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Atlatsa announces results for the quarter ended March 31, 2013
Atlatsa Resources Corporation
(previously Anooraq Resources Corporation)
(Incorporated in British Columbia, Canada)
(Registration number 10022-2033)
TSXV/JSE share code: ATL
NYSE AMEX share code: ATL
ISIN: CA0494771029
(”Atlatsa” or the “Company”)
ATLATSA ANNOUNCES RESULTS FOR THE QUARTER ENDED MARCH 31, 2013
Significant improvements in year-on-year Q1 operating performance
Year-on-year ZAR PGM unit costs decrease by 13% on improved production and operational
efficiencies
May 14, 2013 Atlatsa Resources Corporation (“Atlatsa” or the “Company”) (TSXV: ATL; NYSE MKT:
ATL; JSE: ATL) announces its operating and financial results for the three months ended March 31,
2013. This release should be read together with the Company’s Financial Statements, Management
Discussion & Analysis filed on www.atlatsaresources.co.za and www.sedar.com. Currency values are
presented in South African Rand (ZAR), Canadian Dollars ($) and United States Dollars (US$).
Chief Executive Officer, Harold Motaung, says, “The Company has achieved significant improvements
in its operating performance and increased production volumes despite this being a traditionally
challenging quarter. Most importantly, the new management continues to demonstrate a positive
upward trend in operating performance, with all key operating metrics showing significant year-on-year
improvements. With the Revised Restructure Plan near completion, Bokoni is well-funded and well-
positioned as an emerging, long-life mid-tier PGM producer”.
First quarter highlights:
- Production normalises after Q4 2012 unprotected strike action at Bokoni.
- Significant improvements in operating performance, with tonnes milled improving by 25% and
PGM* ounces produced improving by 30% in Q1 2013 compared with Q1 2012.
- Absolute costs in $ terms remain relatively flat year-on-year, with Rand/ PGM ounce unit costs
decreasing by 13% year-on-year as a result of improved production volumes and efficiencies.
- Material improvement in year-on-year financial metrics, with cash operating profit and EBITDA
improving by 110% and 232%, respectively.
*PGM means platinum group metals (4E), comprising platinum, palladium, rhodium and gold.
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.
- Revised restructure plan announced with Anglo American Platinum Ltd, which will result in
Company debt reduction of 75% and the Bokoni group being fully financed on attractive terms
through to 2020.
- Merensky open cast mining operations approved to commence in Q2 2013.
Operating and financial performance
Set out below are summaries of the key operating and financial results for Bokoni Mine and the
Company for the period under review.
%
Operating results Q1 2013 Q1 2012
Change
Tonnes milled T 302,964 243,054 24.6
Recovered grade g/t milled,4E 3.83 3.58 7.0
4E oz produced Oz 36,043 27,799 29.7
UG2 mined to total output % 34.36 33.80 1.7
Primary development M 1,956 2,547 (23.2)
Capital expenditure $m 12.0 6.9 74.0
Operating cost/tonne milled ZAR/t 1,283 1,423 9.8
Operating cost/4E oz ZAR/4E oz 10,786 12,442 13.3
Lost-time injury frequency rate (“LTIFR”) Per 200,000 hours worked 0.97 1.46 33.6
Total permanent labour
(mine operations) Number 3,516 3,503 0.4
Total contractors
(mine operations) Number 1,550 1,611 (3.8)
Consolidated statement of comprehensive income summary
%
Expressed in Canadian Dollars (000’s) Q1 2013 Q1 2012
Change
Revenue 45,081 34,079 32.3%
Cash Operating costs 44,037 43,949 (0.2%)
Cash Operating profit/(loss) 1,044 (9,870) 110.6%
Operating margin 2% (29%) 106.9%
EBITDA 17,976 (13,600) 232.2%
Loss after tax (4,625) (41,267) 88.8%
Non-controlling interest 1,540 (19,729) 107.8%
Loss attributable to Atlatsa shareholders (6,165) (21,538) 128.6%
Basic and diluted loss per share - cents 1 5 80.0%
Safety
Atlatsa again reported a pleasing safety performance for the quarter, celebrating a million fatality free
shifts. This is a tribute to management, employees, unions and the active engagement with the South
African Department of Mineral Resources on safety matters. Atlatsa’s LTIFR improved to 0.97 (33.6%)
per 200,000 hours worked when compared to the Q1 2012 LTIFR of 1.46.
Operational results
The new management team at Bokoni Mine continues to demonstrate a positive trend in operating
performance, with all key operating metrics showing significant year-on-year improvements.
During Q1 2013, the Bokoni Mine produced 36,043 PGM ounces as compared to 27,779 4E ounces
during Q1 2012. Tonnes delivered to the concentrator plant in Q1 2013 increased by 22.4% when
compared to Q1 2012, and tonnes milled increased by 24.6% over the comparative period.
Primary development decreased by 23.2% in Q1 2013 when compared to Q1 2012. This was due to
planned development decreases being implemented, primarily related to the UG2 ramp up operations,
as a result of a deferral of the UG2 Delta 80 expansion plans and adoption of a new operating plan at
Bokoni through to 2020, as detailed in the Company’s announcement on March 27, 2013.
A strong focus remains on continuously improving recovered grade at the operations. New initiatives,
which will result in a change in the mining cut at the Merensky operations, together with other quality
mining practices, should begin to yield positive results during Q2 2013.
Mining flexibility through creating sufficient spare mining panels at the operations remains a key focus,
especially at the Merensky operations which experience a higher incidence of geological potholing.
Open cast mining operations
During the quarter the Company approved a project for the commencement of open cast mining
operations in the Merensky Reef at Bokoni Mine. It is anticipated that mining will commence in Q2
2013. These operations should have a positive impact on production volumes and further reduce unit
costs at Bokoni going forward.
Wage negotiations
Bokoni Mine management has initiated preliminary engagements with its recognised unions regarding
wage negotiations, due to commence in June 2013. The current two year wage agreement at Bokoni
Mine terminates in July 2013.
Financial results
Revenue sales were $45.1 million for Q1 2013 compared to $34.1 million for Q1 2012.
The ZAR PGM basket price achieved for Q1 2013 was 16.9% higher year-on-year at ZAR11,562, when
compared to ZAR9,887 for Q1 2012, whilst the US$ PGM basket price only improved by 1.4% year-on-
year to $1,291, compared to US$1,273 in Q1 2012.
Despite increased production volumes, cash operating costs for Q1 2013, measured in $ terms,
remained relatively flat year-on-year, increasing by $0.5 million to $44.4 million.
ZAR PGM ounce unit costs decreased by 13.3% year-on-year from ZAR12,442 to ZAR10,786, whilst
US$ PGM ounce unit costs decreased by 26.4% year on year from $1,622 to $1,194.
Absolute and unit cost cutting initiatives remain a key focus at the operations, with further reductions in
unit costs anticipated from Q2 2013 onwards as a result of continued efficiency improvements, together
with the commencement of the Merensky open cast mining operations.
Earnings
The Company recognised a fair value gain of $20.6 million arising from the implementation of phase
one of the Revised Restructure Plan, which took place on September 28, 2012. This had a positive
impact on the Company’s earnings for the period.
The Company achieved an operating profit of $8.3 million for Q1 2013, when compared to an operating
loss of $23.4 million for Q1 2012, whilst cash operating profit and EBITDA improved year-on-year by
110% and 232%, respectively.
The basic and diluted loss per share improved by 80% year-on-year from 5 cps to 1 cps.
Revised Restructure Plan
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.
The implementation of the Revised Restructure Plan remains subject to the fulfilment or, where
appropriate, waiver of the following conditions precedent:
- Approval by the shareholders of both Atlatsa Resources and Atlatsa Holdings;
- 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.
The Revised Restructure Plan is anticipated to be completed by 30 September, 2013.
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 and April 8, 2013, all of which are available at
www.sedar.com and the Company’s website www.atlatsaresources.co.za.
Accounting Policies and Going Concern
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 annual financial
statements for the year ended December 31, 2012, filed on March 28, 2013 on www.sedar.com, the
Company’s website and 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 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.
Johannesburg
14 May 2013
JSE Sponsor
Macquarie First South Capital (Pty) Limited
Queries:
On behalf of Atlatsa
Joel Kesler
Chief Commercial Officer
Office: +27 11 779 6800
Mobile: +27 82 454 5556
Russell and Associates
Charmane Russell / Pam Wolstenholme
Office: +27 11 880 3924
Mobile: +27 82 372 5816 / +27 82 927 8957
Macquarie First South Capital (Pty) Ltd
Annerie Britz / Yvette Labuschagne
Office: +27 11 583 2000
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:
o mine expansions, environmental protection and associated compliance costs arising from
exploration, mine development, mine operations and mine closures;
o expected effective future tax rates in jurisdictions in which our operations are located;
o the protection of the health and safety of mine workers; and
o 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: 14/05/2013 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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