining exploration Sep 30, Sep 30, Sep 30, Sep 30,
Amounts in $ `000 2011 2010 2011 2010 Reportable items in the Statement of Comprehensive Income External revenues 83,086 51,332 - - Intersegment revenue - - - - EBITDA (53,576) (72,400) - - Reportable items in the Statement of Financial Position Total assets 674,272 685,626 55,351 42,989 Additions to non-current assets 24,927 95,552 21,197 139,261 Total liabilities (103,628) (155,409) (14,821) (4,440) Administration Consolidated Sep 30, Sep 30, Sep 30, Sep 30,
Amounts in $ `000 2011 2010 2011 2010 Reportable items in the Statement of Comprehensive Income External revenues - - 83,086 51,332 Intersegment revenue - - - - EBITDA (25,176) (33,038) (78,752) (105,438) Reportable items in the Statement of Financial Position Total assets 168,388 282,492 898,011 1,011,107 Additions to non-current assets 76,635 917 122,759 235,730 Total liabilities (7,260) (139,410) (125,709) (299,259) The amounts provided to the committee with respect to total assets and total liabilities are measured in a manner consistent with that of the consolidated financial statements. These assets and liabilities are allocated based on the operations of the segment. There were no impairments during the current or prior reportable periods. Additions to non-current assets include all additions to mining assets, intangible assets and property, plant and equipment. A reconciliation of EBITDA to total comprehensive loss for the nine-month period is provided as follows: Consolidated
Sep 30, Sep 30, 2011 2010 $000 $000 Total EBITDA for reportable segments (78,752) (105,438) Revenues offset against the cost of the plant construction - (51,332) Mining costs offset against the cost of the plant construction - 117,004 Total EBITDA per consolidated statement of income and comprehensive income (78,752) (39,766) Foreign exchange gains 44,975 (9,795) Depreciation (17,307) (426) Finance costs (net) 555 (5,254) Loss before taxation (50,529) (55,241) Income tax expense - - Exchange differences on translating from functional currency to presentation currency (160,843) 42,664 Total comprehensive loss for the period (211,372) (12,577) 5. Intangible assets As at Sep 30, As at Dec 31,
2011 2010 $000 $000 Water pipeline 11,105 13,070 ERP software 642 886 Computer software 37 63 SPV - Power and water rights 21,197 - Balance at the end of the period 32,981 14,019 Reconciliation of intangible assets: Water ERP Computer pipeline Software software $000 $000 $000 COST Balance as at December 31, 2009 8,479 772 354 Additions during the period 1,228 169 43 Reclassified from receivables 2,064 - - Foreign exchange variance 1,299 91 41 Balance as at December 31, 2010 13,070 1,032 438 Additions during the period 357 - 11 Foreign exchange variance (2,322) (180) (78) Balance as at September 30, 2011 11,105 852 371 ACCUMULATED DEPRECIATION Balance as at December 31, 2009 - - 257 Depreciation for the period - 132 79 Foreign exchange variance - 14 39 Balance as at December 31, 2010 - 146 375 Depreciation for the period - 103 28 Foreign exchange variance - (39) (69) Balance as at September 30, 2011 - 210 334 CARRYING AMOUNTS Balance as at December 31, 2010 13,070 886 63 Balance as at September 30, 2011 11,105 642 37 Power and
water rights TOTAL $000 $000 COST Balance as at December 31, 2009 - 9,605 Additions during the period - 1,440 Reclassified from receivables - 2,064 Foreign exchange variance - 1,431 Balance as at December 31, 2010 - 14,540 Additions during the period 24,566 24,934 Foreign exchange variance (3,369) (5,949) Balance as at September 30, 2011 21,197 33,525 ACCUMULATED DEPRECIATION Balance as at December 31, 2009 - 257 Depreciation for the period - 211 Foreign exchange variance - 53 Balance as at December 31, 2010 - 521 Depreciation for the period - 131 Foreign exchange variance - (108) Balance as at September 30, 2011 - 544 CARRYING AMOUNTS Balance as at December 31, 2010 - 14,019 Balance as at September 30, 2011 21,197 32,981 PPM entered into an agreement with The Board of Magalies Water, a State-owned water board operating under the Water Services Act, Number 108 of 1997, as amended, ("Magalies Water") and other parties to build a water pipeline and related infrastructure from the Vaalkop Water Treatment Works to PPM. Upon completion, the ownership of the water pipeline and related infrastructure will remain with Magalies Water; however, PPM will have a right to use 9Ml a day through the pipeline for the entire life of mine. Platmin concluded, through a special purpose vehicle ("SPV") in which Platmin indirectly holds a 50% interest, to purchase certain long lead items. These long lead items, consisting of the power and water rights and obligations previously acquired by Barrick Platinum SA (Pty) Ltd ("Barrick") in respect of the Sedibelo mining area, form part of the Platmin acquisition of a portion of the Sedibelo PGM Project concession ("Sedibelo West"). The acquisition consideration for the transaction was US$24.050 million. 6. Property, plant and equipment Plant construction Deferred and mine Plant and stripping
development equipment cost $000 $000 $000 COST Balance as at December 31, 2009 407,789 - - Additions 107,008 - - Transfers (23) - - Foreign exchange movement 48,107 - - Balance as at December 31, 2010 562,881 - - Transfers (562,881) 235,501 258,750 Transfers from mining assets - - - Revenue adjustments - (2,478) - Additions - 6,073 - Foreign exchange movement - (40,683) (45,045) Balance as at September 30, 2011 - 198,413 213,705 ACCUMULATED DEPRECIATION Balance as at December 31, 2009 - - - Depreciation for the period - - - Foreign exchange movement - - - Balance as at December 31, 2010 - - - Depreciation for the period - 8,782 6,765 Foreign exchange movement - (1,115) (858) Balance as at September 30, 2011 - 7,667 5,907 Decom- missioning Producing Land and
asset mines buildings $ 000 $ 000 $ 000 COST Balance as at December 31, 2009 - - 1,025 Additions - - 55 Transfers - - - Foreign exchange movement - - 120 Balance as at December 31, 2010 - - 1,200 Transfers 68,630 - - Transfers from mining assets - 9,639 - Revenue adjustments - - - Additions 15,132 - 275 Foreign exchange movement (11,947) (1,678) (207) Balance as at September 30, 2011 71,815 7,961 1,268 ACCUMULATED DEPRECIATION Balance as at December 31, 2009 - - - Depreciation for the period - - - Foreign exchange movement - - - Balance as at December 31, 2010 - - - Depreciation for the period 490 252 7 Foreign exchange movement (61) (32) (1) Balance as at September 30, 2011 429 220 6 Leased Other assets TOTAL
$000 $000 $000 COST Balance as at December 31, 2009 1,899 12,991 423,704 Additions 561 - 107,624 Transfers 23 - - Foreign exchange movement 224 1,531 49,982 Balance as at December 31, 2010 2,707 14,522 581,310 Transfers - - - Transfers from mining assets - - 9,639 Revenue adjustments - - (2,478) Additions 790 - 22,270 Foreign exchange movement (470) (2,528) (102,558) Balance as at September 30, 2011 3,027 11,994 508,183 ACCUMULATED DEPRECIATION Balance as at December 31, 2009 759 474 1,233 Depreciation for the period 442 821 1,263 Foreign exchange movement 122 142 264 Balance as at December 31, 2010 1,323 1,437 2,760 Depreciation for the period 360 642 17,298 Foreign exchange movement (276) (330) (2,673) Balance as at September 30, 2011 1,407 1,749 17,385 Plant construction Deferred and mine Plant and stripping
development equipment cost $000 $000 $000 CARRYING AMOUNTS At December 31, 2010 562,881 - - At September 30, 2011 - 190,746 207,798 Decom- missioning Producing Land and asset mines buildings
$000 $000 $000 CARRYING AMOUNTS At December 31, 2010 - - 1,200 At September 30, 2011 71,386 7,741 1,262 Leased Other assets TOTAL $000 $000 $000 CARRYING AMOUNTS At December 31, 2010 1,384 13,085 578,550 At September 30, 2011 1,620 10,245 490,798 7. Inventories As at Sep 30, As at Dec 31,
2011 2010 $000 $000 At cost Ore stockpiled 4,039 4,424 Work in progress 761 2,258 Consumables 3,976 4,603 Balance at the end of the period 8,776 11,285 8. Restricted cash 8.1 Restricted cash investments and guarantees - non-current asset Cash investments were made relating to certain guarantees required by the Republic of South Africa`s Department of Mineral Resources ("DMR"), formerly known as the Department of Minerals and Energy, and ESKOM Holdings Limited ("ESKOM"), the South African state utility supplier of electricity, of which the details are as follows: Rehabilitation guarantees The DMR requires rehabilitation guarantees for all prospecting and mining rights. These rehabilitation guarantees primarily relate to the mining rights for the Pilanesberg and Mphahlele Projects. These guarantees have been provided to the DMR on two separate basis: - by the issuance of the guarantee by an insurance company, with a portion of the total guarantee being paid over into a separate bank account of the Group and ceded in favour of the insurance company and the remaining portion paid in premiums to the insurance company over the expected life of the mine; and - on a cash backed basis. ESKOM guarantees On June 17, 2008 a guarantee was issued by Lombard Insurance Company Limited ("Lombard Insurance"), to ESKOM to order critical long lead time material for the construction of the electrical substation at PPM. Lombard Insurance required cash collateral on a portion of the guarantee. The cash collateral is held in a separate bank account controlled by the Group and ceded in favour of Lombard Insurance. The balance of the amount guaranteed by Lombard Insurance is payable on a premium basis over five years and re-assessed on an annual basis. Escrow On March 23, 2011, the Company entered into a transaction to acquire Sedibelo West from the Bakgatla-Ba-Kgafela Tribe and Itereleng Bakgatla Mineral Resources (Pty) Limited, for an aggregate consideration of US$75.000 million in cash. The total purchase price of US$82.000 million (including VAT of US$7.000 million on a portion of the purchase price) was classified as restricted cash in anticipation of the transferring thereof to a nominated Escrow account. As at Sep 30, As at Dec 31, 2011 2010 $000 $000
Pilanesberg rehabilitation guarantee 70,273 76,430 ESKOM capital and supply guarantees 6,708 6,856 Mphahlele rehabilitation guarantee 1,054 1,077 Other guarantees 89 108 Escrow account for Sedibelo transaction 81,923 - Balance at the end of the period 160,047 84,471 8.2 Restricted cash - current asset As at Sep 30, As at Dec 31,
2011 2010 $000 $000 Cash collateral for convertible debentures - 135,131 Balance at the end of the period - 135,131 On May 13, 2010, the Company issued US$135.000 million of convertible debentures. The cash collateral represents the funds received and the interest accrued thereon to date. The debentures were converted on March 31, 2011. 9. Cash and cash equivalents As at Sep 30, As at Dec 31, 2011 2010 $000 $000 Cash at bank and on hand 131,898 Total cash and cash equivalents 131,898 1 Cash at bank earns interest at a floating rate based on daily bank deposit rates. Cash is deposited at reputable financial institutions of a high quality credit standing within the Republic of South Africa and their foreign affiliates in the United Kingdom. The fair value of cash and cash equivalents equates the values as disclosed in this note. For the purpose of the condensed consolidated interim statement of cash flows, cash and cash equivalents comprise only the cash at bank and on hand line-item as disclosed for each period end above. 10. Share capital a) Common shares authorised The Company has an unlimited number of common shares with no par value. b) Common shares issued Number of Amount Movement during the year ended December 31, 2010 shares $000 Balance, January 1, 2010 445,018,352 425,535 Common shares issued 304,662,415 331,044 Balance, December 31, 2010 749,680,767 756,579 Movement during the period ended September 30, 2011 Balance, January 1, 2011 749,680,767 756,579 Common shares issued 160,714,286 134,855 Balance, September 30, 2011 910,395,053 891,434 On March 31, 2011, upon conversion of the convertible debenture issued on May 13, 2010, the Company issued 160,714,286 new common shares at a price of US$0.84 per common share for a total consideration of US$135.000 million, raising US$134.855 million net of legal fees. 11. Long-term borrowings As at Sep 30, As at Dec 31,
2011 2010 $000 $000 Corridor Mining Resources (Pty) Ltd 4,134 4,681 Perilya Exploration (Pty) Ltd 26 29 SPV - Power and water rights 10,598 - 14,758 4,710 The acquisition consideration for the long lead items purchased from Barrick by the SPV (as disclosed in note 5) was funded through shareholder loans advanced to the SPV. Platmin`s portion of these loans amounted to US$12,025 million. The remaining shareholder`s portion is US$10,598 million at the closing rate of ZAR7.9806 to US$1.00. 12. Finance lease liability ESKOM designed and built an electrical installation adjacent to PPM to produce the required electricity and maintains ownership and control over all significant aspects of operating the facility. Each month, PPM will pay a fixed capacity charge and a variable charge based on actual electricity consumed. These payments attract interest at the South African prime overdraft rate plus 2%. The arrangement with ESKOM, entered into during the period under review meet these requirements of IFRIC 4 - Arrangements containing a lease, and therefore constitutes a lease and falls within the scope of IAS 17 - Leases and is further classified as a finance lease due to the sub-station being constructed exclusively for the use of PPM. An asset (the electrical installation) is explicitly identified in the arrangement and fulfilment of the arrangement is dependent on the electrical installation. Reconciliation between the total minimum lease payments and their present value: Up to More than
1 year 1 to 5 years 5 years Total $000 $000 $000 $000 Minimum lease payments 303 6,062 9,984 16,349 Finance cost (246) (4,430) (4,124) (8,800) Present value 57 1,632 5,860 7,549 13. Decommissioning and rehabilitation provision As at As at Sep 30, Dec 31,
2011 2010 $000 $000 Balance at the beginning of the period 70,705 52,744 Increase in liability for the period 15,001 10,435 Unwinding of interest (accretion) 1,033 1,307 86,739 64,486 Effect of exchange rate changes (12,308) 6,219 Balance at the end of the period 74,431 70,705 The estimate represents the discounted current cost of environmental liabilities as at the respective period end. An annual estimate of the quantum of closure costs is necessary in order to fulfil the requirements of the DMR, as well as meeting specific closure objectives outlined in the mine`s Environmental Management Programme. Although the ultimate amount of the asset retirement obligation is uncertain, the fair value of the obligation is based on information that is currently available. The estimated undiscounted liability for the asset retirement obligation at September 30, 2011 is US$89.995 million (December 31, 2010: US$86.667 million). This estimate includes costs for the removal of all current mine infrastructure and the rehabilitation of all disturbed areas to a condition as described in the mine`s Environmental Management Programme. The asset retirement obligation has been determined using a discount rate of 7.95% and an inflation rate of 6% over a period of 12 years. 14. Revolving commodity facility On October 9, 2009, the Company signed a definitive agreement with Investec Bank Limited ("Investec") to provide a 12 month renewable revolving commodity finance facility of up to ZAR400 million (US$54.420 million at an exchange rate of ZAR7.35: US$1.00) for working capital purposes. In terms of this facility Investec will finance up to 91% of PPM`s platinum, palladium, gold, copper and nickel deliveries to Northam Platinum Limited. This facility bears interest at the Johannesburg Interbank Lending Rate ("JIBAR") plus 3.0% and is repaid within two to three months upon which the funds are again available for draw-down. As at Sep 30, As at Dec 31, 2011 2010 $000 $000 Balance at the beginning of the period 3,468 5,854 Increase in liability for the period 39,940 - Repayment of amounts owing (32,899) (2,684) Interest accrued (85) (48) 10,424 3,122
Effect of exchange rate changes (2,683) 346 Balance at the end of the period 7,741 3,468 15. Current portion of long-term borrowings As at Sep 30, As at Dec 31,
2011 2010 $000 $000 Balance at the beginning of the period 31,923 - - Pallinghurst short-term facility - 26,603 Interest on borrowings 365 1,620 Settlement of borrowings (28,822) - 3,466 28,223 Effect of exchange rate changes (3,466) 3,700 Balance at the end of the period - 31,923 On March 22, 2010, a subsidiary of Platmin entered into a ZAR191.000 million short-term lending facility (the equivalent of US$26.000 million at an exchange rate of ZAR7.38 to the US dollar) with Pallinghurst Resources Limited ("Pallinghurst"). As at December 31, 2010, a total of ZAR191.000 million had been drawn against this facility. This facility was initially for a period of three months, but was extended until February 28, 2011 and was repaid in full on February 28, 2011. 16. Convertible debenture Option component accounted for Liability
in equity component $000 $000 Convertible debenture issued 26,664 132,044 Fair value adjustment at extension date 1,238 (1,060) Interest for the period - 3,241 Transaction costs - (1,128) Effect of exchange rate changes - 131 Balance as at December 31, 2010 27,902 133,228 Fair value adjustment at extension date 7,908 - Fair value adjustment at modification date 6,556 - Interest for the period - 976 42,366 134,204
Effect of exchange rate changes - 796 Conversion of debenture - (135,000) Balance as at September 30, 2011 42,366 - On May 13, 2010, the Company issued US$135.000 million of zero percent convertible debentures, initially subject to conversion by December 31, 2010 at a price of US$1.215 that would have resulted in 111,111,111 shares being issued. The maturity date of the convertible debentures was extended from December 31, 2010 to February 28, 2011 and subsequently to March 31, 2011, and the conversion price reduced from US$1.215 to US$0.84. On March 31, 2011, all the conditions precedent for the conversion of the convertible debentures had been fulfilled and conversion took place at US$0.84 per share. A total of 160,714,286 new shares were issued. The transaction was accounted for under IFRS 2, Share based payments as the fair value of the convertible debenture was greater than the proceeds received. On initial recognition, the transaction gave rise to the recognition of proceeds of US$135 million, a liability component recognised for the present value of the contractual cash payments of US$132 million and an equity component of US$26.6 million. The difference between the proceeds and liability plus the equity was recognised in the income statement. The modifications to the instrument resulted in the equity component moving to US$42 million. Subsequent to the initial recognition, the equity portion is not remeasured and remains in equity. 17. Cost of operations Included in cost of operations: For the three months For the nine months ended ended Sep 30, Sep 30, Sep 30, Sep 30, 2011 2010 2011 2010
$000 $000 $000 $000 On mine operations Materials and mining costs 25,108 - 83,382 - Concentrator plant operations Materials and other costs 13,124 - 31,060 - Utilities 3,409 - 9,273 - Beneficiation Smelting and refining costs 1,941 - 6,404 - Transport 58 - 235 - Salaries 928 - 2,854 - Sub-total 44,568 - 133,208 - Depreciation of operating assets (note 6) 4,480 - 16,791 - Change in inventories (4,024) - (918) - 45,024 - 149,081 - 18. Administrative and general expenses For the three months For the nine months ended ended Sep 30, Sep 30, Sep 30, Sep 30, 2011 2010 2011 2010
$000 $000 $000 $000 Included in the administrative and general expenses are the following: Audit fees (197) 21 (398) (401) Consulting and professional fees(3,229) (252) (4,753) (447) Employee expenses (1,331) (2,134) (4,587) (6,497) General and administration expenses (592) (1,986) (1,645) (4,910) Royalty taxes (162) (73) (463) (195) Mining operations (1,258) - (3,176) - Sub-total (6,769) (4,424) (15,022) (12,450) Share-based payment expense (213) (2,346) (104) (3,357) Amortisation and depreciation (154) (148) (516) (426) (7,136) (6,918) (15,642) (16,233) Included in other income/ (expenses) are the following: Foreign exchange gain / (loss) 36,539 (17,090) 44,975 (9,795) Loss on impairment of exploration project - (37) - (292) Other income 23 2 200 1 Share-based payment expense (fair value adjustment) 187 (213) (14,622) (23,668) 36,749 (17,338) 30,553 (33,754)
19. Earnings/(Loss) per share attributable to owners of the parent For the three months For the nine months ended ended Sep 30, Sep 30, Sep 30, Sep 30,
2011 2010 2011 2010 Basic earnings/(loss) per share (USD) 0.02 (0.05) (0.03) (0.09) Basic earnings/(loss) per share is calculated by dividing the net loss for the period/year attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the period/year Reconciliations: Net profit/(loss) used in calculating basic earnings per share attributable to owners of the parent (USD`000) 13,741 (26,910) (30,490) (51,182) Weighted average number of shares used in the calculation of basic earnings/(loss) per share (`000) 910,395 513,605 874,681 559,330 The potential ordinary shares had no effect on the basic earning per share for the three-month period ended September 30, 2011 and the diluted earnings per share is equal to the basic earnings per share. Due to the Group reporting a loss for the nine-month period ending September 30, 2011 the diluted loss per share is equal to the basic loss per share. Date: 07/11/2011 15:00:02 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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