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ATLATSA RESOURCES CORPORATION - Atlatsa announces results for the quarter and half year ended June 30, 2013

Release Date: 14/08/2013 15:01
Code(s): ATL     PDF:  
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Atlatsa announces results for the quarter and half year ended June 30, 2013

Atlatsa 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 & HALF YEAR ENDED JUNE 30, 2013

Atlatsa achieves best operating quarter and half year performance in past five years at Bokoni
Mine with significant improvements in year-on-year Q2 and H1 operating and financial results:

     -     H1 PGM production increases by 28%
     -     H1 unit costs decrease by 10%
     -     Q2 cash operating profit improves by 185% to $4 million
     -     Restructure Plan remains on track
     -     Conditional approval obtained to migrate to the TSX

August 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 and six months ended
June 30, 2013. This release should be read together with the Company’s financial statements and
Management Discussion & Analysis filed on www.atlatsaresources.co.za and www.sedar.com.
Currency values are presented in South African Rand (ZAR), Canadian Dollars ($) and United States
Dollars (US$).

In commenting on the results Atlatsa’s Chief Commercial Officer, Joel Kesler, said, “The upward
quarterly trend in performance at Bokoni Mine continues, with all key operating and financial metrics
moving in the right direction. Our immediate goals remain re-positioning Bokoni towards the lower end
of the PGM* industry cost curve and generating improved cash flows from our operations, despite what
remains a challenging environment for South African PGM producers. These operational
improvements, together with our improved balance sheet after implementation of the Restructure Plan,
will place Bokoni and our Company in a strong position to achieve our growth strategy through to 2020”.

*PGM means platinum group metals (4E), comprising platinum, palladium, rhodium and gold.


Summary of operating and financial performance


                                                      Q2          Q2        %         H1          H1         %
Operating results
                                                     2013        2012     Change     2013        2012      Change

Tonnes milled                T                      361,071     289,575    24.7     664,035     532,629     24.7

Recovered grade              g/t milled,4E          3.72**        4.08     (8.8)     3.77        3.67        2.7

4E oz produced               oz                     42,901      34,098     25.8     78,944      61,897      27.5

UG2 mined to total
output                       %                       31.8         32.5     (2.2)     33.0        32.8        0.5

Primary development          M                       2,465       2,706     (8.9)     4,421       5,223      (15.3)

Capital expenditure          $m                      13.2         12.7     (3.9)     25.2        19.6       (28.6)
Operating cost/tonne
milled                       ZAR/t                   1,158       1,211      4.4      1,221       1,317       7.3

Operating cost/4E oz         ZAR/4E oz               9,743      10,285      5.3     10,264      11,363       9.7
Lost-time injury
frequency rate               Per 200,000
(“LTIFR”)                    hours worked            0.16         1.37     88.3      0.57        1.42       60.1
Total permanent
labour
(mine operations)            Number                  3,565       3,511      1.5      3,565       3,511       1.5
Total contractors
(mine operations)            Number                  1,717       1,963     (12.5)    1,717       1,963      (12.5)

Consolidated statement of comprehensive income summary
Expressed in Canadian                                                       %          H1         H1         %
                                        Q2 2013               Q2 2012
Dollars (000’s)                                                           Change      2013       2012      Change

Revenue                                  48,427               38,733         25      93,508      72,812      28.4

Cash operating costs***                  44,405               43,499        (2.1)    88,442      87,398      (1.2)

Cash operating profit/(loss)              4,022               (4,716)      185.3      5,066     (14,586)     134.7

Operating margin                          8.3%                (12.2%)       168       5.4%       (20%)        127

EBITDA****                                6,816               (8,541)      179.8     24,793     (22,141)      212

Loss after tax                          (13,255)              (40,412)      67.2     (17,880)   (81,679)     78.1

Non-controlling interest                 (3,964)              (19,342)      79.5     (2,424)    (39,073)     93.8

Loss attributable to Atlatsa
shareholders                             (9,291)              (21,069)      55.9     (15,455)   (42,606)     63.7

Basic and diluted loss per
share – cents                                 (2)               (5)          60        (4)        (10)        60

** Includes lower-grade open cast material.
*** Cash operating costs represent all on mine production and processing costs, excluding depreciation charges.
**** EBITDA 2013 numbers includes a fair value gain on re-pricing of Atlatsa debt facility from Anglo American Platinum.


Safety

Bokoni’s LTIFR for the quarter improved to 0.16 per 200,000 hours worked; an 88.3% improvement
when compared to Q2 2012.

After completion of H1 2013, on August 3, 2013 Bokoni Mine achieved 2 million fatality free shifts after
15 months of continuous operations without incident. This achievement was marred by an accident
which occurred on August 6, 2013 at Bokoni’s Vertical Shaft operations, where a contract miner lost his
life in a fall of ground incident.

Management at Bokoni is currently instituting remedial action in order to mitigate against the potential
recurrence of this unfortunate accident.

Operational results

This quarter marks the first anniversary since the appointment of the new management team at Bokoni
and a number of its on mine initiatives introduced during the past year are beginning to bear fruit, as
demonstrated by the significant improvement in all key production metrics over the period.

PGM ounces produced improved by 26% and 27.5% respectively, when measured on a quarterly and
half year comparative basis.

The improvement in production metrics can largely be attributed to:

     - improved operating crew efficiencies, with stoping teams now achieving on average
        314m²/crew, representing a 22% year-on-year improvement;

     - a new productivity linked bonus incentive scheme;

     - better mining flexibility through the creation of additional immediately stopable ore reserves
       (IMS), with one fully-equipped panel available for every two panels being mined;

     - improved geological potholing management through dedicated re and sub development crews
        having achieved a 64% year-on-year improvement in metres developed; and

     - improved support structures on the UG2 mining operations.

Primary development at the Bokoni operations has decreased year-on-year due to a deferral of UG2
expansion plans and the adoption of a new operating plan at Bokoni which extends through to 2020, as
detailed in the Company’s announcement on March 27, 2013.

Open cast mining operations

During Q2 2013, open cast mining commenced at Bokoni’s Merensky operations with the initial box-cut
and associated surface infrastructure being completed during the period. Mining operations are
currently in the ramp-up phase with the box-cut extending east to west along strike on the Merensky
reef sub-outcrop. Steady state open cast mining operations of 40,000 tpm are anticipated to be
achieved during September 2013.

Production mix

Bokoni Mine’s production mix will remain at a ratio of approximately 70% Merensky to 30% UG2 reef for
the foreseeable future, as UG2 expansion plans remain deferred in the medium term and open cast
mining operations are carried out on only the Merensky reef horizon. At current spot PGM prices, the
Merensky reef revenue basket per PGM ounce yields approximately 13% higher revenue than the UG2
basket price at Bokoni.

Financial results

Revenue

The Company’s revenue increased materially when measured on a quarterly and half year comparative
basis. These increases are attributable to much improved production and sales volumes, together with
an improved ZAR PGM revenue basket price achieved during the periods under review, impacted
largely by the weakening of the ZAR by 16.8% relative to the US$ over the comparative quarterly
period.

The ZAR PGM basket price achieved for Q2 2013 was 15.9% higher year-on-year at ZAR11,168 when
compared to ZAR9,640 for Q2 2012, whilst the US$ PGM basket price decreased by 0.9% year-on-year
to US$1,176 compared to US$1,186 in Q2 2012.

Operating costs

Despite increased production volumes, absolute cash operating costs over the comparative quarter and
half year periods remained relatively flat, notwithstanding annual wage increases of 8% and power
utility increases in excess of 25% over the same period. Cost containment was partly achieved through
employee numbers remaining relatively constant, whilst contract labour decreased by 12.5% during the
period under review.

ZAR per PGM ounce unit costs, representing the key operating cost efficiency measure for the
Company, decreased by 9.7% to ZAR 9,743/ PGM oz over the comparative half year period.

Absolute and unit cost cutting initiatives remain a key focus at the Bokoni operations, with further
reductions in unit costs anticipated from Q3 2013 onwards as a result of continued efficiency
improvements, together with ramp up of the Merensky open cast mining operations.


Capital

Capital expenditure at the Bokoni operations remained relatively constant in absolute terms, with stay in
business capital of $3.3 million (ZAR728/ PGM oz), remaining at approximately 8% of monthly
operating expenditure. Project expansion capital remains at between ZAR20 million ($2.1 million) to
ZAR25 million ($2.6 million) per month, primarily focused on the Brakfontein Merensky and Middelpunt
Hill UG2 shaft and mining footprint expansions, as underground mining operations ramp up from their
current level of 120,000 tpm to 160,000 tpm steady state in the medium term. During this ramp up
phase the Merensky open cast operations will be used to ensure that the Bokoni concentrator plants
run at their full installed processing capacity of 160,000 tpm.

Cash and available facilities

As at June 30, 2013 and the Group had unrestricted cash and equivalents of $10.7 million with
available undrawn facilities on its existing loan from Anglo American Platinum of $17.4 million. Available
debt facilities will increase to a maximum facility limit of ZAR1.55 billion ($165 million) on
implementation of the Revised Restructure Plan.

Earnings and profitability

The improved operational and cost performance at Bokoni Mine resulted in the Company achieving a
Cash operating profit of $4 million*** for the quarter under review, whilst EBITDA**** increased to $6.8
million during the same period.
The Company recognised a fair value gain of $8.8 million during the quarter, and $29.4 million for the
half year, 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 continues to incur significant finance charges (Q2 2013: $14.7 million) on its historical
outstanding debt owing to Anglo American Platinum, which will continue until such time as the Revised
Restructure Plan is implemented and its current attributable debt of ZAR3.67 billion ($390 million) is
reduced by approximately ZAR2.45 billion ($260.7 million), anticipated to be completed during Q3 2013.

Notwithstanding continued high levels of finance expenses, the Company managed to reduce its loss
attributable to shareholders and loss measured on a per share basis by approximately 60% over the
comparative periods, with its basic and diluted loss per share improving year-on-year from $0.05 cps to
$0.02 cps.

Revised Restructure Plan

On March 27, 2013, the Company announced that it had entered into a ZAR3.5 billion ($372.3 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.

During Q2 2013 the Company’s shareholders approved the Revised Restructure Plan in an
Extraordinary General Meeting of Shareholders held on June 28, 2013.

The implementation of the Revised Restructure Plan remains subject to the fulfilment or, where
appropriate, waiver of the following conditions precedent:

         -   All of the agreements constituting the Revised Restructure Plan becoming unconditional;
         -   Approval by the Competition Authorities of South Africa;
         -   Approval by the Exchange Control division of the South African Reserve Bank;
         -   Approval by the Department of Mineral Resources, South Africa; and
         -   Approvals by the TSX Venture Exchange, JSE Limited and NYSE-MKT.

The Revised Restructure Plan is anticipated to be completed during Q3 2013.
For additional information on the Restructure Plan refer to the press releases of Atlatsa dated February
2, 2012, March 15, 2012, March 30, 2012, May 3, 2012, June 15, 2012, July 26, 2012, September 7,
2012, September 27, 2012, October 2, 2012, October 22, 2012, December 3, 2012, January 21, 2013,
March 27, 2013, March 28, 2013, April 5, 2013 and July 2, 2013 as well as the material change reports
filed on February 13, 2012, September 27, 2012 and April 8, 2013 all of which are available on SEDAR
at www.sedar.com and the Company’s website www.atlatsaresources.co.za.

Migration to TSX

During Q2 2013, the Company received conditional approval from the Toronto Stock Exchange (TSX)
to list the Company’s common shares on the TSX at which point the Company’s common shares will
de-listed from the TSX Venture Exchange. The listing remains subject to certain conditions. These
conditions include, without limitation, final approval from the TSX and the completion of the proposed
Revised Restructure Plan.

The Company anticipates that the graduation to the TSX will take place following completion of the
Revised Restructure Plan, and will provide an update as to timing as it finalizes these details. Following
graduation to the TSX, Atlatsa’s common shares will trade on the TSX under the stock symbol “ATL”.
Accounting Policies and Going Concern

The FY 2012 financial statements are prepared on the basis of accounting policies applicable to a going
concern. The Revised Restructure Plan described above was successfully approved by Atlatsa
shareholders on June 28, 2013, but remains subject to fulfilment or waiver of certain conditions
precedent.

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. Shareholders should refer to the Q2 2013 MD&A for a discussion
of the Company as a going concern in Note 2 of the annual financial statements for the year ended
December 31, 2012, which continue to apply to the Company as of the date of this release.


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 after completion of its Revised
Restructure Plan.

Johannesburg
14 August 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
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 MKT 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 Revised restructure Plan 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 operating plan will continue to be
implemented as expected and will achieve improvements in production and operational efficiencies as
anticipated; the Revised Restructure Plan will be implemented in a timely manner; 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 Revised Restructure Plan in a timely
      manner, if at all;
-     uncertainties related to the continued implementation of the Bokoni Mine operating plan and open
      cast mining operations;
-    uncertainties related to the timing of the implementation of the Bokoni Mine deferred expansion
      plans;
-     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 at www.sec.gov and other disclosure documents that are
available at www.sedar.com.

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