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Atlatsa announces results for the quarter and year ended December 31, 2012
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
ISIN: CA0494771029
(”Atlatsa” or the “Company”)
ATLATSA ANNOUNCES RESULTS FOR THE QUARTER AND YEAR ENDED DECEMBER 31, 2012
March 28, 2013 Atlatsa Resources Corporation (“Atlatsa” or the “Company”) (TSXV: ATL; NYSE MKT:
ATL; JSE: ATL) announces its operating and financial results for the three and twelve months ended
December 31, 2012. This release should be read together with the Company’s Financial Statements,
Management Discussion & Analysis and Form 20-F currently filed on www.atlatsaresources.co.za and
www.sedar.com. Currency values are presented in South African Rand (ZAR), Canadian Dollars ($)
and United States Dollars (US$).
The 2012 financial year brought with it many changes for the Company, including:
- The appointment of a new management team at Bokoni Platinum Mines (“Bokoni Mine”)
effective February 2012
- Significant operational and financial improvements demonstrated in Q2 2012 and Q3 2012
- Q4 2012 being negatively impacted by unprotected strike action at Bokoni Mine, which resulted
in almost no production for the fourth quarter, and consequently having a negative impact on
the operational and financial performance for the Company in the financial year under review;
- The completion of a strategic review at the Bokoni Mine operations, culminating in an
agreement between Atlatsa and Anglo American Platinum relating to a Revised Restructure
Plan for Atlatsa and the Bokoni Group of Companies, which results in a much improved
financial and operational outlook for Atlatsa going forward.
Operating and financial performance
After a stellar performance by the new management team appointed at Bokoni Mine which resulted in
quarter-on-quarter improvements of approximately 15% on all key measuring metrics, Bokoni Mine was
negatively impacted by an unprotected strike resulting in almost no production at the operations during
Q4 2012. A summary of the unprotected strike and its impact is set out below.
Unprotected strike
On October 1, 2012, employees at the Bokoni Mine embarked on unprotected strike action, as part of
an industry-wide strike contagion.
Employees who participated in the strike action were not paid during this period. Following numerous
unsuccessful efforts to resolve the situation, all striking employees (approximately 2,300 people) were
dismissed on November 8, 2012. Following interventions from community leaders and other interested
and affected parties, dismissed employees were provided with an opportunity to be re-instated if they
returned to work by December 7, 2012. An agreement was reached with the three recognised unions at
the Bokoni Mine - National Union of Mineworkers (“NUM”), United Association of South Africa (“UASA”)
and Togetherness Amalgamated Workers Union of South Africa (“TAWUSA”) - allowing for employees
to return to work on the following basis:
- re-instatement of dismissed employees,
- $234.4 (ZAR2,000) signing bonus payment; and
- implementation of a $46.9 (ZAR400) monthly travelling allowance to qualifying employees.
Employees were re-instated on December 7, 2012.
A summary of financial losses incurred due to the unprotected strike are as follows:
- damage to property and assets – $1.1 million(ZAR9.4 million);
- extraordinary costs incurred such as legal fees, security costs and overtime for essential
services amounting to $3.2 million (ZAR27.1 million);
- Estimated lost revenue at Bokoni Mine relating to approximately 35,500 PGM oz (4E) of
production in Q4 2012, plus certain operational costs associated with maintaining essential
services as well as the extraordinary costs described above.
Set out below are summaries of the key operating and financial results for Bokoni Mine and the
Company for the periods under review.
Q4 Q4 % %
Operating results 2012 2011
2012 2011 Change Change
Tonnes milled T 6,319 257,621 (98%) 863,675 1,047,401 (18%)
Recovered grade g/t milled,4E 4.58 4.08 12% 4.21 3.86 9%
4E oz produced Oz 2,045 29,316 (93%) 102,671 113,625 (10%)
UG2 mined to total output % - 36.4 (100%) 34.07 32.6 5%
Primary development M - 2,875 (100%) 7,550 10,549 (28%)
Capital expenditure $m 5.5 4.8 15% 38.9 28.7 36%
Operating cost/tonne
milled ZAR/t N/A 1,285 (3,071%) 1,535 1,194 (29%)
Operating cost/4E oz ZAR/4E oz N/A 11,292 (1,015%) 12,902 11,009 (17%)
Lost-time injury frequency Per 200,000
rate (“LTIFR”) hours worked - 2.41 100% 0.93 1.87 50%
Total permanent labor
(mine operations) Number 3,479 3,498 (1%) 3,479 3,498 (1%)
Total contractors
(mine operations) Number 1,553 1,826 (15%) 1,553 1,826 (15%)
Consolidated statement of comprehensive income summary
Expressed in Canadian Dollars (000’s) Q4 2012 Q4 2011 FY 2012 FY 2011
Revenue 809 32,514 117,557 144,407
Cash operating costs 27,282 41,722 158,388 167,997
Cash operating (loss)/profit* (26,473) (9,208) (40,831) (23,590)
Operating margin (3,272%) (28%) (35%) (16%)
EBITDA (46,799) (12,834) 35,545 (46,008)
Loss after tax (63,684) (35,519) (95,567) (147,865)
Non-controlling interest (20,023) (15,997) (76,849) (65,936)
Loss attributable to Atlatsa shareholders (43,660) (19,522) (18,718) (81,929)
Basic and diluted loss per share - cents 10 4 4 19
*Cash operating profit/(loss) before depreciation and amortization
Safety
It is with deep regret that the Company reports that Mr Zimele Gwantshu was fatally injured in an
accident on 14 February, 2012 at UM2 shaft, following a fall of ground incident.
Pleasingly, group LTIFR improved significantly to 0.93 per 200,000 hours in 2012 from 1.87 in 2011.
Positive engagement with the South African Department of Mineral Resources on safety matters has
continued.
Operational results
All key operating metrics at Bokoni Mine showed significant improvements under the new management
team during Q2 2012 and Q3 2012, where a positive production trend had started to develop.
Unfortunately all of these efforts, when measured on an annual basis, were marred by the negative
impacts of the unprotected strike during Q4 2012.
The most notable improvements achieved at the operations during 2012 included material
improvements in mining efficiency, feed grades and plant recoveries through a much improved
performance at the Bokoni Concentrator plant, all of which resulted in a 9% year-on-year improvement
in recovered grade.
Operational efficiencies also improved through the introduction of a number of new management
initiatives, including an amended bonus system, adjusted crew size compositions, variable pay and
leave cycles.
Encouragingly, the production start up at Bokoni Mine after the unprotected strike in Q1 2013 has gone
better than anticipated, with production having normalised immediately after the year-end break in
January 2013.
Financial results
Revenue for FY 2012 was $117.6 million (ZAR963.6 million) (FY 2011: $144.4 million (ZAR1,055.6
million)). The unprotected strike had a significant negative influence in revenue.
The average PGM basket price achieved for FY 2012 was US$1,221/oz (ZAR9,978/oz), representing a
12% decrease on FY 2011 at US$1,380/oz (ZAR10,028/oz). The average ZAR to $ exchange rate
achieved for FY 2012 was ZAR8.19=$1 (FY 2011: ZAR7.33=$1).
Cash operating costs for FY 2012 decreased to $158.4 million (ZAR1,298.3 million) from $167.9 million
(ZAR1,230.7 million) in FY 2011, primarily attributable to the unprotected strike at Bokoni Mine.
From Q1 to Q3 2012 the mine achieved a decrease in ZAR/4E unit costs of 23%.
Revised Restructure Plan
Subsequent to year-end, on March 27, 2013, the Company announced that it had entered into a
ZAR3.5 billion (US$ 380 million) Revised Restructure Plan with Anglo American Platinum, which will
have a material positive impact on the Company’s operational and financial outlook going forward.
Upon implementation of the Revised Restructure Plan, Atlatsa and the Bokoni group will be well
positioned to implement their business strategy on a more conservative, lower risk and sustainable
basis. The Revised Restructure Plan retains most of the elements agreed between the Parties in the
Initial Restructure Plan announced on 2 February, 2012 and improves on the Initial Restructure Plan as
follows:
- A new and more conservative operating and financing plan for Bokoni Mine through to
2020.
- An simplification to the equity capital structure of Atlatsa which results in:
- an equity capital injection into Atlatsa of ZAR 750 million ($ 87.9million) by Anglo
American Platinum subscribing for 125 million new common shares in Atlatsa at
ZAR 6.00 per share (US$0.71 cps), the proceeds of which will be used to further
reduce Atlatsa’s outstanding debt;
- the unwinding of the historical “B” preference share arrangement, such that Atlatsa
will have one class of common shares going forward; and
- an increase in the BEE shareholding in Atlatsa from 51% to 62% (fully diluted),
facilitated by Anglo American Platinum selling 115.8 million Atlatsa common
shares, arising from the unwind of the “B” preference shares, to Atlatsa Holdings
for ZAR 463 million ($ 54.27 million) on a vendor-financed basis.
- An amendment to the debt capital structure and financing terms of Atlatsa, which results in
the following revisions to the existing debt facility between Atlatsa and Anglo American
Platinum:
- a 75% reduction in Atlatsa’s attributable debt from ZAR 3.28 billion ($ 384.87
million) to approximately ZAR 833 million ($ 97.66 million), as at 31 December
2012;
- an increase in the existing debt facility by ZAR 700 million ($ 82.06 million) made
available to Atlatsa to finance its 51% pro rata share of the planned expansion at
Bokoni Mine through to 2020 with a maximum facility limit of ZAR1.55 billion
($181.71million); and
- a reduction in Atlatsa’s estimated effective cost of borrowing from 13% to 2% over
the debt term period between 2013 to 2020.
The implementation of the Revised Restructure Plan will be subject, inter alia, to the fulfillment or,
where appropriate, waiver of the following conditions precedent:
- Approval by the shareholders of Atlatsa;
- All of the agreements constituting the Revised Restructuring Plan becoming unconditional;
- To the extent required, unconditional approval by the Competition Authorities of South
Africa;
- To the extent required, unconditional approval by the South African Reserve Bank; and
- Approval of the Transaction by the relevant regulatory authorities including the TSX
Venture Exchange, JSE Limited, NYSE-MKT, the South African Department of Mineral
Resources and ministerial approval of the transfer of mineral rights.
For additional information on the Revised Restructure Plan refer to the news releases of Atlatsa dated
February 2, 2012, September 27, 2012 and March 27, 2013 as well as the material change reports filed
on February 13, 2012 and September 27, 2012, all of which are available at www.sedar.com.
Earnings
Largely as a result of the negative financial impacts of the unprotected strike at Bokoni Mine, the
Company incurred an operating loss attributable to Atlatsa shareholders of $18.7 million, a basic and
diluted loss of 4 cents per share, for the 2012 financial year.
The Company recognised a fair value gain at year-end of $90.6 million arising from the implementation
of phase one of the Revised Restructure Plan, which took place on 28 September 2012. This had a
material positive impact on the Company’s earnings for the period.
The FY 2012 financial statements are prepared on the basis of accounting policies applicable to a going
concern. This basis presumes that the Revised Restructure Plan described above is successfully
approved by Atlatsa shareholders before 30 June, 2013.
The audit report included in the Company's Annual Report on Form 20-F ("20-F") contained an opinion
from its independent registered public accounting firm, KPMG Inc., which included a "going concern"
explanatory paragraph. The Company discusses this matter in Note 2 to the financial statements
included in its 20-F. This press release does not represent any change or amendment to the
Company's financial statements or its 20-F.
Note on cautionary and no conference call
Atlatsa will not be holding a conference call or presentation to accompany these results. The Company
will resume detailed shareholder communications in due course.
28 March 2013
Johannesburg
JSE Sponsor
Macquarie First South Capital (Pty) Ltd
Queries:
On behalf of Atlatsa
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 82 372 5816
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 Amex has neither approved nor disapproved the contents of this press release.
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 restructure and refinancing and anticipated financial 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 Bokoni Mine will increase or continue to achieve
production levels similar to previous years; the Ga-Phasha, Boikgantsho, Kwanda and Platreef Projects
exploration results will continue to be positive; 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 completion of the Bokoni Group restructure and refinancing;
- uncertainties and costs related to the Company’s exploration and development activities, such as
those associated with determining whether mineral resources or reserves exist on a property;
- uncertainties related to feasibility studies that provide estimates of expected or anticipated costs,
expenditures and economic returns from a mining project;
- uncertainties related to expected production rates, timing of production and the cash and total
costs of production and milling;
- uncertainties related to the ability to obtain necessary licenses, permits, electricity, surface rights
and title for development projects;
- operating and technical difficulties in connection with mining development activities;
- uncertainties related to the accuracy of our mineral reserve and mineral resource estimates and
our estimates of future production and future cash and total costs of production, and the
geotechnical or hydrogeological nature of ore deposits, and diminishing quantities or grades of
mineral reserves;
- uncertainties related to unexpected judicial or regulatory proceedings;
- changes in, and the effects of, the laws, regulations and government policies affecting our mining
operations, particularly laws, regulations and policies relating to:
- mine expansions, environmental protection and associated compliance costs arising from
exploration, mine development, mine operations and mine closures;
- expected effective future tax rates in jurisdictions in which our operations are located;
- the protection of the health and safety of mine workers; and
- mineral rights ownership in countries where our mineral deposits are located, including the
effect of the Mineral and Petroleum Resources Development Act (South Africa);
- 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;
- unusual or unexpected formation, cave-ins, flooding, pressures, and precious metals losses (and
the risk of inadequate insurance or inability to obtain insurance to cover these risks);
- 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 Report disclosed in
the Form 20-F for the year ended December 31, 2012 filed at www.sedar.com and with the United
States Securities and Exchange Commission www.sec.gov and other disclosure documents that are
available at www.sedar.com.
Date: 28/03/2013 03:01:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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