Wrap Text
Atlatsa announces unaudited condensed consolidated interim financial statements for the 3 and 6 months 30 June 2014
Atlatsa Resources Corporation
(Incorporated in British Columbia, Canada)
(Registration number 10022-2033)
TSX/JSE share code: ATL
NYSE MKT share code: ATL
ISIN: CA0494771029
(”Atlatsa” or the “Company”)
ATLATSA ANNOUNCES ITS UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED 30 JUNE 2014
Atlatsa announces its unaudited condensed consolidated interim financial statements for the three and six months
ended 30 June 2014. This announcement should be read with the Company`s full Financial Statements and
Management Discussion & Analysis, for the three and six months ended 30 June 2014, available at www.atlatsa.com
and filed on www.sedar.com.
These financial statements have not been reviewed by the Company’s auditors
Quote:
ATLATSA RESOURCES CORPORATION
Condensed Consolidated Interim Statements of Financial Position
As at 30 June 2014
(Unaudited - Expressed in Canadian Dollars, unless otherwise stated)
Audited
Note 30 June 2014 31 December 2013
Assets
Non-current assets
Property, plant and equipment 6 644,894,298 651,178,482
Capital work-in-progress 7 31,978,811 27,296,481
Intangible assets 306,582 326,350
Mineral property interests 8 5,836,486 7,612,443
Goodwill 8,776,080 8,845,940
Platinum producers’ environmental trust 3,490,894 3,292,979
Other non-current assets 537 540
Total non-current assets 695,283,688 698,553,215
Current assets
Inventories 2,691,828 373,698
Trade and other receivables 29,668,956 33,782,099
Cash and cash equivalents 11,827,223 40,655,103
Restricted cash 47,492 265,293
Total current assets 44,235,499 75,076,193
Total assets 739,519,187 773,629,408
Equity and Liabilities
Equity
Share capital 9 309,659,583 71,967,083
Treasury shares 9 (4,991,726) (4,991,726)
Convertible preference shares - 162,910,000
Foreign currency translation reserve (10,691,443) (10,119,860)
Share-based payment reserve 25,776,280 25,794,650
Accumulated loss (76,523,219) (64,673,717)
Total equity attributable to equity holders of the Company 243,229,475 180,886,430
Non-controlling interest 196,054,333 198,227,542
Total equity 439,283,808 379,113,972
Liabilities
Non-current liabilities
Loans and borrowings 10 118,131,182 110,320,221
Finance lease obligation 240,659 -
Deferred taxation 120,420,482 124,519,382
Provisions 11,466,026 11,100,511
Total non-current liabilities 250,258,349 245,940,114
Current liabilities
Trade and other payables 48,911,272 71,878,955
Short-term portion of finance lease obligation 349,541 -
Short-term portion of loans and borrowings 10 716,217 76,696,367
Total current liabilities 49,977,030 148,575,322
Total liabilities 300,235,379 394,515,436
Total equity and liabilities 739,519,187 773,629,408
Approved by the Board of Directors on 14 August 2014
/s/ Harold Motaung /s/ Fikile De Buck
ATLATSA RESOURCES CORPORATION
Condensed Consolidated Interim Statements of Comprehensive Loss
For the periods ended 30 June 2014
(Unaudited - Expressed in Canadian Dollars)
Note Three months ended 30 June Six months ended 30 June
2014 2013 2014 2013
Revenue 58,559,742 48,427,522 112,390,681 93,508,250
Cost of sales (65,740,005) (54,136,228) (126,706,190) (107,565,155)
Gross loss (7,180,263) (5,708,706) (14,315,509) (14,056,905)
Administrative expenses (2,307,887) (6,146,445) (5,672,904) (10,236,999)
Other income 5,523 (45,856) 13,001 99,235
Fair value gain and AG8 adjustments
146,175 8,820,313 538,033 29,447,667
on loans and borrowings
Operating (loss)/profit (9,336,452) (3,080,694) (19,437,379) 5,252,998
Finance income 70,757 81,036 152,363 189,756
Finance expense (4,335,373) (14,747,586) (8,316,525) (28,973,868)
Net finance expense (4,264,616) (14,666,550) (8,164,162) (28,784,112)
Loss before income tax (13,601,068) (17,747,244) (27,601,541) (23,531,114)
Income tax 1,637,571 4,492,573 2,822,074 5,651,580
Loss for the period (11,963,497) (13,254,671) (24,779,467) (17,879,534)
Other comprehensive loss
Foreign currency translation differences
for foreign operations (19,519,225) (6,916,031) (2,313,475) (17,892,775)
Other comprehensive loss for the
period, net of income tax (19,519,225) (6,916,031) (2,313,475) (17,892,775)
Total comprehensive loss for the (31,482,722) (20,170,702) (27,092,942) (35,772,309)
period
Loss attributable to:
Owners of the Company (6,972,847) (9,290,962) (11,849,502) (15,455,496)
Non-controlling interest (4,990,650) (3,963,709) (12,929,965) (2,424,038)
Loss for the period (11,963,497) (13,254,671) (24,779,467) (17,879,534)
Total comprehensive loss
attributable to:
Owners of the Company (17,793,939) (8,100,515) (12,439,454) (12,789,869)
Non-controlling interest (13,688,783) (12,070,187) (14,653,487) (22,982,440)
Total comprehensive loss for the period (31,482,722) (20,170,702) (27,092,941) (35,772,309)
ATLATSA RESOURCES CORPORATION
Condensed Consolidated Interim Statements of Changes in Equity
For the periods ended 30 June 2014
(Unaudited - Expressed in Canadian Dollars)
Attributable to equity holders of the Company
Share Capital Treasury Shares Convertible
preference shares
For the period ended 30 June 2013
Balance at 1 January 2013 71,967,083 (4,991,726) 162,910,000
Total comprehensive income/(loss) for the period
Loss for the period - - -
Other comprehensive income/(loss)
Foreign currency translation differences - - -
Total comprehensive income/(loss) for the period - - -
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners
Share-based payment transactions - - -
Total contributions by and distributions to owners - - -
Balance at 30 June 2013 71,967,083 (4,991,726) 162,910,000
For the period ended 30 June 2014
Balance at 1 January 2014 71,967,083 (4,991,726) 162,910,000
Issue of Shares 74,782,500 - -
Acquisition of shares in Bokoni Platinum Holdings - - -
(Pty) Ltd
Conversion of Convertible Preference shares 162,910,000 - (162,910,000)
Total comprehensive loss for the period
Loss for the period - - -
Other comprehensive loss
Foreign currency translation differences - - -
Total comprehensive loss for the period - - -
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners
Share-based payment transactions - - -
Total contributions by and distributions to owners - - -
Balance at 30 June 2014 309,659,583 (4,991,726) -
Attributable to equity holders of the Company
Foreign currency Share-based Accumulated loss
translation reserve payment reserve
For the period ended 30 June 2013
Balance at 1 January 2013 (9,797,657) 25,285,851 (264,166,155)
Total comprehensive income/(loss) for the period
Loss for the period - - (15,455,496)
Other comprehensive income/(loss)
Foreign currency translation differences 2,846,307 (180,680) -
Total comprehensive income/(loss) for the period 2,846,307 (180,680) (15,455,496)
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners
Share-based payment transactions - 331,410 -
Total contributions by and distributions to owners - 331,410 -
Balance at 30 June 2013 (6,951,350) 25,436,581 (279,621,651)
For the period ended 30 June 2014
Balance at 1 January 2014 (10,119,860) 25,794,650 (64,673,717)
Issue of Shares - - -
Acquisition of shares in Bokoni Platinum Holdings (Pty) Ltd - - -
Conversion of Convertible Preference shares - - -
Total comprehensive loss for the period
Loss for the period - - (11,849,502)
Other comprehensive loss
Foreign currency translation differences (571,583) (18,370) -
Total comprehensive loss for the period (571,583) (18,370) (11,849,502)
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners
Share-based payment transactions - - -
Total contributions by and distributions to owners - - -
Balance at 30 June 2014 (10,691,443) 25,776,280 (76,523,219)
Attributable to
equity holders of
the Company
Total Non-controlling Total
interest
For the period ended 30 June 2013
Balance at 1 January 2013 (18,792,604) 224,049,827 205,257,223
Total comprehensive income/(loss) for the period
Loss for the period (15,455,496) (2,424,038) (17,879,534)
Other comprehensive income/(loss)
Foreign currency translation differences 2,665,627 (20,558,402) (17,892,775)
Total comprehensive income/(loss) for the period (12,789,869) (22,982,440) (35,772,309)
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners
Share-based payment transactions 331,410 - 331,410
Total contributions by and distributions to owners 331,410 - 331,410
Balance at 30 June 2013 (31,251,063) 201,067,387 169,816,324
For the period ended 30 June 2014
Balance at 1 January 2014 180,886,430 198,227,542 379,113,972
Issue of Shares 74,782,500 - 74,782,500
Acquisition of shares in Bokoni Platinum Holdings (Pty) Ltd - 12,480,278 12,480,278
Conversion of Convertible Preference shares - - -
Total comprehensive loss for the period
Loss for the period (11,849,502) (12,929,965) (24,779,467)
Other comprehensive loss
Foreign currency translation differences (589,953) (1,723,522) (2,313,475)
Total comprehensive loss for the period (12,439,455) (14,653,487) (27,092,942)
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners
Share-based payment transactions - - -
Total contributions by and distributions to owners - - -
Balance at 30 June 2014 243,229,475 196,054,333 439,283,808
ATLATSA RESOURCES CORPORATION
Condensed Consolidated Interim Statements of Cash Flows
For the periods ended 30 June 2014
(Unaudited - Expressed in Canadian Dollars)
Note Three months ended 30 June Six months ended 30 June
2014 2013 2014 2013
Cash flows from operating activities
Cash generated/(utilised) by operations 11 5,766,244 (4,603,204) (21,332,097) (32,006,160)
Interest received 43,976 53,080 100,584 132,752
Interest paid - - (332,764) (3,190)
Taxation paid - - (355,454) -
Cash generated/(utilised) by operating 5,816,520 (4,550,124) (21,913,431) (31,876,598)
activities
Cash flows from investing activities
Acquisition of capital-work-in-progress 7 (9,771,040) (13,182,546) (20,984,160) (25,173,349)
Acquisition of property, plant and equipment 6 - - (1,343) -
Proceeds on disposal of property, plant and - 215,280 4,100 215,280
equipment
Investment in environmental trusts (91,049) (109,211) (180,513) (222,863)
Cash utilised by investing activities (9,862,089) (13,076,477) (21,161,916) (25,180,932)
Cash flows from financing activities
Long term borrowings raised – New Senior 55,204 - 6,287,119 -
Debt Facility
Long term borrowings raised – Shareholder 53,039 - 6,040,566 -
loan
Long term borrowings raised – Working 555,625 - 1,387,025 -
Capital Facility
Proceeds on issue of Atlatsa Shares - - 74,782,500 -
Long term borrowings repaid – New Senior - - (74,782,500) -
Debt Facility
Long term borrowings raised – Finance Lease 590,200 - 590,200 -
Long term borrowing raised – Consolidated - 13,048,894 - 54,777,846
Facility
Repayment of other loans (161,754) (171,250) (330,751) (349,421)
Cash generated from financing activities 1,092,314 12,877,644 13,974,159 54,428,425
Effect of foreign currency translation 63,615) (362,557) 279,607 (1,236,901)
Net decrease in cash and cash equivalents (3,023,170) (5,111,514) (28,827,881) (3,866,006)
Cash and cash equivalents, beginning of 14,850,392 15,826,394 40,655,103 14,580,886
period
Cash and cash equivalents, end of period 11,827,222 10,714,880 11,827,222 10,714,880
6
ATLATSA RESOURCES CORPORATIO
Notes to the Condensed Consolidated Interim Financial Statements
For the periods ended 30 June 2014
(Unaudited - Expressed in Canadian Dollars)
1. REPORTING ENTITY
Atlatsa Resources Corporation ("Company" or "Atlatsa") is incorporated in the Province of British Columbia, Canada. The
Company had a primary listing on the TSX Venture Exchange (“TSX-V”) and has a secondary listing on the New York Stock
Exchange (“NYSE MKT”) and the JSE Limited (“JSE”). Subsequent to year end, on 5 February 2014, the Group migrated
from the TSX Venture Exchange to the Toronto Stock Exchange (“TSX”). The consolidated financial statements comprise the
Company and its subsidiaries (together referred to as the “Group” and individually as “Group entities”). Its principal business
activity is the mining and exploration of Platinum Group Metals (“PGM”) through its mineral property interests. The Company
focuses on mineral property interests located in the Republic of South Africa in the Bushveld Complex. Atlatsa operates in
South Africa through its wholly-owned subsidiary, Plateau Resources Proprietary Limited (“Plateau”) which owns the Group’s
various mineral property interests and conducted the Group’s business in South Africa.
2. GOING CONCERN
Atlatsa incurred a net (loss)/profit for the six months ended 30 June 2014 of ($24.8 million) ( three months ended 31 March
2014: ($12.8 million) and fiscal 2013: $99.9 million) and as of that date its total assets exceeded its total liabilities by $439.3
(three months ended 31 March 2014: $467.9 and fiscal 2013: $379.1 million).
The Company completed a part of Phase Two of its restructuring and recapitalising plan (“Restructure Plan”) on 13 December
2013. This included the following transactions between the Company and Rustenburg Platinum Mine Limited (“RPM”), a
100% subsidiary of Anglo American Platinum Limited (“Anglo Platinum”):
- the sale and transfer of the Company’s interest in the Boikgantsho Project and the Eastern section of the Ga-Phasha
Project to RPM for a net consideration of $170.9 million (ZAR1,700.0 million);
- the purchase consideration payable for the sale of the Boikgantsho Project was paid to the Company on 13
December 2013, excluding an amount of $2.9 million (ZAR29.0 million) in respect of the Boikgantsho Project information
which is payable on the date of execution of the notarial deed of extension of the RPM Mining Right to include the
Boikgantsho Prospecting Rights. The proceeds were used to reduce the outstanding debt to RPM;
- RPM subscribed for additional shares in Bokoni Platinum Holdings Proprietary Limited (“Bokoni Holdco”) to the value of
$194.9 million (ZAR1,939.4 million). Bokoni Holdco utilised these funds to repay the debt outstanding between Bokoni
Holdco and RPM of $194.9 million (ZAR1,939.4 million);
- The 2009 Senior Debt Facility was repaid in full and the New Senior Debt Facility between Plateau and RPM as signed on
27 March 2013 was made effective. The amount available under the New Senior Debt Facility was $231.2 million
(ZAR2,300 million) of which $223.7 million (ZAR 2,225.7 million), including interest was utilised by 31 December 2013.
The net result was the Group’s debt was reduced by $362.8 million (ZAR 3,610.4 million).
In addition, a Working Capital Facility was provided by RPM to fund the Group’s administrative and corporate expenses. The
restructuring and recapitalising plan was finalised by 31 January 2014 resulting in the amount outstanding under the New
Senior Debt Facility being reduced by a further $74.8 million (ZAR 750 million).
The New Senior Debt Facility is only repayable once the company generates sufficient free cash flow. The delay in the
implementation of Phase Two resulted in the additional resources that were made available in terms of the New Senior Debt
facility being insufficient to meet the short term cash requirements of Bokoni Platinum Mines Proprietary Limited (“Bokoni
Mine”), due to the interest accruing on the available debt facility. The facility was fully drawn by March 2014.
An alternative funding arrangement was entered into with RPM in November 2013, whereby an advance on the Purchase of
Concentrate revenue (“Advance”) on the concentrate sales made to RPM by Bokoni Mine was provided. The Advance was
originally available from 1 November 2013 until 30 November 2014. The agreement with RPM with respect to the Advance
provides that RPM may advance funds to Bokoni up to an amount of the lower of 90% of an advance on revenue for the
preceding two months and $36,2 million (ZAR360.0 million), provided that the amount advanced shall not exceed the actual
cash requirements for that month. This agreement was renegotiated in March 2014 to provide that RPM may advance funds
to Bokoni Mine up to an amount of the lower of 95% of an advance on revenue for the preceding two months and $47.7
million (ZAR475.0 million), provided that the amount advanced shall not exceed the actual cash requirements for that month
of Bokoni Mine. In July 2014, the agreement was extended to 31 December 2015.
The Working Capital Facility was made available to Plateau up to a maximum of $3 million (ZAR30 million) per year to Atlatsa
during each of 2013, 2014 and 2015 for an aggregate facility of $9 million (ZAR90 million), including capitalised interest to
fund Atlatsa’s corporate and administrative expenses through to 2015. The Working Capital Facility is repayable in full by 31
December 2018.
In March 2014, further negotiations were entered into with RPM and the following were agreed to ensure the Group had
sufficient cash resources:
- RPM will meet its 49% shareholder commitment to match any cash resources that Atlatsa contributes;
- the backlog of trade payables relating to Anglo Platinum of approximately $14.1 million (ZAR140 million) will be deferred to
be paid from April 2015 over 9 equal instalments;
- the available facility of the $9 million (ZAR90 million) Working Capital Facility will be made available in the event Bokoni
Mine requires additional cash resources.
- RPM will consider the availability of the $2.9 million (ZAR29 million) outstanding on the sale of the Boikgantsho Project
that took place on 13 December 2013 which is currently payable by RPM to the Company on the date of execution of a
notarial deed of extension of the RPM Mining Right to include the Boikgantsho Prospecting Rights.
Atlatsa executives will make available $6 million (ZAR60 million) as cash resources.
The current liabilities of the Group were $50 million compared to the current assets (excluding restricted cash) of $44.2
million. This arises as a result of the $14.1 million (R140 million) backlog of trade payables owed to Anglo Platinum
(discussed above). By agreement with Anglo Platinum this amount was deferred and Bokoni will start repaying $0.9 million
(R9 million) a month from April 2015 to December 2015. As a result, $9.4 million (R93.4 million) of the total amount
outstanding is repayable twelve months after the 30 June 2014 reporting date. However, this amount is classified as a short
term liability due to the agreement with Anglo Platinum including the following:
- Bokoni Mine shall ensure that all current amounts due are paid thirty days from the end of the month the goods/service
was provided;
- any amounts in dispute must be resolved in the 30 day period;
- if the arrears of $14.1 million (R140 million) increases, Anglo Platinum shall be entitled to deduct the full amount of the
backlog from the Advance provided.
Thus far the Company has monitored and continues to monitor this closely together with Anglo Platinum and has not
defaulted on the above requirements. Therefore it is not anticipated that the outstanding balance will be required to be paid
immediately and the liquidity of the Company is being managed.
As a result of the above and the available cash facilities of which $6 million is committed and held in escrow the financial
statements are prepared on the basis of accounting policies applicable to a going concern.
3. STATEMENT OF COMPLIANCE
These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial
Reporting and the Financial Reporting Guides issued by the South African Institute of Chartered Accountants. They do not
include all of the information required for a complete set of International Financial Reporting Standards annual financial
statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year
ended 31 December 2012. The consolidated financial statements of the Group as at and for the year ended 31 December
2012 are available upon request from the Company’s registered office at 82 Grayston Drive, Sandton, South Africa or at
www.sedar.com.
4. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as
those applied by the Group in its annual consolidated financial statements as at and for the year ended 31 December 2013,
except for the following standards and interpretations adopted in the current financial year:
- Investment Entities (Amendments to IFRS 10, IFRS 12, and IAS 27)
- Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)
- Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36)
- Novation of Derivatives and Continuation of Hedge Accounting (Amendments to IAS 39)
- IFRIC 21 Levies
Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)
The amendments clarify that a qualifying investment entity is required to account for investments in controlled entities, as well
as investments in associates and joint ventures, at fair value through profit or loss; the only exception would be subsidiaries
that are considered an extension of the investment entity’s investment activities. The consolidation exemption is mandatory
and not optional.
Notwithstanding the above, the change has no significant impact on the measurement of the Group’s assets and liabilities,
including disclosure.
Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)
The amendments clarify when an entity can offset financial assets and financial liabilities.
The change has no significant impact on the measurement of the Group’s assets and liabilities.
Recoverable Amount Disclosures for Non-Financial Assets (Amendment to IAS 36)
The amendments reverse the unintended requirement in IFRS 13 Fair Value Measurement to disclose the recoverable
amount of every cash-generating unit to which significant goodwill or indefinite-lived intangible assets have been allocated.
Under the amendments, the recoverable amount is required to be disclosed only when an impairment loss has been
recognised or reversed.
The Group has applied the guidance retrospectively. Notwithstanding the above, the change has no significant impact on the
measurement of the Group’s assets and liabilities, including disclosure.
Novation of Derivatives and Continuation of Hedge Accounting (Amendments to IAS 39)
IAS 39 Financial Instruments: Recognition and Measurement requires an entity to discontinue hedge accounting if the
derivative hedging instrument is novated to a clearing counterparty, unless the hedging instrument is being replaced as part of
the entity’s original documented hedging strategy.
The amendments add a limited exception to IAS 39, to provide relief from discounting an existing hedging relationship, when
a novation was not contemplated in the original hedging documentation meets specific criteria.
The Group has applied the guidance retrospectively. Notwithstanding the above, the change has no significant impact on the
measurement of the Group’s assets and liabilities.
IFRIC 21 Levies
Levies have become more common in recent years, with governments in a number of jurisdictions introducing levies to raise
additional income. Current practice on how to account for these levies is mixed. IFRIC 21 provides guidance on accounting
for levies in accordance with IAS 37 Provisions, Contingent Liabilities and Assets.
The Group has applied the guidance retrospectively. Notwithstanding the above, the change has no significant impact on the
measurement of the Group’s assets and liabilities.
Standards and interpretations issued but not yet effective:
Effective for the financial year commencing 1 April 2015
- Defined Benefit Plans: Employee Contributions (Amendments to IAS 19)
Effective for the financial year commencing 1 April 2016
- IFRS 14 Regulatory Deferral Accounts
Effective for financial year commencing 1 January 2017
- IFRS 15 Revenue from Contracts with Customers
To be decided
- IFRS 9 Financial Instruments
All standards and Interpretations will be adopted at their effective date. Management is currently in the process of
assessing the applicability and impact of the above-mentioned, if any.
5. FINANCIAL RISK MANAGEMENT
Summary of the carrying value of the Group’s financial instruments
At 30 June 2014 Financial
Loans and liabilities at
receivables amortised cost
Platinum Producers’ Environmental Trust** 3,490,894 -
Trade and other receivables* 28,726,269 -
Cash and cash equivalents* 11,827,223 -
Restricted cash* 47,492 -
Loans and borrowings* - 118,847,399
Trade and other payables* - 39,421,400
At 31 December 2013 Financial
Loans and liabilities at
receivables amortised cost
Platinum Producers’ Environmental Trust** 3,292,979 -
Trade and other receivables* 32,730,150 -
Cash and cash equivalents* 40,655,103 -
Restricted cash* 265,293 -
Loans and borrowings* - 187,016,588
Trade and other payables* - 36,923,487
*Not measured at fair value and the carrying amount is a reasonable approximation of the fair value due to the short-term to maturity.
**Not measured at fair value and the carrying amount is a reasonable approximation of fair value due to this being cash deposits.
The following table shows the carrying amount and fair values of financial assets and financial liabilities, including their levels in the
fair value hierarchy. It does not include the fair value information for financial assets and financial liabilities not measured at fair
value, if the carrying value is a reasonable approximation of the fair value.
2014 2013
Carrying Fair value Carrying Fair value
value (level 2) value (level 2)
Loans and borrowings 118,847,399 118,847,399 187,016,588 187,016,588
The carrying amount of loans and borrowings approximate fair value, as the loans were recognized at fair value on 13 December
2013 and subsequently adjusted for all changes in drawdowns.
(a) Valuation techniques and unobservable inputs:
The following table shows the valuation techniques used in measuring level 2 fair values, as well as the significant
unobservable input used:
Type Valuation technique Significant unobservable inputs
Loans and borrowings Discounted cash flows Not applicable
(b) Key assumptions:
- JIBAR rates changing per quarter
- Cash flow assumption changes per quarter
- Drawdowns made in the quarter
Six months Year ended 31
ended 30 June December
6. PROPERTY, PLANT AND EQUIPMENT
2014 2013
Summary
Cost
Balance at beginning of period 780,046,204 856,549,652
Additions 1,343 278,200
Transferred from capital work-in-progress 16,740,432 41,942,185
Disposals - (2,982,768)
Adjustment to rehabilitation assets - 2,697,102
Effect of translation (6,486,955) (118,438,167)
Balance at end of period 790,301,024 780,046,204
Accumulated depreciation and impairment losses
Balance beginning of period 128,867,722 108,092,747
Depreciation for the period 17,906,105 39,397,747
Disposals - (1,964,190)
Effect of translation (1,367,101) (16,658,582)
Balance at end of period 145,406,726 128,867,722
Carrying value 644,894,298 651,178,482
7. CAPITAL WORK-IN-PROGRESS
Capital work-in-progress consists of mine development and infrastructure costs relating to Bokoni Mine and will be transferred
to property, plant and equipment when the relevant projects are commissioned.
Balance at beginning of period 27,296,481 20,027,764
Additions 20,984,160 50,987,358
Transfer to property, plant and equipment (16,740,432) (41,942,185)
Capitalisation of borrowing costs 751,643 1,502,507
Effect of translation (313,041) (3,278,963)
Balance at end of period 31,978,811 27,296,481
Capital work-in-progress is funded through cash generated from operations and available facilities (refer note 2).
11
ATLATSA RESOURCES CORPORATION
Notes to the Condensed Consolidated Interim Financial Statements
For the periods ended 30 June 2014
(Unaudited - Expressed in Canadian Dollars)
8. MINERAL PROPERTY INTERESTS
Six months Year ended 31
ended 30 June December
2014 2013
Balance at beginning of year 7,612,443 11,903,918
Mineral property interests sold - (3,449,797)
Amortisation (1,789,530) -
Effect of translation 13,573 (841,678)
Balance at end of period 5,836,486 7,612,443
The Group’s mineral property interest consists of various early stage exploration projects.
Mineral property interests are carried at cost less amortisation and impairment losses. Gains and losses on disposal of mineral
property interests are determined by comparing the proceeds from disposal with the cost less amortisation and impairment loss es
of the asset and are recognized net within profit or loss.
Mineral property interests transferred between segments (subsidiaries) is recognised at the nominal amount paid. The resultin g
profit or loss caused by the transfer of mineral property interests is recognised in profit or loss of the segment (subsidiary).
9. SHARE CAPITAL
Authorised and issued Number of shares
Common shares with no par value 554,288,473 201,888,472
B2 Convertible Preference shares of $0.1481 (ZAR1) each - 115,800
B3 Convertible Preference shares of $0.1481 (ZAR1) each - 111,600
The Company's authorised share capital consists of an unlimited number of common shares without par value. During 2009 the
convertible “B” preference shares were issued to facilitate the acquisition of the 51% shareholding in Bokoni Holdco.
Share capital
Share capital at the beginning of the period 71,967,083 74,150,116
125,000,000 shares issued* 74,782,500 -
Convertible preference shares converted** 162,910,000 -
Share issue costs - (2,183,033)
Share caital at the end of the period 309,659,583 71,967,083
Treasury shares 4,991,726 4,991,726
* On 31 January 2014 as part of Phase Two of the Restructure Plan, 125,000,000 common shares were issued to RPM for a consideration of
$74,782,500 (ZAR 750 million) (refer to note 15)
** On 14 January 2014 as part of Phase Two of the Restructure Plan the 227,400 “B “Preference shares were converted into common shares at a
value of $162,910,000 (refer to note 15)
Treasury shares relate to shares held by the ESOP Trust in Atlatsa, which is consolidated by the Group.
Six months ended Year ended 31
30 June December
2014 2013
10. LOANS AND BORROWINGS
Rustenburg Platinum Mines – Working Capital Facility (related party) 4,539,210 3,039,000
Rustenburg Platinum Mines – New Senior Debt Facility (related party) 113,497,100 176,691,263
Rustenburg Platinum Mines – Interest-free loan (related party) - 2,928,688
Rustenburg Platinum Mines – Shareholder loan (related party) - 3,267,477
Other 811,089 1,090,160
118,847,399 187,016,588
Short-term portion
Rustenburg Platinum Mines – New Senior Debt Facility (related party) - (75,975,000)
Other (716,217) (721,367)
Non-current liabilities 118,131,182 110,320,221
The carrying value of the Group’s loans and borrowings changed during the year as follows:
Balance at beginning of the year 187,016,588 435,791,920
Loan from RPM – Consolidated Facility - 68,921,455
Loan repaid RPM – New Senior Debt Facility (74,782,500) (620,494,506)
Loan from RPM – Transaction Cost Facility - 749,000
Loan repaid – Transaction Cost Facility - (769,223)
Loans repaid - other (330,751) (695,785)
Loan from RPM – New Senior Debt Facility 6,287,119 237,770,925
Loan from RPM – Shareholder loan 6,040,566 3,451,333
Loan capitalised RPM – Shareholder loan (12,480,278) -
Loan from RPM – Working Capital Facility 1,387,025 3,194,816
Finance expenses accrued 8,326,776 57,227,112
Fair value gain on additional drawdowns of Consolidated Facility - (25,900,282)
AG8 adjustments on Consolidated Facility - (8,512,338)
Derecognition of facility at a Bokoni Holdco and Plateau level - 133,100,219
Fair value gain on recognition of New Senior Debt Facility - (51,586,902)
Fair value gain on additional draw downs of New Senior Debt
Facility (538,033) (748,112)
Effect of translation (2,079,113) (44,483,044)
Balance at end of the period 118,847,399 187,016,588
Short-term portion
RPM - New Senior Debt Facility - (75,975,000)
Other (716,217) (721,367)
Non-current portion 118,131,182 110,320,221
On 31 January 2014, Anglo Platinum’s Board of Directors authorised an amount of $16.1 million (ZAR160 million) of accrued and
unpaid interest to accrue above the facility limit of $155.8 million (ZAR1,550 million) up to 31 December 2015.
Three months ended 30 June Six months ended 30 June
2014 2013 2014 2013
11. CASH GENERATED/(UTILISED) BY OPERATIONS
Loss before income tax (13,601,068) (17,747,244) (27,601,541) (23,531,114)
Adjustments for:
Finance expense 4,335,373 14,747,586 8,316,525 28,973,868
Finance income (70,757) (81,036) (152,363) (189,756)
Non-cash items:
Depreciation and amortisation 9,604,188 9,896,322 19,713,169 19,539,794
Equity-settled share-based compensation - 314,654 - 331,410
Loss on disposal of property, plant and - 421,359 4,100) 421,359
equipment
Rehabilitation adjustment (229,069) - - -
Fair value gain and AG8 adjustment on loans (146,175) (8,820,313) (538,033) (29,447,667)
and borrowings
Cash utilised before ESOP transactions (107,508) (1,268,672) (266,343) (3,902,106)
ESOP cash transactions (restricted cash) 17,051 13,862 35,521 35,810
Cash utilised before working capital changes (84,157) (1,254,810) (224,522) (3,866,296)
Working capital changes
Decrease/(increase) in trade and other 7,847,396 (3,667,855) 3,882,515 (36,572,155)
receivables
(Decrease)/increase in trade and other payables (212,336) 931,431 (22,616,517) 8,305,014
(Increase)/decrease in inventories (1,778,358) (611,970) (2,367,272) 127,277
Cash generated/(utilised) by operations 5,766,244 (4,603,204) (21,332,097) (32,006,160)
12. SEGMENT INFORMATION
The Group has two reportable segments as described below. These segments are managed separately based on the nature of
operations. For each of the segments, the Group’s CEO (the Group’s chief operating decision maker) reviews internal management
reports monthly. The following summary describes the operations in each of the Group’s reportable segments:
- Bokoni Mine - Mining of PGM’s.
- Projects - Mining exploration in Kwanda. In the previous year, this included Boikgantsho, Kwanda, and Ga-Phasha.
Boikgantsho and two farms in Ga-Phasha (De Kamp and Paschaskraal) were sold to RPM and the remaining two farms in
Ga-Phasha (Avoca and Klipfontein) were transferred to Bokoni Mine on 13 December 2013.
The majority of operations and functions are performed in South Africa. An insignificant portion of administrative functions are
performed in the Company’s country of domicile.
The CEO considers earnings before net finance expense, income tax, depreciation and amortisation (“EBITDA”) to be an
appropriate measure of each segment’s performance. Accordingly, the EBITDA for each segment is included in the segment
information. All external revenue is generated by the Bokoni Mine segment.
Six months ended 30 June
2014 2013
Bokoni Mine Projects Total Bokoni Mine Projects Total Note
EBITDA 1,293,937 (13,798) 1,280,139 26,879,218 (12,387) 26,866,831 (i)
Total Assets 757,186,901 3,095 757,189,996 793,851,575 103,835,787 897,687,362 (ii)
Three months ended 30 June
2014 2013
Bokoni Mine Projects Total Bokoni Mine Projects Total Note
EBITDA 808,051 (9,206) 798,845 6,256,833 (3,543) 6,253,290 (i)
June 2014 June 2013
(i) EBITDA – six months ended
EBITDA for reportable segments 1,280,139 26,866,831
Net finance expense (8,164,162) (28,784,112)
Depreciation and amortisation (19,713,169) (19,539,794)
Corporate and consolidation adjustments (1,004,349) (2,074,039)
Consolidated loss before income tax (27,601,541) (23,531,114)
(ii) EBITDA – three months ended
EBITDA for reportable segments 798,845 6,253,290
Net finance expense (4,264,616) (14,666,550)
Depreciation and amortisation (9,604,188) (9,896,322)
Corporate and consolidation adjustments (531,109) 562,338
Consolidated loss before income tax (13,601,068) (17,747,244)
(ii) Total assets
Assets for reportable segments 757,189,996 897,687,362
Corporate and consolidation adjustments (17,670,809) (119,670,348)
Consolidated total assets 739,519,187 778,017,014
13. EARNINGS PER SHARE
The calculation of basic loss per share for the three months ended 30 June 2014 of 1 cent (2013: 2 cents) is based on the loss
attributable to owners of the Company of $6,972,847 (2013: $9,290,962) and a weighted average number of shares of
530,811,430 (2013: 424,791,411).
The calculation of basic loss per share for the six months ended 30 June 2014 of 2 cents (2013: 4 cent) is based on the loss
attributable to owners of the Company of $11,849,502 (2013: $15,455,496) and a weighted average number of shares of
530,811,430 (2013: 424,791,411).
The calculation of diluted loss per share for the three months ended 30 June 2014 of 1 cents (2013: 2 cents) is based on the loss
attributable to owners of the Company of $6,972,847 (2013: $9,290,962) and a weighted average number of shares of
530,811,430 (2013: 424,791,411).
The calculation of diluted loss per share for the three months ended 30 June 2014 of 2 cents (2013: 4 cent) is based on the loss
attributable to owners of the Company of $11,849,502 (2013: $15,455,496) and a weighted average number of shares of
530,811,430 (2013: 424,791,411).
The share options were excluded in determining diluted weighted average number of common shares as their effect would have
been anti-dilutive.
14. RELATED PARTIES
In January 2014, Phase Two of the Restructure Plan was finalised by completing the following:
- Pelawan SPV Proprietary Limited (“Pelawan SPV”) converted its ”B” preference shares held by RPM into Pelawan SPV
ordinary shares and in turn Plateau converted its “B” Preference Shares held by Pelawan SPV in Plateau into Plateau
ordinary shares.
- As per the agreement between Pelawan SPV and Atlatsa, Atlatsa issued 227.4 million Atlatsa common shares to
Pelawan SPV in exchange for the Plateau ordinary shares. Following this issuance, Pelawan SPV immediately bought
back all SPV ordinary shares held by RPM and settled the buyback consideration by delivering to RPM 115.8 million
common shares in the Company.
- Atlatsa Holdings Proprietary Limited (“Atlatsa Holdings”), the Company’s majority shareholder acquired the 115.8 million
Atlatsa common shares that RPM received on a vendor financed basis for $46.5 million (ZAR463 million) (“Vendor
Finance Loan”), and
- RPM subscribed for 125 million common shares of the Company on 31 January 2014 to the value of $74.9 million
(ZAR750.0 million).
The funds from the 125 million shares were used to reduce the New Senior Debt Facility to $155.8 million (ZAR1,550 million).
Atlatsa Holdings provided security to RPM in relation to the Atlatsa Holdings Vendor Finance Loan by way of a pledge and
cession of its entire shareholding in Atlatsa, which shares remain subject to a lock-in arrangement through to 2020. Should
Atlatsa Holdings be unable to meet its minimum repayment commitments under the Atlatsa Holdings Vendor Finance Loan
between 2018 to 2020, Atlatsa will have a discretionary right, with no obligation, to step in and remedy such obligation in order to
protect its BEE (as defined below) shareholding status, subject to commercial terms being agreed between Atlatsa Holdings and
Atlatsa for that purpose and receipt of the necessary regulatory and shareholder approvals.
On 6 February, 2014, Plateau paid Securities Transfer Tax (“STT”) of $174,569 to the South
African Revenue Services, on behalf of Atlatsa Holdings. The STT was paid pursuant to the Transaction Cost Loan Agreement
dated May 28, 2013 in respect of the Restructure Plan, pursuant to which RPM funded a loan of $2.3 million (ZAR22.5 million) to
Plateau for the payment of the transaction costs of Atlatsa, Atlatsa Holdings and their affiliates. The Transaction Cost Loan
agreement was replaced by the Working Capital Facility on 13 December 2013. The STT relates to the sale of the 115.8 million
common shares from RPM to Atlatsa Holdings as part of the Restructure Plan. Per agreement between all parties involved, all
transaction costs would be paid for by Plateau and so the STT was accounted for as a transaction cost in the Group.
15. HEADLINE AND DILUTED HEADLINE EARNINGS PER SHARE
Headline earnings per share is calculated by dividing headline earnings attributable to shareholders of the Company by the
weighted average number of ordinary shares in issue during the period. Diluted headline earnings per share is determined by
adjusting the headline earnings attributable to shareholders of the Company and the weighted average number of ordinary shares
in issue during the period, for the effects of all dilutive potential ordinary shares, which comprise share options granted to
employees.
Headline earnings per share
The calculation of headline loss per share for the three months ended 30 June 2014 of 1 cents (2013: 2 cents) is based on
headline loss of $6,972,847 (2013: $8,869,603) and a weighted average number of shares of 530,811,430 (2012: 424,791,411).
The calculation of headline loss per share for the six months ended 30 June 2014 of 2 cents (2013: 4 cents) is based on headline
loss of $11,853,602 (2013: $15,034,137) and a weighted average number of shares of 530,811,430 (2013: 424,791,411).
The following adjustments to loss attributable to owners of the Company were taken into account in the calculation of headline loss
attributable to owners of the Company:
Three months ended 30 June Six months ended 30 June
2014 2013 2014 2013
Loss attributable to shareholders of the Company (6,972,847) (9,290,962) (11,849,502) (15,455,496)
- Loss(profit) on disposal of property, plant and
equipment - 421,359 (4,100) 421,359
Headline loss attributable to owners of the Company (6,972,847) (8,869,603) (11,853,602) (15,034,137)
Diluted headline earnings per share
The calculation of diluted headline loss per share for the three months ended 30 June 2014 of 1 cents (2013: 2 cents) is based on
headline loss of $6,972,847 (2013: $8,869,603) and a weighted average number of shares of 530,811,430 (2013: 424,791,411).
The calculation of diluted headline loss per share for the six months ended 30 June 2014 of 2 cents (2013: 4 cents) is based on
headline loss of $11,853,602 (2013: $15,034,137) and a weighted average number of shares of 530,811,430 (2013: 424,791,411).
The share options were excluded in determining diluted weighted average number of common shares as their effect would have
been anti-dilutive.
16. SUBSEQUENT EVENTS
There have been no events that have occurred after the reporting date that would have a material impact on the reported results.
Unquote
Johannesburg
14 August 2014
JSE Sponsor
Macquarie First South Capital Proprietary Limited
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