Wrap Text
Revised Restructure plan announced
Atlatsa Resources Corporation
(previously Anooraq Resources Corporation)
(Incorporated in British Columbia, Canada)
(Registration number 10022-2033)
(TSXV/JSE share code: ATL)
(NYSE MKT share code: ATL)
(“Atlatsa” or the “Company”)
(ISIN: CA0494771029)
Revised Restructure plan announced
Lower-risk operating plan, less capital intensive and sustainable financing plan for Atlatsa
27 March 2013. Atlatsa Resources Corporation (Atlatsa or the Company) (TSXV: ATL; NYSE MKT:
ATL; JSE: ATL) is pleased to announce that, together with Anglo American Platinum (Anglo Platinum),
the parties have entered into definitive agreements to implement a revised restructure, recapitalization
and refinancing plan for Atlatsa and the Bokoni group of companies (“the revised restructure plan”).
The revised restructure plan follows a detailed strategic review that was undertaken in 2012 by the new
management team at Bokoni Mine, in conjunction with Anglo Platinum and Atlatsa. The review included
all technical, operational and financing assumptions informing the existing mine extraction and financing
strategy, having regard to the general outlook for the platinum group metals (PGMs) industry.
Harold Motaung, Chief Executive Officer of Atlatsa, added “on implementation of the revised plan,
Atlatsa will be well positioned to implement our business strategy on a more conservative, low-risk and
sustainable basis. Importantly, the plan will create a Company that is well-funded, with strong BEE
ownership.”
Joel Kesler, Chief Commercial Officer commented further: ”The new operating plan includes lower-cost,
open cast project opportunities, which will enable Bokoni Mine to fill its installed processing capacity in
the near term, while underground mining operations build up to 160,000tpm, again in a low-risk and
less capital-intensive manner. Capital expenditure of some ZAR2.3 billion associated with UG2
expansions at Bokoni Mine has been deferred, thereby reducing the anticipated debt burden for Atlatsa
through to 2020. As a result, an estimated 70% of the total production will come from the Merensky
reef. Our focus now is on ensuring Bokoni Mine operates safely and profitably for the benefit of all our
stakeholders.”
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release. The NYSE MKT LLC has neither approved nor disapproved the contents of this press release.
Key highlights of the revised restructure plan include:
- a new, more conservative operating and financing plan at Bokoni Mine;
- a simplified capital structure, by unwinding all preference share structures allowing for one class
of Atlatsa common shares going forward;
- a 75% reduction in Atlatsa’s overall attributable debt from ZAR3.28 billion (US$386.38 million) to
ZAR833 million (US$98.13 million) as at 31 December 2012;
- an equity capital injection of ZAR750 million (US$88.35 million) by Anglo Platinum subscribing
for 125 million new Atlatsa common shares at ZAR6.00 per share (US$0.71);
- an increase in Atlatsa’s BEE shareholding from 51% to 62% allowing for equity financing
flexibility into the future;
- ZAR700 million (US$82.46 million) credit facility available to finance the new operating plan at
Bokoni Mine; and
- reduced cost of borrowing by 85% from 13% to 2% over the debt term period between 2013 and
2020.
A full terms announcement, containing a detailed description of the revised restructure plan, was
released today, 27 March 2013, and is available on the Company website at
www.atlatsaresources.co.za and under the Company’s profile on SEDAR. The reader is also referred to
the news releases dated 2 February 2012, 27 September 2012 and 2 October 2012 concerning the
completion of the interim implementation arrangements relating to the consolidation of the Bokoni
Group debt and consequent reduction in its cost of borrowing.
A new Bokoni Mine operating plan
The Bokoni Mine operating plan to 2020 has been aligned with installed processing capacity and will be
scaled at 160,000 tonnes per month (tpm). Accordingly, material capital expenditure associated with the
proposed UG2 expansion plans at Bokoni Mine (estimated at ZAR2.3 billion (US$270.94 million)) has
been deferred beyond 2020. In an effort to reduce unit operating costs, open cast project opportunities
at Bokoni Mine have been identified and, subject to final regulatory approvals, will be exploited from
2013 onwards. This will allow Bokoni Mine to meet its processing capacity in the near term, while
underground mining operations build up from the current 100,000tpm to 160,000tpm over the next five
years. The plan is considered both low risk and less capital intensive. On achieving the new plan,
Bokoni Mine will increase its annual production from its current base of approximately 115,000 PGM
ounces per annum to approximately 250,000 PGM ounces per annum over the next five years.
The operating plan will result in Bokoni Mine becoming a predominantly Merensky reef producer,
accounting for 70% of its total estimated production.
Recapitalization and refinancing
The revised restructure plan includes a series of debt and equity restructuring and refinancing
transactions, which results in a significant reduction in the Company’s debt, a simplified capital structure
and sufficient flexibility to raise additional equity financing in the future without diluting its BEE
shareholding below a 51% threshold.
Asset sales
The revised restructure plan will result in the sale by Atlatsa of certain mineral assets, representing an
estimated undeveloped 31.4 million PGM ounces to Anglo Platinum, comprising the eastern section of
the Ga-Phasha project and the entire Boikgantsho project for a purchase consideration of ZAR1.7
billion (US$200.26 million). These funds will be applied by Atlatsa to reduce its group debt.
Debt restructure and refinancing
On implementation of the revised restructure plan, Atlatsa’s attributable debt will reduce by 75% from
ZAR3.28 billion (US$386.38 million) to ZAR833 million (US$98.13 million) as at 31 December 2012 and
Anglo Platinum will extend to Atlatsa additional credit of ZAR700 million to finance its 51% pro rata
share of capital expenditure associated with the new operating plan at Bokoni Mine to the extent
required. The total debt facility (including capitalized interest) to be made available by Anglo Platinum to
Atlatsa will be limited to ZAR1.55 billion (US$182.54 million). Atlatsa’s cost of borrowing will be reduced
by 85% from an estimated effective annual interest rate of 13% to 2% over the debt term between 2013
and 2020.
The net effect of the asset sales and debt restructure for Atlatsa is a 75% reduction in the Company’s
attributable debt as at 31 December 2012 through a series of transactions, summarized as follows:
Description ZAR US$
Atlatsa debt balance as at 31 December, 3.28 billion 367.2 million
2012
Atlatsa sale of mineral assets, comprising the (1.7 billion) (190.2 million)
Eastern section of Ga-Phasha and
Boikgantsho to Anglo American Platinum
Anglo American Platinum subscribes for 125 (0.75 billion) (83.9 million)
million new shares in the Company for an
aggregate subscription price of ZAR 750
million and subscription proceeds are used
by Atlatsa to further reduce its debt
Reduced Atlatsa debt balance as at 31 0.83 billion 93.2 million
December 2012
Equity restructure
The parties have agreed to unwind the “B” preference share structure and simplify Atlatsa’s capital
structure to one class of common shares. Anglo Platinum will subsequently sell its 115.8 million
common shares in Atlatsa, arising from the unwinding of the “B” preference shares, to Atlatsa Holdings
for ZAR463 million (US$54.54 million) through a vendor finance loan. Pursuant to such sale, Atlatsa
Holdings will increase its shareholding in Atlatsa from 51% to 62%, thereby creating additional equity
financing flexibility for Atlatsa, whilst still maintaining a 51% BEE majority shareholding in the company
if required.
The new capital structure results in an equity capital injection into Atlatsa of ZAR750 million (US$88.35
million) by Anglo Platinum subscribing for 125 million new common shares in Atlatsa at ZAR6.00 per
share (US$0.71), the proceeds of which will be used to further reduce Atlatsa’s outstanding debt.
Subsequent to the implementation of the equity restructure Atlatsa’s fully diluted shares in issue will
increase to 555 million shares outstanding, with its shareholding reflected as follows:
Shareholder No. of shares % of share capital
Atlatsa Holdings (BEE) 343 million 61.9%
Anglo American Platinum 125 million 22.6%
Employee, Community 87 million 15.5%
Trusts and Public
Total 555 million 100%
The revised restructure plan remains subject to a number of conditions precedent, including
disinterested shareholder, regulatory and stock exchange approvals as required.
The revised restructure plan includes related party transactions for the Company pursuant to
Multilateral Instrument 61-101. Additional information with respect to such transactions will be included
in the Company’s material change report to be filed with respect to such transactions and the
Company’s information circular to be delivered to the Company’s shareholders in connection with the
shareholder meeting to approve such transactions.
Johannesburg
27 March 2013
JSE Sponsor
Macquarie First South Capital
For further information:
On behalf of Atlatsa Resources Russell and Associates Macquarie First South Capital
Joel Kesler, Chief Commercial Officer Charmane Russell Annerie Britz / Yvette Labuschagne
Office: +27 11 779 6800 Office: +27 11 880 3924 Office: +27 11 583 2000
Mobile: +27 82 454 5556 Mobile: +27 82 3725816
Cautionary and forward-looking information
This document contains “forward-looking statements” that were based on Atlatsa’s expectations,
estimates and projections as of the dates as of which those statements were made, including
statements relating to the Bokoni Group revised restructure plan or operational performance.
Generally, these forward-looking statements can be identified by the use of forward-looking terminology
such as “may”, “will”, “outlook”, “anticipate”, “project”, “target”, “believe”, “estimate”, “expect”, “intend”,
“should” and similar expressions.
Atlatsa believes that such forward-looking statements are based on material factors and reasonable
assumptions, including the following assumptions: the revised restructure plan completed in a timely
manner; the Bokoni Mine will achieve production levels as set out in the new operating plan; contracted
parties provide goods and/or services on the agreed timeframes; equipment necessary for construction
and development is available as scheduled and does not incur unforeseen breakdowns; no material
labour slowdowns or strikes are incurred; plant and equipment functions as specified; geological or
financial parameters do not necessitate future mine plan changes; and no geological or technical
problems occur.
Forward-looking statements are subject to known and unknown risks, uncertainties and other factors
that may cause the Company’s actual results, level of activity, performance or achievements to be
materially different from those expressed or implied by such forward-looking statements. These include
but are not limited to:
- uncertainties related to the receipt of the necessary shareholder, stock exchange and
regulatory approvals and satisfaction of other conditions to the completion of the revised
restructure plan in a timely manner, if at all;
- uncertainties related to the completion of the revised restructure plan transactions in a timely
manner;
- uncertainties related to expected production rates, timing of production and the cash and
total costs of production and milling;
- operating and technical difficulties in connection with mining development activities;
- changes in general economic conditions, the financial markets and in the demand and
market price for gold, copper and other minerals and commodities, such as diesel fuel, coal,
petroleum coke, steel, concrete, electricity and other forms of energy, mining equipment,
and fluctuations in exchange rates,
- particularly with respect to the value of the U.S. dollar, Canadian dollar and South African
rand;
- changes in accounting policies and methods we use to report our financial condition,
including uncertainties associated with critical accounting assumptions and estimates;
environmental issues and liabilities associated with mining including processing and stock
piling ore;
- geopolitical uncertainty and political and economic instability in countries which we operate;
and
- labour strikes, work stoppages, or other interruptions to, or difficulties in, the employment of
labour in markets in which we operate mines, or environmental hazards, industrial accidents
or other events or occurrences, including third party interference that interrupt the production
of minerals in our mines.
For further information on Atlatsa, investors should review the Company’s annual Form 20-F filing with
the United States Securities and Exchange Commission www.sec.gov and annual information form for
the year ended December 31, 2012 and other disclosure documents that are available on SEDAR at
www.sedar.com.
Date: 27/03/2013 01:01:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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