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Unaudited Condensed Consolidated Interim Financial Statements For The Three And Nine Months Ended September 30, 2014
Atlatsa Resources Corporation
(Incorporated in British Columbia, Canada)
(Registration number 10022-2033)
(TSXV/JSE share code: ATL)
(NYSE MKT share code: ATL)
(“Atlatsa” or the “Company”)
(ISIN: CA0494771029)
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS
ENDED SEPTEMBER 30, 2014
Note: Expressed in Canadian Dollars unless otherwise stated)
Unaudited Condensed Consolidated Interim Statements of Financial Position
As at September 30, 2014
Unaudited Audited
Note September 30 December 31
2014 2013
Assets
Non-current assets
Property, plant and equipment 6 631,661,662 651,178,482
Capital work-in-progress 7 35,982,261 27,296,481
Intangible assets 293,894 326,350
Mineral property interests 8 5,560,786 7,612,443
Goodwill 8,655,573 8,845,940
Platinum producers’ environmental trust 3,556,121 3,292,979
Other non-current assets 529 540
Total non-current assets 685,710,826 698,553,215
Current assets
Inventories 6,893,351 373,698
Trade and other receivables 25,348,508 33,782,099
Cash and cash equivalents 13,815,349 40,655,103
Restricted cash 47,424 265,293
Total current assets 46,104,632 75,076,193
Total assets 731,815,458 773,629,408
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 (13,952,872) (10,119,860)
Share-based payment reserve 25,894,989 25,794,650
Accumulated loss (77,042,890) (64,673,717)
Total equity attributable to equity holders of the
239,567,084 180,886,430
Company
Non-controlling interest 193,261,383 198,227,542
Total equity 432,828,467 379,113,972
Liabilities
Non-current liabilities
Loans and borrowings 10 121,512,329 110,320,221
Finance lease obligation 169,356 -
Deferred taxation 117,059,655 124,519,382
Provisions 11,532,060 11,100,511
Total non-current liabilities 250,273,400 245,940,114
1
Current liabilities
Trade and other payables 47,749,803 71,878,955
Short-term portion of finance lease obligation 344,742 -
Short-term portion of loans and borrowings 10 619,046 76,696,367
Total current liabilities 48,713,591 148,575,322
Total liabilities 298,986,991 394,515,436
Total equity and liabilities 731,815,458 773,629,408
Unaudited Condensed Consolidated Interim Statements of Comprehensive Loss
For the periods ended September 30, 2014
Note Three months ended September Nine months ended
30 September 30
2014 2013 2014 2013
Revenue 70,388,828 54,165,421 182,779,509 147,673,671
Cost of sales (66,687,067) (59,008,705) (193,393,257) (166,573,860)
Gross profit/(loss) 3,701,761 (4,843,284) (10,613,748) (18,900,189)
Administrative
expenses (2,827,500) (2,747,726) (8,500,404) (12,984,725)
Other income 11,623 3,020 24,624 102,255
Fair value (loss)/gain
and AG8 adjustments on
loans and borrowings (40,337) 5,350,889 497,696 34,798,556
Operating
(loss)/profit (845,547) (2,237,101) (18,591,832) 3,015,897
Finance income 60,280 64,532 212,643 254,288
Finance expense (3,209,350) (15,074,870) (11,525,875) (44,048,738)
Net finance expense (3,149,070) (15,010,338) (11,313,232) (43,794,450)
Loss before income tax (2,303,523) (17,247,439) (29,905,064) (40,778,553)
Income tax 1,743,133 1,791,973 4,565,207 7,443,553
Loss for the period (560,390) (15,455,466) (25,339,857) (33,335,000)
Other comprehensive
loss
Foreign currency
translation
differences for
foreign operations (6,045,346) (5,569,143) (8,358,821) (23,461,918)
Other comprehensive
loss for the period,
net of income tax (6,045,346) (5,569,143) (8,358,821) (23,461,918)
Total comprehensive
loss for the period (6.605.736) (21,024,609) (33,698,678) (56,796,918)
Loss attributable to:
Owners of the Company (519,671) (12,879,928) (12,369,173) (28,335,424)
Non-controlling
interest (40,719) (2,575,538) (12,970,684) (4,999,576)
Loss for the period (560,390) (15,455,466) (25,339,857) (33,335,000)
2
Total comprehensive
loss attributable to:
Owners of the Company (3,812,787) (10,982,491) (16,252,241) (23,772,360)
Non-controlling
interest (2,792,949) (10,042,118) (17,446,437) (33,024,558)
Total comprehensive
loss for the period (6,605,736) (21,024,609) (33,698,678) (56,796,918)
Unaudited Condensed Consolidated Interim Statements of Changes in Equity
For the periods ended September 30, 2014
Attributable to equity holders of the Company
Share Treasury Con- Foreign Share- Accu- Total Non- Total
Capital Shares vertible currency based mulated control
pre- trans- payment loss -ling
ference lation reserve interes
shares reserve t
For the
period ended
September 30,
2013
Balance at (18,7 205,2
January 1, 71,967, (4,991,7 162,910,0 (9,797,65 25,285,8 (264,16 92,60 224,049 57,22
2013 083 26) 00 7) 51 6,155) 4) ,827 3
Total
comprehensive
income/(loss)
for the
period
Loss for (28,3 (33,3
the period (28,335 35,42 (4,999, 35,00
- - - - - ,424) 4) 576) 0)
Other
comprehensive
income/(loss)
Foreign
currency (23,4
translation (248,491 4,563 (28,024 61,91
differences - - - 4,811,555 ) - ,064 ,982) 8)
Total
comprehensive
income/(loss) (23,7 (56,7
for the (248,491 (28,335 72,36 (33,024 96,91
period - - - 4,805,821 ) ,424) 0) ,558) 8)
Transactions
with owners,
recorded
directly in
equity
Contributions
by and
distributions
to owners
Share-
based payment 325,2 325,2
transactions - - - - 325,239 - 39 - 39
Total
contributions 325,2 325,2
by and - - - - 325,239 - 39 - 39
3
distributions
to owners
Balance at (42,2 148,7
September 30, 71,967, (4,991,7 162,910,0 (4,986,10 25,362,5 (292,50 39,72 191,025 85,54
2013 083 26) 00 2) 99 1,579) 5) ,269 4
For the
period ended
September 30,
2014
Balance at 180,8 379,1
January 1, 71,967, (4,991,7 162,910,0 (10,119,8 25,794,6 (64,673 86,43 198,227 13,97
2014 083 26) 00 60) 50 ,717) 0 ,542 2
Issue of 74,782, 74,78 74,78
Shares 500 - - - - - 2,500 - 2,500
Acquisition
of shares in
Bokoni
Platinum
Holdings 12,480, 12,48
(Pty) Ltd - - - - - - - 278 0,278
Conversion of
Convertible
Preference 162,910 (162,910,
shares ,000 - 000) - - - - - -
Total
comprehensive
loss for the
period
Loss for (12,3 (25,3
the period (12,369 69,17 (12,970 39,85
- - - - - ,173) 3) ,684) 7)
Other
comprehensive
loss
Foreign
currency (3,88 (8,35
translation (3,833,01 3,068 (4,475, 8,821
differences - - - 2) (50,056) - ) 753) )
Total
comprehensive (16,2 (33,6
loss for the (3,833,01 (12,369 52,24 (17,446 98,67
period - - - 2) (50,056) ,173) 1) ,437) 8)
Transactions
with owners,
recorded
directly in
equity
Contributions
by and
distribution
s to owners
Share-
based payment 150,3 150,3
transactions - - - - 150,395 - 95 - 95
Total
contributions
by and
distributions
to owners - - - - - - - - -
Balance at 239,5 432,8
September 30, 309,659 (4,991,7 (13,952,8 25,894,9 (77,042 67,08 193,261 28,46
2014 ,583 26) - 72) 89 ,890) 4 ,383 7
4
Unaudited Condensed Consolidated Interim Statements of Cash Flows
For the periods ended September 30, 2014
Note Three months ended Nine months ended
September 30 September 30
2014 2013 2014 2013
Cash flows from operating
activities
Cash generated/(utilised) by 11
operations 10,046,722 7,384,307 (11,285,354) (24,621,853)
Interest received 33,310 40,587 133,894 173,339
Interest paid (335,225) (21) (667,989) (3,211)
Taxation paid - - (353,721) -
Cash generated/(utilised) by
operating activities 9,744,807 7,424,873 (12,173,170) (24,451,724)
Cash flows from investing
activities
Acquisition of capital-work-in- 7
progress (7,959,898) (12,492,210) (28,353,858) (37,665,559)
Acquisition of property, plant and 6
equipment - - (1,336) -
Proceeds on disposal of property,
plant and equipment - 66,040 4,080 281,320
Investment in environmental trusts (88,935) (104,770) (269,448) (327,633)
Cash utilised by investing
activities (8,048,833) (12,530,940) (28,620,562) (37,711,872)
Cash flows from financing
activities
Long term borrowings raised – New
Senior Debt Facility - - 6,256,450 -
Long term borrowings raised –
Shareholder loan - - 6,011,099 -
Long term borrowings raised –
Working Capital Facility 1,018,656 - 2,405,681 -
Proceeds on issue of Atlatsa
Shares - - 74,782,500 -
Long term borrowings repaid – New
Senior Debt Facility - - (74,782,500) -
Repayment of Finance Lease - - (93,016) -
Long term borrowing raised –
Consolidated Facility - 15,673,960 - 70,451,806
Repayment of other loans (159,533) - (490,284) (349,421)
Settlement of other loans provided - 293,604 - 293,604
Cash generated from financing
activities 859,123 15,967,564 14,089,930 70,395,989
Effect of foreign currency
translation (566,971) (1,052,686) (135,952) (2,289,587)
5
Net increase/(decrease) in cash
and cash equivalents 1,988,126 9,808,811 (26,839,754) 5,942,806
Cash and cash equivalents,
beginning of period 11,827,223 10,714,880 40,655,103 14,580,886
Cash and cash equivalents, end of
period 13,815,349 20,523,691 13,815,349 20,523,691
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
For the periods ended September 30, 2014
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 February 5, 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 for the nine months ended September 30, 2014 of $28.4 million
(six months ended June 30, 2014: $24.8 million and fiscal 2013: net profit $99.9 million)
and as of that date its total assets exceeded its total liabilities by $432.8 million(six
months ended June 30, 2014: $439.3 million and fiscal 2013: $379.1 million).
The Company completed part of Phase Two of its restructuring and recapitalising plan
(“Restructure Plan”) on December 13, 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 proceeds of which were used to reduce the outstanding debt to
RPM;
- the purchase consideration payable for the sale of the Boikgantsho Project was paid to the
Company on December 13, 2013, excluding an amount of $2.9 million (ZAR29.0 million) 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;
- RPM subscribed for additional shares in Bokoni Platinum Holdings Proprietary Limited
(“Bokoni Holdco”) to the value of $192.2 million (ZAR1,939.4 million). Bokoni Holdco
utilised these funds to repay the debt of $192.2 million (ZAR1,939.4 million) outstanding
between Bokoni Holdco and RPM;
- The 2009 Senior Debt Facility was repaid in full and the New Senior Debt Facility between
Plateau and RPM as signed on March 27, 2013 was made effective. The amount available under
the New Senior Debt Facility was $228.0 million (ZAR2,300 million) of which $220.6 million
(ZAR2,225.7 million), including interest was utilised by December 31, 2013.
The net result was the Group’s debt was reduced by $357.9 million (ZAR3,610.4 million).
In addition, a Working Capital Facility was provided by RPM to fund the Group’s
administrative and corporate expenses. The Working Capital Facility was made available to
Plateau up to a maximum of $3 million (ZAR30 million) per year during each of 2013, 2014 and
2015 for an aggregate facility of $8.9 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 December 31, 2018.
6
The restructuring and recapitalising plan was finalised by January 31, 2014 resulting in the
amount outstanding under the New Senior Debt Facility being reduced by a further $74.8
million (ZAR750 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 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 November 1, 2013
until November 30, 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 $35.7 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 $47.1
million (ZAR475.0 million), provided that the amount advanced shall not exceed the actual
cash requirements of Bokoni Mine for that month. In July 2014, the Advance agreement was
extended to December 31, 2015.
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 $13.9 million
(ZAR140 million) will be deferred to be paid from April 2015 over 9 equal instalments;
- the available/undrawn facility of the $8.9 million (ZAR90 million) Working Capital
Facility will be made available in the event Bokoni Mine requires additional cash
resources;
- RPM will consider availability of the $2.9 million (ZAR29 million) outstanding on the sale
of the Boikgantsho Project that took place on December 13, 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 $5.9 million (ZAR60 million), currently committed and
held in escrow, as cash resources.
On November 10, 2014, a letter of support was received from Anglo Platinum to provide
financial support up to a maximum of $41.8 million (ZAR422 million) to March 31, 2016, in
the event of unforeseen circumstances not within the Company’s control, that may result in
Bokoni Mine not meeting its planned cash forecasts.
- This letter of support is subject to the following terms and conditions:
Bokoni Mine continues to operate according to the current plan as agreed with RPM;
- Bokoni Mine assesses and implements any opportunities identified to optimise revenue and
production and minimize costs and capital expenditure in order to minimize funding
requirements;
- the backlog of the trade payables relating to Anglo Platinum of approximately $13.9
million (ZAR 140 million) to be repaid by increasing the facility available under the New
Senior Debt Facility. This is to be completed within 3 months from November 10, 2014 and
if it is not possible to implement this as part of the New Senior Debt Facility then
another facility will be entered into under similar terms;
- Bokoni Mine to continue to pay any advances including ithe accounts payable balances due
to Anglo Platinum within 30 days from the end of the month in which such advance is made.
If there are valid disputes, this is to be resolved within 60 days and if the amount is
due to Anglo Platinum, the amount must be paid within 5 days thereafter;
7
- the amendments to the Working Capital Facility, to access the $2.9 million (ZAR29 million)
outstanding from RPM for the sale of Boikgantsho, are finalized and executed within 30
days from November 10, 2014;
- definitive agreements in respect of the purchase by RPM of at least a further 25% in the
Kwanda North prospecting rights, held by Kwanda Platinum Mine Proprietary Limited
(“Kwanda”), and at least 60% in the Central Block prospecting rights, held by Plateau, are
executed within six months from November 10, 2014;
- the Atlatsa executives to subscribe for $5.9 million (ZAR 60 million) of equity in Atlatsa
by March 31, 2015;
- the financial support will be withdrawn if Anglo Platinum sells its shareholding in Bokoni
Holdco.
The current liabilities of the Group are $48.7 million compared to the current assets
(excluding restricted cash) of $46.1 million. This arises as a result of the $13.9 million
(ZAR140 million) backlog of trade payables owed to Anglo Platinum (discussed above). By
initial agreement with Anglo Platinum this amount was deferred and Bokoni Mine will start
repaying $1.5 million (ZAR15.6 million) a month from April 2015 to December 2015. In terms
of the letter of support received on November 10, 2014, this will be paid as part of the New
Senior Debt Facility (discussed above). This will enable the Company to manage its liquidity
position.
The consolidated interim financial statements are prepared on the basis of accounting
policies applicable to a going concern. This basis presumes that the conditions set out in
the letter of support with Anglo Platinum, dated November 10, 2014, as described above, will
be met. In the event the above terms are not met, these conditions give rise to a material
uncertainity which may cast significant doubt about the ability of the Company and its
subsidiaries to continue as going concerns and therefore they may be unable to realize their
assets and discharge their liabilities in the normal course of business.
3. STATEMENT OF COMPLIANCE
These condensed consolidated interim financial statements have been prepared in accordance
with IAS 34 Interim Financial Reporting. 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 annual consolidated financial
statements of the Group as at and for the year ended December 31, 2013. However, selected
explanatory notes are included to explain events and transactions that are significant to an
understanding of the changes in the Group’s financial position and performance since the
last annual consolidated financial statements as at and for the year ended December 31,
2013. The annual consolidated financial statements of the Group as at and for the year ended
December 31, 2013 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 December31, 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
8
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 April 1, 2015
- Defined Benefit Plans: Employee Contributions (Amendments to IAS 19)
Effective for the financial year commencing April 1, 2016
- IFRS 14 Regulatory Deferral Accounts
Effective for financial year commencing January 1, 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.
9
5. FINANCIAL RISK MANAGEMENT
Summary of the carrying value of the Group’s financial instruments
At September 30, 2014 Financial
liabilities
Loans and at amortised
receivables cost
Platinum Producers’ Environmental Trust** 3,556,121 -
Trade and other receivables* 23,128,404 -
Cash and cash equivalents* 13,815,349 -
Restricted cash* 47,424 -
Loans and borrowings* - 122,131,375
Trade and other payables* - 39,421,400
At December 31, 2013 Financial
liabilities
Loans and at amortised
receivables 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* - 35,463,921
*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 122,131,375 122,131,375 187,016,588 187,016,588
The carrying amount of loans and borrowings approximate fair value, as the loans were recognized
at fair value on December 13, 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
10
Nine months Year ended
ended September December 31
30
2014 2013
6. PROPERTY PLANT AND EQUIPMENT
Summary
Cost
Balance at beginning of period 780,046,204 856,549,652
Additions 1,336 278,200
Transferred from capital work-in-progress 21,711,408 41,942,185
Disposals - (2,982,768)
Adjustment to rehabilitation assets - 2,697,102
Effect of translation (17,399,844) (118,438,167)
Balance at end of period 784,359,104 780,046,204
Accumulated depreciation and impairment losses
Balance beginning of period 128,867,722 108,092,747
Depreciation for the period 27,375,953 39,397,747
Disposals - (1,964,190)
Effect of translation (3,546,233) (16,658,582)
Balance at end of period 152,697,442 128,867,722
Carrying value 631,661,662 651,178,482
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.
Nine months Year ended
ended September December 31
30
2014 2013
Balance at beginning of period 27,296,481 20,027,764
Additions 28,975,941 50,987,358
Transfer to property, plant and equipment (21,711,408) (41,942,185)
Capitalisation of borrowing costs 2,278,113 1,502,507
Effect of translation (856,866) (3,278,963)
Balance at end of period 35,982,261 27,296,481
Capital work-in-progress is funded through cash generated from operations and available
facilities (refer note 2).
8. MINERAL PROPERTY INTERESTS
Balance at beginning of year 7,612,443 11,903,918
Mineral property interests sold - (3,449,797)
Amortisation (2,051,406) -
Effect of translation (251) (841,678)
Balance at end of period 5,560,786 7,612,443
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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 losses 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 resulting 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.
Nine months ended Year ended
September 30 December 31
2014 2013
Share capital
Share capital at the beginning of the period 71,967,083 71,967,083
125,000,000 shares issued* 74,782,500 -
Convertible preference shares converted** 162,910,000 -
Share caital at the end of the period 309,659,583 71,967,083
Treasury shares 4,991,726 4,991,726
* On January 31, 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 14)
** On January 14, 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 14)
Treasury shares relate to shares held by the Bokoni ESOP Trust in Atlatsa, which is consolidated
by the Group.
10. LOANS AND BORROWINGS
Rustenburg Platinum Mines – Working Capital Facility
(related party) 5,593,217 3,039,000
Rustenburg Platinum Mines – New Senior Debt Facility
(related party) 115,876,551 176,691,263
Rustenburg Platinum Mines – Interest-free loan (related
party) - 2,928,688
Rustenburg Platinum Mines – Shareholder loan (related
party) - 3,267,477
Other 661,607 1,090,160
122,131,375 187,016,588
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Short-term portion
Rustenburg Platinum Mines – New Senior Debt Facility
(related party) - (75,975,000)
Other (619,046) (721,367)
Non-current liabilities 121,512,329 110,320,221
The carrying value of the Group’s loans and borrowings changed during the year as follows:
Nine months ended Year ended
September 30 December 31
2014 2013
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 (490,284) (695,785)
Loan from RPM – New Senior Debt Facility 6,256,450 237,770,925
Loan from RPM – Shareholder loan 6,011,099 3,451,333
Loan capitalised RPM – Shareholder loan (12,480,278) -
Loan from RPM – Working Capital Facility 2,405,681 3,194,816
Finance expenses accrued 12,446,195 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 (1,110,737) (748,112)
AG8 adjustments on New Senior Debt Facility 613,041 -
Effect of translation (3,753,880) (44,483,044)
Balance at end of the period 122,131,375 187,016,588
Short-term portion
RPM - New Senior Debt Facility - (75,975,000)
Other (619,046) (721,367)
Non-current portion 121,512,329 110,320,221
On January 31, 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 $153.6
million (ZAR1,550 million) up to December 31, 2015.
In March 2014, the New Senior Debt Facility was fully drawn.
On March 31, 2014, the Shareholder loan with RPM to the value of $9.6 million (ZAR91.2 million)
was capitalised. On June 30, 2014 an additional Shareholder loan with RPM to the value of $2.9
million (ZAR28.9 million) was capitalised.
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Three months ended Nine months ended
September 30 September 30
2014 2013 2014 2013
11. CASH GENERATED/(UTILISED) BY OPERATIONS
Loss before income tax (2,303,523) (17,247,439) (29,905,064 (40,778,553)
)
Adjustments for:
Finance expense 3,209,350 15,074,870 11,525,875 44,048,738
Finance income (60,280) (64,532) (212,643) (254,288)
Non-cash items:
Depreciation and amortisation 9,740,363 9,767,765 29,453,532 29,307,559
Equity-settled share-based 150,395 (6,170) 150,395 325,239
compensation
Loss on disposal of property, plant - (241,940) (4,080) 179,419
and equipment
Fair value gain and AG8 adjustment 40,337 (5,350,889) (497,696) (34,798,556)
on loans and borrowings
Cash generated/( utilised) before 10,776,642 1,931,665 10,510,319 (1,970,442)
ESOP transactions
ESOP cash transactions (restricted 16,632 159,442 52,153 195,252
cash)
Cash generated/(utilised) before 10,793,274 2,091,107 10,562,472 (1,775,190)
working capital changes
Working capital changes
Decrease/(increase) in trade and 3,998,289 (4,140,632) 7,880,804 (40,712,787)
other receivables
(Decrease)/increase in trade and (394,752) 11,372,340 (23,011,269 19,677,354
other payables )
Increase in inventories (4,350,089) (1,938,508) (6,717,361) (1,811,230)
Cash generated/(utilised) by 10,046,722 7,384,307 (11,285,354 (24,621,853)
operations )
12. SHARE-BASED PAYMENT ARRANGEMENTS
12.1 Equity-settled options
On August 20, 2014, the Company issued 5,142,882 share options to its independent directors in
terms of its approved share option plan at a strike price of ZAR3.813.
For independent directors employed for more than 6 months as at the grant date of the options,
one third of the share options will vest six months after the grant date, one third of the share
options will vest one year after the grant date and the last one third will vest eighteen months
after the grant date.
For independent directors employed for less than 6 months as at the grant date of the options,
one third of the share options will vest one year after the grant date, one third of the share
options will vest eighteen months after the grant date and the last one third will vest two
years after the grant date.
The share-based expense recognised during the period was $150,395.
12.2 Conditional Share Unit Plan
On August 20, 2014, the Company awarded 9,004,500 Conditional Share Units (CSU’s) to eligible
employees of Plateau entitling the employee to one common share of the Company on the vesting
date. These CSU’s will vest on March 31, 2017 after the Company’s Average Total Shareholder
Return (“TSR”) for the 2014, 2015 and 2016 years are assessed when compared to five specified
14
peer comparator companies. The CSU’s will vest based on the following ranking in relation to the
TSR:
Ranking of Atlatsa to peer comparator companies % of shares to vest
First 100
Second 90
Third 60
Fourth 40
Fifth or below 0
The share-based expense recognised during the period was $0.
13. 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,
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 December 13, 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.
Nine months ended September 30
2014 2013
Bokoni
Bokoni Mine Projects Total Mine Projects Total Note
EBITDA 12,593,145 (4,610) 12,588,535 37,290,894 (12,140) 37,278,754 (i)
Total Assets 747,632,606 3,053 747,635,659 784,012,584 99,932,185 883,944,769 (ii)
Three months ended September 30
2014 2013
Bokoni
Bokoni Mine Projects Total Projects Total
Mine Note
EBITDA 11,299,208 - 11,299,208 10,411,676 247 10,411,923 (i)
September September 2013
2014
(i) EBITDA – nine months ended
EBITDA for reportable segments 12,588,535 37,278,754
Net finance expense (11,313,232) (43,794,450)
Depreciation and amortisation (29,453,532) (29,307,559)
Corporate and consolidation adjustments (1,726,835) (4,955,298)
Consolidated loss before income tax (29,905,064) (40,778,553)
15
(ii) EBITDA – three months ended
EBITDA for reportable segments 11,299,208 10,411,923
Net finance expense (3,149,070) (15,010,338)
Depreciation and amortisation (9,740,363) (9,767,765)
Corporate and consolidation adjustments (713,298) (2,881,259)
Consolidated loss before income tax (2,303,523) (17,247,439)
September September 2013
2014
(iii) Total assets
Assets for reportable segments 747,635,659 883,944,769
Corporate and consolidation adjustments (15,820,201) (115,412,858
Consolidated total assets 731,815,458 768,531,911
14. EARNINGS PER SHARE
The calculation of basic loss per share for the three months ended September 30, 2014 of 0 cents
(2013: 3 cents) is based on the loss attributable to owners of the Company of $519,671 (2013:
$12,879,928) and a weighted average number of shares of 593,061,869 (2013: 424,791,411).
The calculation of basic loss per share for the nine months ended September 30, 2014 of 2 cents
(2013: 7 cents) is based on the loss attributable to owners of the Company of $12,369,173 (2013:
$28,335,424) and a weighted average number of shares of 593,061,869 (2013: 424,791,411).
The calculation of diluted loss per share for the three months ended September 30, 2014 of 0
cents (2013: 3 cents) is based on the loss attributable to owners of the Company of $519,671
(2013: $12,879,928) and a weighted average number of shares of 593,061,869 (2013: 424,791,411).
The calculation of diluted loss per share for the nine months ended September 30, 2014 of 2
cents (2013: 7 cents) is based on the loss attributable to owners of the Company of $12,369,173
(2013: $28,335,424) and a weighted average number of shares of 593,061,869 (2013: 424,791,411).
The share options and unvested treasury shares were excluded in determining diluted weighted
average number of common shares as their effect would have been anti-dilutive.
15. 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 $45.9 million (ZAR463 million) (“Vendor Finance Loan”), and
- RPM subscribed for 125 million common shares of the Company on January 31, 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
$153.6 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
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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 February 6, 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 $2.2 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 December 13, 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.
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.
Johannesburg
14 November 2014
JSE Sponsor
Macquarie First South Capital Proprietary Limited
17
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