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ROYAL BAFOKENG PLATINUM LIMITED - Reviewed Interim Results for the six months ended 31 June 2013

Release Date: 12/08/2013 08:00
Code(s): RBP     PDF:  
Wrap Text
Reviewed Interim Results for the six months ended 31 June 2013

ROYAL BAFOKENG PLATINUM LIMITED
Incorporated in the Republic of South Africa)
(Registration number 2008/015696/06)
JSE share code: RBP ISIN: ZAE000149936
("RBPlat" or the "company")

Reviewed Interim Results for the six months ended 30 June 2013
Key Features
  - 8.4% reduction in Lost Time Injury Frequency Rate
  - 1.1% increase in production to 130,278 PGM ounces (4E)
  - 5.8% increase in built-up head grade to 4.28g/t
  - 1.3% increase in cash operating cost per platinum ounce to
    R11 756/Pt
  - 103% increase in earnings per share to 87 cents
  - R88 million surplus cash generated by operating activities
    after all capital expenditure
  - R992 million (1 January 2013: R910 million) cash position –
    balance sheet remains ungeared
   

Condensed consolidated statement of comprehensive income

                          Six months ended                   Year ended
For the period ended      Reviewed    Reviewed        %      Audited
(R million)               30 June     30 June       Change   31
                           2013        2012                  December
                                                              2012
Revenue                      1 548.0      1 305.3     18.6    2 865.3
Cost of Sales               (1 222.8)    (1 142.3)    (7.0)  (2 525.5)
Cost of sales excluding
Depreciation and             (1051.9)    (1 032.5)    (1.9)  (2 201.8)
amortisation
Depreciation and              (186.2)      (139.9)   (33.1)    (327.6)
amortisation
Increase in Inventories         15.3         30.1     49.2        3.9

Gross profit                   325.2        163.0     99.5      339.8
Other income                    31.7         21.2     49.5       66.9
Administration expenses        (61.4)       (63.1)     2.7     (101.7)
Finance Income                  22.3         34.6    (35.5)      59.7
Finance Cost                    (1.8)        (1.7)     5.9       (3.4)

Profit before tax              316.0        154.0    105.2      361.3
Income tax expense             (87.3)       (34.9)  (150.1)     (85.6)
Income tax                      (7.4)        (7.8)     5.1      (17.5)
Deferred tax                   (79.9)       (27.1)  (194.8)     (68.1)
Total comprehensive            228.7        119.1     92.0      275.7
income
Attributable to owners         143.6         70.6    103.4      170.3
of the Company
Attributable to non-            85.1         48.5     75.5      105.4
control Interest
Basic EPS (cents/share)         87.4         43.0    103.3      103.9
Diluted EPS                     87.3         43.0    103.0      103.8
(cents/share)
HEPS (cents/share)              87.2         43.0    102.8      103.9

Condensed Consolidated Statement of Financial position

                             Six months ended           Year ended
As at                        Reviewed    Reviewed       Audited
(R million)                  30 June     30 June        31 December
                              2013        2012           2012
Assets
Non-current Assets           18 204.6     17 476.3      17 947.0
  Property plant and          9 188.0      8 406.6       8 899.2
equipment
  Mineral rights              6 617.2      6 673.6       6 645.0
  Goodwill                    2 275.1      2 275.1       2 275.1
  Environmental trust            99.7         96.4         103.1
deposit
  Deferred tax asset             24.6         24.6          24.6
Current assets                2 223.3      2 263.3       2 154.4
  Inventories                    46.4         61.9          41.1
  Trade and other             1 184.3      1 033.3       1 202.4
receivables
  Held to maturity              253.8        272.5         260.6
Investments
  Current tax receivable          0.5          0.3           0.4
  Cash and cash                 738.3        895.3         649.9
equivalents
Total assets
                             20 427.9     19 739.6      20 101.4

Equity and Liabilities
  Share Capital                   1.7          1.7           1.7
  Share premium               7 801.2      7 785.8       7 789.0
  Retained earnings           3 749.2      3 505.9       3 605.6
  Other reserves                139.0         91.5         119.7
  Non-controlling interest    4 049.7      3 907.7       3 964.6
Total equity                 15 740.8     15 292.6      15 480.6
Non-current liabilities       4 257.5      4 131.9       4 175.1
  Deferred tax liability      4 192.5      4 071.5       4 112.6
  Long-term provisions           65.0         60.4          62.5
Current liabilities             429.6        315.1         445.7
  Trade and other payables      429.1        313.6         443.3
  Current tax payable             0.5          1.5           2.4
Total equity and             20 427.9     19 739.6      20 101.4
liabilities


  
         Condensed consolidated statement of changes in equity

                    Number      of Ordinary             Share             Share based
                    shares         shares               premium           payment
                                                                          reserve
                                      R million         R million         R million
   Balance at 1
   January 2012      163,677,799         1.7            7,759.90            81.1
   IPO     shares
   vested in May
   2012                  417,416           –                25.9           (25.9)
   Share-based
   payment charge
   for the six
   months                      –           –                   –            36.3
   Profit for the 
   six months to
   30 June 2012                –           –                   –                –
   Balance at 30
   June
   2012(reviewed)    164,095,215         1.7            7,785.80             91.5
   Share-based
   payment charge
   for the six
   months                      –           –                   –             31.4
   2009       BSP
   shares vested
   in    December
   2012                   55,589           –                  3.2            (3.2)
   Profit for the
   six months to
   31    December
   2012                          –         –                    –                –
   Balance at 31
   December
   2012(audited)     164,150,804         1.7             7,789.00            119.7
Share-based
payment charge
for the six
months                        –            –                   –              31.5
Mahube
ordinary
shares vested
31 March 2013         187,971              –                12.2              (12.2)
Profit for the
six months to
30 June 2013                –              –                   –               –
Balance at 30
June
2013(reviewed)    164,338,775            1.7            7,801.20               139

                 Retained          Attributable   Non-              Total
                 earnings          to owners of   Controlling
                                   the Company    Interest
                 R million         R million      R million         R million
Balance at 1
January 2012         3,435.30       11,278.00       3,859.20        15,137.20
IPO     shares
vested in May
2012                        –               –              –               –
Share-based
payment charge
for the six
months                      –           36.3               –            36.3
Profit for the
six months to
30 June 2012             70.6          70.6             48.5           119.1
Balance at 30
June
2012(reviewed)       3,505.90      11,384.90        3,907.70       15,292.60
Share-based
payment charge
for the six
months                      –           31.4               –            31.4
2009       BSP
shares vested
in    December
2012                        –              –               –               –
Profit for the
six months to
31    December
2012                     99.7           99.7            56.9           156.6
Balance at 31
December
2012(audited)        3,605.60      11,516.00        3,964.60       15,480.60
Share-based
payment charge
for the six
months                      –            31.5              –            31.5
Mahube
ordinary
shares vested               –               –              –               –
31 March 2013
Profit for the
six months to
30 June 2013            143.6           143.6           85.1           228.7
Balance at 30
June
2013(reviewed)       3,749.20       11,691.10       4,049.70       15,740.80

 Condensed consolidated cash flow statement

                             Six months ended                 Year ended
For the period ended         Reviewed    Reviewed     %       Audited
(R million)                  30 June     30 June    Change     31
                              2013        2012                December
                                                               2012
Cash generated by             515.7      302.3      70.6       687.3
operations
 Interest received             16.4       27.0     (39.3)       64.0
 Dividends received            12.7          –     100.0           –
 Tax paid                      (9.4)      (9.8)      4.1       (18.7)
Net cash flow generated by    535.4      319.5      67.6       732.6
operating activities
Proceeds from disposal of       0.4          –     100.0           –
property, plant and
equipment

Acquisition of property,     (445.9)    (520.9)     14.4    (1 173.9)
plant and equipment                                            
Increase in environmental      (1.5)      (2.5)     40.0        (8.0)
trust deposit
Net cash flow utilised by    (447.0)    (523.4)     14.6    (1 181.9)
investing activities
Net cash flow generated by        -          -         -           -
financing activities
Net Increase/(decrease) in     88.4     (203.9)    143.3      (449.3)
cash and cash equivalents
Cash and cash equivalents     649.9    1 099.2     (40.9)    1 099.2
at beginning of period
Cash and cash equivalents     738.3      895.3     (17.5)      649.9
at end of period

Notes to the financial statements
1. Basis of presentation

   The condensed consolidated financial information has been
   prepared in accordance with International Financial Reporting
   Standards (IFRS), IAS 34 and interpretations of those standards
   (as adopted by the International Accounting Standards Board) and
   applicable legislation (requirements of the South African
   Companies Act and the regulations of the JSE Limited).

   The financial information is presented in South African Rands
   which is the Company’s functional currency.
2. Accounting policies

   The condensed consolidated financial statements have been
   prepared under the historical cost convention. The principal
   accounting policies used by the Group are consistent with those
   of the previous period, except for the adoption of various
   revised and new standards. The adoption of these standards had
   no material impact on the financial results for this review
   period.
3. Independant review by the auditors

   The   interim  financial   statements  have   been  reviewed by
   PricewaterhouseCoopers Inc. whose unqualified review conclusion
   is available for inspection at the registered office of RBPlat.
   The preparation of these interim financial statements was
   supervised by the Finance Director, Mr MJL Prinsloo, CA(SA).


4. Capital commitments

Capital commitments relate to the Styldrift I and BRPM Phase II and
III projects.

                                              Reviewed   Reviewed
For the period ended
                                               30 June    30 June
(R million)
                                                  2013       2012
Contracted commitments                           729.4      722.2
Approved expenditure not yet contracted for    7 647.5    8 522.6
                                               8 376.9    9 244.8

The capital commitments reflect 100% of the BRPM JV project
commitments. Effectively RBPlat must fund 67% thereof and Rustenburg
Platinum Mines Ltd (RPM) the remaining 33%.

Should either party elect not to fund their share, their interest
will be diluted according to the terms of the BRPM JV agreement.

5. Contingencies

  5.1 Guarantees

                                               Reviewed    Reviewed
   For the period ended
                                                30 June     30 June
   (R million)
                                                   2013        2012
   Eskom guarantee to secure power supply
                                                   17.1       17.1
   for Styldrift I Project
   Eskom early termination guarantee for
                                                   17.5       17.5
   Styldrift I Project
   Eskom connection charges guarantee for
                                                   40.0       40.0
   Styldrift I Project
   Anglo American Platinum guarantee for
                                                   77.5       75.3
   environmental rehabilitation liability
   Rental guarantee                                 0.4        0.4
   Housing guarantee                              200.0          –
                                                  352.5      150.3



5.2 Tax contingency

On 31 January 2013 Royal Bafokeng Resources (Pty) Ltd (RBR) received
notice from the South African Revenue Services (SARS) that they have
completed an audit of RBR’s 2008 to 2010 tax assessments and that
they intend reopening these assessments to effect certain proposed
adjustments. These proposed adjustments primarily relate to SARS
intending to disallow interest on shareholder’s loans amounting to
R586 million previously deducted by RBR and allowed by SARS in the
2008 and 2009 income tax assessments. RBR has enlisted independent
advice regarding this matter and, based upon the consultation to
date, remains confident that it has a reasonable prospect of
successfully defending the matter. Correspondence with SARS is
ongoing.

6. Financing facilities in place

RBPlat had cash and near cash investments on hand at 30 June 2013 of
R992.1 million. The Group has an intramonth funding working capital
requirement which is met through a R458 million working capital
facility of which R352.5 million had been utilised for guarantees at
30 June 2013. The revolving credit facility (RCF) was increased from
R500 million to R1 billion during the first half of 2013 and is
repayable by 31 December 2015. The R1 billion RCF has not been
utilised to date

7.Basic and headline earnings

The reconciliation between basic and headline earnings is shown
below:

                                               Reviewed       Reviewed
                                                30 June        30 June
For the period ended                               2013           2012
Basic earnings – profit attributable to
                                                  143.6           70.6
owners of the Company (R million)
Adjustments net of tax:
Profit on disposal of property, plant
                                                  (0.4)              –
and equipment (R million)
Headline earnings (R million)                     143.2           70.6
Weighted average number of ordinary
shares in issue for basic and headline      164 291 783    163 956 076
earnings per share
Basic earnings per share (cents/share)             87.4           43.0
Diluted earnings per share
                                                   87.3           43.0
(cents/share)
Headline earnings per share
                                                   87.2           43.0
(cents/share)
Diluted headline earnings per share
                                                   87.1
(cents/share)


8.Sales

                                                  Reviewed    Reviewed
                                                  30 June     30 June
(R million)                                          2013        2012
Concentrate sales – production from BRPM
                                                  1 449.7     1 272.9
concentrator
UG2 toll concentrate sales                           98.3        32.4
                                                  1 548.0     1 305.3


9.Cost of sales

                                                 Reviewed    Reviewed
                                                   30 June    30 June
(R million)                                           2013       2012
Labour                                               371.4      359.9
Utilities                                             82.9       78.9
Contractor costs                                     231.0      220.7
Materials and other mining costs                     280.4      288.6
Materials and other mining costs – BRPM JV           302.8      309.2
Elimination of intergroup charge                     (22.4)     (20.6)
Movement in inventories                              (15.3)     (30.1)
Depreciation                                         158.5      113.1
Amortisation                                          27.7       26.8
Share-based payment expense                           20.0       21.9
Social and labour plan expense                        44.0       57.4
State royalties                                        5.2        4.4
Retrenchments                                         12.4         –
Other                                                  4.6        0.7
                                                   1 222.8    1 142.3


10.Related party transactions

                                                 Reviewed   Reviewed
                                                  30 June    30 June
(R million)                                          2013       2012
Amount owing by RPM for concentrate sales         1 050.5      926.9
Amount owing to RPM for contribution to BRPM
                                                    200.7       62.7
JV
Amount owing by Impala Platinum Limited to
                                                     18.9       17.3
BRPM JV
Transactions during the six months:
Concentrate sales to RPM                          1 548.0    1 305.3
Impala Platinum Limited royalty income               36.4       20.6
Transactions with Fraser Alexander                    7.7       12.8
Royal Marang Hotel                                    0.2        0.4
Geoserve Exploration Drilling Company                 1.0        6.7
Zurich Insurance Company of South Africa
                                                        –        0.4
(ceased to be an associate as at 25 May 2012)
Trident South Africa (Pty) Ltd                        0.3        2.6


11.Dividends

No dividends have been declared or proposed in the current period
(2012: nil).

12.Segmental reporting

The Group is currently operating one mine with two decline shafts
and the Styldrift I Project. The BRPM JV is treated as one operating
segment. The Executive Committee of the Company is regarded as the
Chief Operating Decision Maker.

                                                     Reviewed    Reviewed
For the period ended                                  30 June     30 June
(R million)                                              2013        2012
Concentrate sales                                      1 548.0     1 305.3
Cash cost of sales                                      (988.1)     (968.8)
Depreciation                                            (107.1)     (63.6)
Other operating income                                    31.7        21.2
Other operating expenditure                              (65.8)      (49.9)
Net finance income                                         4.6         4.3
Segmental profit before tax                              423.3       248.5
Additional depreciation on purchase price                (79.1)      (76.4)
adjustment and amortisation
Consolidation adjustments                                 22.5        20.7
Overheads of corporate office and royalties              (66.6)      (67.5)
Other income and net finance income                       15.9        28.7
Profit before tax per the statement of                   316.0       154.0
comprehensive income


Operating and   financial
statistics

                                                                              %**
                                              30   June      30   June
Description                         Unit           2013           2012       change
SAFETY
LT IFR/200 000                      hours          0.61           0.67          8.4
SIFR/200 000                        hours          0.32           0.32          1.6
Injury free days                    days            130            116         12.1
PRODUCTION
Tonnes delivered – Total            kt            1,128          1,190         (5.1)
Merensky (MER)                      kt              926            976         (5.2)
Surface sources (MER)               kt                0             60         (100)
UG2                                 kt              202            153           32
IMS ore reserve                     km             6.08           4.16           46
IMS panel ratio                     ratio          1.52           1.12         35.7
Tonnes milled – Total               kt            1,095          1,139         (3.8)
   Tonnes milled – MER              kt              896            990         (9.5)
   Tonnes milled – UG2              kt              199            149         33.9
   UG2% milled                      %                18             13         39.2
Built-up head grade (4E) –
Total                               g/t            4.28           4.04         5.8
   Built-up    head   grade
(4E) – MER                          g/t            4.41           4.29         2.7
   Built-up    head   grade
(4E) – UG2                          g/t             3.7           3.35         10.5
Metals in concentrate
   4E                               koz             130            129          1.1
   Platinum                         koz              85             83          1.4
   Nickel                           t               847            916         (7.5)
LABOUR
Total working cost labour           No            5,984          6,744         11.3
Stoping crew efficiency             m²/crew         311            281         10.7
   Enrolled                         m²/crew         311            289          7.4
   Contractor                       t/emp           311            279         11.5
Tonnes milled/TEC                                    30             28          8.4
FINANCIAL
Cash operating cost                 R’m             988            969           (2)
Operating cash unit cost            R/t             917            851         (7.8)
Operating     cash     unit
cost/4E oz*                         R/oz          7,637          7,519         (1.6)
Operating     cash     unit
cost/Pt oz*                         R/oz         11,756         11,606         (1.3)
Total capital expenditure           R’m             446            521         14.6
   Stay-in-business
capital                             R’m              49            116         57.9
   SIB % of operating cost          %                 5             12         58.8
   Replacement capital              R’m              85            156         44.7
   Expansion capital                R’m             312            249        (25.3)
Gross profit                        %                21           12.5           68
EBITDA                              %              31.2             20           56
Average basket price                R/Pt oz      18,294         15,638           17
Average R:US $                      R/US $          9.3           7.94         17.1



Commentary

Safety

Royal Bafokeng Platinum is pleased to have recorded an improvement
in most safety metrics during the first half of 2013. The total
number of injuries reduced by 36% from the same period in 2012 with
the Lost Time Injury Frequency Rate (LTIFR) and Serious Injury
Frequency Rate (SIFR) reducing by 8.4% and 1.6% respectively over
the same period. Two million fatalityfree shifts were achieved on 2
April 2013 and the total number of injury-free days increased from
116 days in the first half of 2012 to 130 days during the period
under review.

Notwithstanding the improvement in overall safety performance the
Company regrettably recorded a fatal injury at its Bafokeng Rasimone
Platinum Mine (BRPM) on 8 May 2013 during which Mr Mohoanyane,
working for BRPM support services lost his life during the collapse
of a temporary platform at South shaft level 9.

The good from mining

Community projects
The socio-economic development of the local communities is
underpinned by our ambition of more than mining. Key focus areas in
which various projects and initiatives have been embarked upon
include basic infrastructure, health, poverty alleviation, job
creation, education and community skills development. These projects
have been identified and executed as a result of regular stakeholder
engagements with the local communities, Government authorities and
the Royal Bafokeng Nation.

A number of projects were initiated and others concluded during the
period under review to uplift the socio-economic condition of local
communities. These include the construction of a Light Industry
Centre which aims to promote entrepreneurship and capacity
development of SMMEs, support for Mathematics and Science learners
in high school by providing additional educators, refurbishing the
Science laboratories and the building of Grade R classes at Chaneng
Primary school to enable foundational learning.

Further projects being executed and on schedule include the
upgrading and extension of the Phokeng forensic pathology centre
which at completion will be able to cater for extra capacity to
conduct forensic pathology activities and the construction of
internal community road networks. Thirty four community members
completed a community skills development programme in mechanised
mobile machinery operators which aims to make the local youth
employable while creating the necessary skills locally to support
future skills requirements of the Styldrift I project.

The BRPM and Styldrift socio-economic development projects are being
implemented jointly to enhance their impact considering the needs in
the   surrounding  communities.   RBPlat’s  stakeholder   engagement
activities are focused on engagement with the local communities and
relevant authorities to identify sustainable initiatives that will
provide a foundation for long-term empowerment, whilst balancing the
commercial needs of the business.

Environmental stewardship

RBPlat’s Sustainable Development initiatives are well on track in
achieving its strategic intent of “more than mining” with a number
of intervention strategies maturing. The first United Nations Global
Compact (UNGC) Communication of Progress (COP) was completed to
reflect progress on implementation of the 10 UNGC principles which
will be shared with all stakeholders in the second half of 2013. A
review of RBPlat’s Sustainability and Stakeholder Engagement
Framework, in line with the UNGC, was started in May 2013 and will
be completed within the 2013 financial year which will map out our
sustainability strategy and plans for the next three years in line
with the Company’s strategic plan.

In addition, the Climate Change Vulnerability Assessment was further
enhanced by extending its scope across both RBPlat operations to
identify potential impacts on its operations and to assist it with
future planning. Key vulnerability risks that were identified
include potential future water and electricity shortage in the
region which is mitigated by a number of energy conservation and
water resource interventions. These include a water retreatment
plant to treat 4Ml/day (two thirds of our allocated potable water
from Magalies Water) which will be reused within our operations.
However, the Environmental Impact Assessment process is still in
progress. Two other environmental related key projects were
initiated and completed, namely a Water Disclosure Project as well
as Carbon Disclosure Project as part of our commitment to be a
responsible company.

Operational performance

Overview

The operating performance during the first half of 2013 was
consistent with the objectives and operating strategies of the
Company.

Improving operational flexibility by increasing immediately stopable
ore reserves (IMS) has been a consistent key focus at BRPM. IMS face
length increased by 46% from 4 163 metres at the end of the first
half of 2012 to 6 084 metres at the end of the period under review
resulting in an IMS panel ratio of 1.52 compared to the target ratio
of 1.50 panels per stoping team. The increase in IMS has enabled the
normalisation of development rates benefitting both grade and
operating costs and has in addition contributed to improved safety
performance and labour efficiencies.

The success achieved in improving IMS has enabled a shift in
strategic focus to cost management covering a number of key areas
including labour, contractors and high cost consumables. This has
contributed to a below inflation increase of 1.6% in unit cost per
4E ounce compared to the corresponding period in 2012. Working cost
labour reduced by 11% from 6 744 to 5 984 and contributed to lower
costs and improved efficiencies. One unintended consequence of the
labour reduction was a significant reduction in sweepings which
contributed to lower hoisted and milled tonnes despite a 10%
increase in tonnes broken. Action plans to address the shortfall are
being implemented.

Production

Ounce output increased by 1.1% compared to the first half of 2012
and ended at 130 278 4E ounces and 84 628 platinum ounces
respectively. Overall tonnes milled reduced by 3.8% due to a
shortfall in sweepings and lower reef development rates. This was
offset by a 5.8% increase in built-up head grade resulting from
lower reef development dilution, no processing of low grade surface
stockpile and improved mining controls. A 4E built-up head grade of
4.28g/t was achieved during the first six months of 2013 compared to
4.04g/t for the first half of 2012.

The UG2 contribution at BRPM increased from 13% to 18% in line with
previous forecasts. The strategy at BRPM remains to maximise
Merensky production and supplement with shallow UG2 reef to increase
operational flexibility, subject to an evaluation of the UG2 General
Facies being mined at BRPM South shaft.

The impact of safety stoppages on operations reduced by 50% compared
to the corresponding period in 2012 and amounted to a loss of 44 085
milled tonnes or 4 883 4E ounces, highlighting the importance of the
continued improvements in safety performance.

The increase in UG2 contribution resulted in an increase in toll
concentrating volumes from 41 786 tonnes to 89 899 tonnes. The grade
of UG2 toll treated improved by 10.5% from 3.35g/t 4E to 3.70g/t 4E.
The BRPM concentrator recovery of 86.98% was in-line with
expectations. A routine inspection on 11 June 2013 of the primary
mill at BRPM revealed damage to the trunnion which necessitates
replacement of the mill discharge end. The repair work has been
scheduled for August and will result in a two to three week
concentrator shutdown. Run of mine ore will be stockpiled ahead of
the concentrator and will be processed during the remainder of the
year.

Operating costs

Total cash operating costs increased by 2.0% from R969 million in
the first half of 2012 to R988 million in the period under review.
Cash operating costs per tonne milled increased by 7.8% from R851 to
R917 per tonne due to the lower volumes. The 4E built-up head grade
and consequent 4E ounces in concentrate had a positive impact on the
cash operating cost per platinum ounce ending 1.3% higher at R11
756/Pt oz for the first six months of 2013 compared to R11 606/Pt oz
in the first half of 2012.

Capital expenditure

Capital expenditure reduced by R75 million or 14.3% from R521
million in the first half of 2012 to R446 million as a result of
lower expenditure on stay-in-business (SIB) (R67.3 million), lower
expenditure on replacement projects (R70.7 million) and higher
expenditure on expansion projects and drilling (R63 million)

SIB expenditure decreased from R116.2 million during the first half
of 2012 to R48.9 million as a number of large once-off projects
representing 46% of SIB expenditure in 2012 were completed such as
the ICT/Supply Chain migration and Tailings Evaporation and Tailings
Line projects. The Chairlift at South shaft also remains on hold for
2013 yielding a R14.7 million lower expenditure compared to the
first six months of 2012.

The reduction in replacement capital is attributed to a R58.8
million reduction in BRPM Merensky Phase II expenditure due to
project completion and a R11.7 million reduction in BRPM Merensky
Phase III expenditure due to rescheduled procurement of mechanical
and electrical infrastructure.

Expansion capital which is mainly represented by the Styldrift I
project expenditure increased by R63 million in line with the
project    execution   schedule.    Project   expenditure remains
significantly below budget.

BRPM Phase III Merensky replacement project

Phase III involves the extension of North shaft Merensky decline
from 11 level down to 15 level at the mine boundary. At the end of
June the project had progressed to 49% completion against a planned
completion of 44% and is 66 days ahead of schedule. Development is
633 metres ahead of schedule with 5 004 metres completed against a
plan 4 371 metres. Project completion is forecast at two months
ahead of schedule in 2017. Project expenditure to date is at R489
million against a budget of R603 million with an estimated cost at
completion of R1.17 billion representing a saving of R102 million.

Styldrift I expansion project

Project scope, schedule and cost revision

During the first half of 2013 we concluded the approval of the
optimisation study completed in 2012, culminating in the project
budget being reduced from the original R11.8 billion to R11.39
billion and the project schedule being extended by 13 months.

The reduction in the overall project cost being achieved through a
combination of R323 million project savings accrued to date and R93
million reduction associated with the optimised design, deriving an
estimate at completion variance of R416 million. The extension in
the project schedule is attributable to the ramp up to steady state
being increased from 27 to 36 months, the inclusion of additional
shaft and underground infrastructure.

The overall project cash flow has been revised in accordance with
the new project schedule.

Progress

The Styldrift I expansion project has advanced to 32.2% completion
against a planned completion of 31.2% based on the revised project
schedule resulting from the project optimisation study and remains
on schedule. Key activities during the first half of 2013 included
sinking of the main and service shafts, lateral development on 600
level (Merensky reef), 642 level (top of silos) and 708 level (shaft
ore loading level) and construction of the rock winder.

At the end of June the main shaft had progressed to 708 level which
was reached in April with completion to a final depth of 758 metres
scheduled for June 2014. The services shaft progressed to 642 level
with completion to 708 level scheduled for November 2013.

A total of 603 metres of lateral development was completed during
the period under review and includes station bulk excavations, ore
handling infrastructure and access haulages. A total of 2 349 metres
of development has been planned for 2013.
The project remains on schedule with production ramp up commencing
in July 2015 and steady state at 230 000 tonnes per month achieved
in July 2018.

Expenditure

Total capital expenditure at the end of the first half of 2013
amounted to R2.1 billion with total commitments to R2.8 billion.
Capital expenditure for the project on an earned value basis amounts
to R2.2 billion. The 2013 full year forecast expenditure is R728
million.

The forecast cost at completion remains at R1 billion below the
originally approved budget of R11.8 billion.

Financial review

The net revenue increase of 18.6% is mainly due to a 17% increase in
the average basket price to R18 294 per platinum ounce in the first
half of 2013 compared to R15 638 in 2012. Revenue from production
through the BRPM concentrator increased by 13.9% from R1 272.9
million to R1 449.7 million due to a 3% decrease in ounces produced
and a 17% increase in the rand basket price. This includes R8.7
million from Styldrift ounces treated and sold. Revenue from toll
concentrating of UG2 increased by 203% from R32.4 million for the
first six months of 2012 to R98.3 million for the period under
review as a result of a 157% increase in toll concentrating ounces
and a 17% increase in the rand basket price.

Gross profit margin improved by 68.0% from 12.5% to 21.0% for the
period ended 30 June 2013. This was due to the 18.6% increase in net
revenue offset by a 7% increase in cost of sales for the six months
ended 30 June 2013.

Depreciation charges increased by 40% from R113.1 million to R158.5
million mainly due to the depreciation of the R1 billion BRPM Phase
II Merensky replacement project capital that was commissioned in
June 2012 and depreciated thereafter.

Earnings before interest, tax, depreciation and amortisation
(EBITDA) as a percentage of revenue increased to 31.2% from 20% in
the first half of 2012 mainly as a result of the increase in the
basket price adjusted by a marginal increase in cash operating costs
at the operation.

Other income increased by R10.5 million from R21.2 million in the
first half of 2012 to R31.7 million for the period under review. The
increase is due mainly to an increase in the Impala royalties.

Finance income reduced by R12.3 million to R22.3 million and relates
to interest earned on cash on hand including dividends received on
the Nedbank preference share investment.

Administration expenditure decreased by 3% to R61.4 million compared
to the same period last year.
The current income tax charge reduced to R7.4 million mainly due to
the reduction in finance income. Deferred tax increased from the
prior year due to higher BRPM JV profits.

During the six months ended 30 June 2013, the Company increased its
cash and cash equivalents by R88.4 million after funding all capital
expenditure of R446 million.

At 30 June 2013 the RBPlat Group’s balance sheet remained ungeared
with cash and near cash investments of R992 million. The R500
million Nedbank revolving credit facility was increased to R1
billion in July 2013 and the working capital facilities for the
Group increased from R258 million to R458 million. To date the
revolving credit facility remains undrawn.

At 30 June 2013 the RBPlat Group provided a R200 million guarantee
for the 400 houses that are currently being built as part of the
Group’s housing project. The increase in the working capital
facility from R258 million to R458 million was utilised for this
guarantee.

Market review

The platinum price declined by 13% in the first six months of 2013,
reaching a low of US$1, 317/oz in late June. This is despite the
growth in platinum investment demand as a result of the newly
launched domestic platinum exchange traded fund (ETF) which now
represents over 20% of total global platinum ETF holdings. Platinum
group metal (PGM) supply from South Africa is expected to be lower
than last year’s levels as the challenges facing the platinum sector
are expected to continue until end of the year with the possibility
of more industrial action in the second half of the year. This
should lead to higher PGM prices but given weak industrial demand
and the significant amount of above ground stocks, RBPlat is of the
view that PGM prices will remain relatively flat for the remainder
of the year.

Changes to the board of directors

We are pleased to announce the appointment of Mr Lucas Ndala as a
non-executive director to the board of directors (“Board”) with
effect from 28 May 2013.

Mr Ndala is a Chartered Accountant and is currently the Chief
Financial Officer of Royal Bafokeng Holdings Proprietary Limited. In
addition, Mr Ndala holds various directorships such as, Fraser
Alexander   Proprietary  Limited,   Atterbury   Investment  Holdings
Proprietary Limited and MB Technologies Limited.

The Board welcomes Mr Ndala’s appointment     as   a   strategic   step
towards the further growth of the Company.

Outlook
We remain committed to keeping our employees safe from any harm and
plan to build on the much improved safety record that we achieved in
the first half of the year, notwithstanding, the fatal accident at
South shaft. Full year production of approximately 2.3 million
tonnes milled is anticipated with a UG2 contribution of up to 20%,
subject to no material impact from unforeseen events. The mill end
repair scheduled for August may impact on milled tonnes. We
endeavour to invest every effort to process the majority of the
Merensky ore to be stockpiled ahead of the concentrator during the
shutdown by year end and will investigate means to increase toll
treatment of excess UG2 ore. Cost containment will remain a core
management focus for the remainder of the year.

Even though we anticipate significant deficits in the palladium and
platinum markets, we don’t expect prices to rise markedly from
current levels due to the amount of above ground stocks. This does
impact on the cash we generate from BRPM but we are confident that
we are still on track to fund our Styldrift I project as previously
envisaged. The increased facilities negotiated provide sufficient
flexibility to access the capital markets at the most opportune time
during 2014/15.

Steve Phiri                            Kgomotso Moroka
Chief Executive Officer                Chairman

8 August 2013

Johannesburg
12 Augustus 2013


JSE Sponsor
Macquarie First South Capital (Pty) Limited

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