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Atlatsa Announces Results for the Quarter Ended March 31, 2015
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)
ATLATSA ANNOUNCES RESULTS FOR THE QUARTER ENDED MARCH 31, 2015
Improved cash generating ability; ramp-up of expansion
projects on track
First quarter 2015 operational and financial features:
- Total tonnes milled decreased 4.4% quarter-on-quarter to
372,896
- 4E PGM* ounces produced remained relatively flat at 42,875
- Sales revenues decreased 2.8% to $52.3 million
- Average ZAR 4E PGM basket price decreased 6.5% quarter-on-quarter
- Cash generated by operations improved 103.3% to $0.9 million
- Ramp-up of two key expansion projects remains on track
- Lost-time injury frequency rate (“LTIFR”) at 1.04 per 200,000 hours worked
Atlatsa announces its operating and financial results for the
three months ended March 31, 2015. This release should be read
together with the Company’s unaudited condensed consolidated
interim financial statements for the three months ended March
31, 2015 (the “Consolidated Financial Statements”) and the
related Management Discussion and Analysis of Financial
Condition and Results of Operations (the “MD&A”) filed on
www.sec.gov and www.sedar.com, which are also available at
www.atlatsa.com. Currency values are presented in South
African Rand (ZAR), Canadian Dollars ($) and United States
Dollars (US$).
Harold Motaung, Chief Executive Officer of Atlatsa, said, “The
first quarter of 2015 was characterised by Section 54 safety
stoppages and a disappointing safety performance at the mine.
Production was also impacted by challenges associated with the
opencast operation as a result of community unrest in the
fourth quarter of 2014. The safety and health of our employees
remains one of our key focus areas and we continue to
encourage our employees and contractors to work safely at all
times.”
“The Company was able to generate cash from its operations as
well as maintain Bokoni Mine’s ramp-up profile at its two key
underground development shafts. Capital discipline, cost
containment and efficiency improvements remain key focus areas
for Atlatsa.”
* 4E PGM means platinum group metals comprising: platinum,
palladium, rhodium and gold.
Bokoni Mine operating and financial performance
Set out below are summaries of the key operating and financial
results for Bokoni Mine and the Company for the quarter ended
March 31, 2015.
%
Operating results Q1 2015 Q1 2014
change
Tonnes delivered t 372,661 395,957 (5.9)
Tonnes milled t 372,896 390,099 (4.4)
g/t
milled,
Recovered grade PGM 3.6 3.4(1) 4.7
PGM oz produced oz 42,875 42,820 0.1
UG2 milled to total
milled % 30.1 32.1 (6.2)
Primary development metres 2,195 2,686 (18.3)
Operating cost/tonne
milled ZAR/t 1,381 1,308 (5.6)
Operating cost/PGM
oz ZAR/PGM oz 12,013 11,918 (0.8)
Per
Lost Time Injury 200,000
Frequency Rate hours
(LTIFR) worked 1.04 0.96(1) (8.3)
Financial summary
Expressed in Canadian Dollars
Q1 2015 Q1 2014 % change
(000’s)
Revenue 52,311 53,831 (2.8)
Cash operating costs 55,125 50,859 (8.4)
Cash operating profit (2,814) 2,972 (194.7)
Cash operating margin (5.4%) 5.5% (197.4)
EBITDA(2) (3,419) 486 (804)
(1) Restated
(2) EBITDA means earnings before net finance costs, income tax,
depreciation and amortization. EBITDA is not a recognized
measure under International Financial Reporting Standards
(“IFRS”) and should not be construed as an alternative to net
earnings or loss determined in accordance with IFRS as an
indicator of the financial performance of Atlatsa or as a
measure of Atlatsa’s liquidity and cash flows. While EBITDA is
a useful supplemental measure of cash flow prior to debt
service, changes in working capital, capital expenditures and
taxes, Atlatsa’s method of calculating EBITDA may differ from
other issuers and, accordingly, EBITDA may not be comparable
to similar measures presented by other issuers. See the
section entitled “Segment Information” of the Consolidated
Financial Statements for a reconciliation of EBITDA to net
income / (loss).
Safety and health
Bokoni Mine’s LTIFR increased to 1.04 per 200,000 hours worked
during the quarter. Eight Section 54 safety stoppages were
imposed by the South African Department of Mineral Resources
(DMR) at the operations, resulting in a loss of 1,325 4E PGM
ounces. It remains critical that all employees and contractors
operating at Bokoni Mine work safely and adopt the principle
of zero harm.
Operational results
Tonnes milled at the mine decreased by 4.4% to 372,896 tonnes,
resulting in flat production of 42,875 4E PGM ounces compared
to 42,820 4E PGM ounces during the first quarter of 2014. This
slight decrease is as a result of safety stoppages at the
mine, frequent cuts in electricity supply as well as lower
production from the Klipfontein opencast mine. Operations at
the eastern section of the Klipfontein opencast mine remain
suspended.
Primary development decreased by 18.3% quarter-on-quarter to
2,195 metres as planned, following a strategic decision to
reduce development to a level sufficient to meet Bokoni Mine’s
stoping flexibility requirements. The current primary
development rate is expected to be sufficient to meet the
requirements of the mine’s growth plan.
Recoveries at the concentrator plant decreased by 0.7% to
89.2% and remained constant at 85.8% for the Merensky and UG2
concentrate, respectively. The decrease is as a result of
processing of lower grade ore from the opencast operation.
Financial results
Revenue decreased 2.8% quarter-on-quarter to $52.3 million as
a result of the 6.5% decrease in the average ZAR PGM basket
price for the quarter (ZAR11,569 compared to ZAR12,373).
Total cash operating costs increase of 8.4% is largely
attributable to:
- 10.8% increase in labour costs as a result of annual wage
increases and an increase in production bonus payments
during the period due to the increase in underground
production;
- marginal 3.8% increase in stores costs;
- 10.6% increase in utility costs as a result of increased
underground production and a 12.7% rate increase in the
power tariff by South Africa’s national utility, Eskom
Holdings Limited; and
- 29.1% increase in sundries due to a 9% increase in belt
maintenance contract payments as well as payment of
previously deferred service level agreement costs.
Total capital expenditure for Q1 2015 was $3.8 million
(compared to $11.2 million for Q1 2014), comprising 23%
sustaining capital and 77% project expansion capital
associated with the two key ramp-up shaft operations. The
decrease in capital expenditure is as a result of a strategic
decision by management to reduce costs without compromising
Bokoni Mine’s development plan.
The Company continued to improve its cash generating ability,
with operating activities generating cash of $0.9 million in
the first quarter of 2015, compared to $27.1 million utilised
by operations in the first quarter of 2014. As at March 31,
2015, Atlatsa had a cash balance of $4.6 million, excluding
restricted cash.
Earnings
The basic and diluted loss deteriorated to 2 cents per share
compared to basic and diluted loss of 1 cent per share, in the
first quarter of 2014.
Issued share capital
As at March 31, 2015 Atlatsa had 554,288,473 issued and
outstanding common shares.
Financial results – Atlatsa
Expressed in Canadian Dollars %
Q1 2015 Q1 2014
(000’s) change
Revenue 52,311 53,831 (2.8)
Cost of sales (63,368) (60,966) (3.9)
Gross loss (11,058) (7,135) (55.0)
General and administrative
expenses (2,633) (3,365) 21.8
Other income 304 399 (23.8)
Operating loss (13,387) (10,101) (32.5)
Net finance costs (4,862) (3,900) (27.1)
Income tax 1,459 1,185 23.2
Loss for the period (16,790) (12,816) (31.0)
Loss attributable to Atlatsa
shareholders (8,869) (4,877) (81.9)
Basic loss per share – cents (2) (1) (100.0)
Outlook
Mine management continues to focus on various initiatives to
improve operational efficiencies, disciplined capital
allocation and cost management, without comprising Bokoni
Mine’s existing ramp-up plan. Safety remains a focus area for
the mine as the safety of all employees and contractors across
operations as well as that of our community members, remains
of paramount importance to the Company.
Bokoni Mine back at full production
On May 11, 2015, operations at Bokoni Mine were interrupted by
unrest that erupted in the Bokoni Mine area when some members
of communities surrounding Bokoni blocked the main road
leading to the mine with burning tyres and rocks. The unrest
prevented employees from reporting to work which resulted in
three days of lost production. Stability was restored to the
area on May 14, 2015 and all employees have since returned to
work.
Stakeholder engagement is a key pillar of Atlatsa’s business
ethos. Atlatsa invests in the area through community-based
projects and continually encourages community members to
utilize existing legitimate structures to engage with the
mine.
Change of Sponsor on the JSE Limited
Shareholders are advised that One Capital Sponsor Services
Proprietary Limited has been appointed as Sponsor to the
Company on the JSE Limited, effective June 1, 2015.
Queries:
On behalf of Atlatsa
Prudence Lebina
Head of Investor Relations
Office: +27 11 779 6800
Email: PrudenceL@atlatsa.com
JSE Sponsor:
The Standard Bank of South Africa Limited
Natalie Di-Sante
Office: +27 11 721 6125
Russell and Associates
Pam McLeod
Office: +27 11 880 3924
Email: pam@rair.co.za
Cautionary note regarding forward-looking information
This document contains “forward-looking statements” within the
meaning of the U.S. Private Securities Litigation Reform Act
of 1995 and applicable Canadian securities laws that are based
on Atlatsa’s expectations, estimates and projections as of the
dates as of which those statements are made, including
statements relating to 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: open cast mining and
accelerated development of underground shaft systems at Bokoni
Mine will have anticipated positive impacts on operations and
production; Bokoni Mine will maintain production levels in
accordance with mine operating plan; Bokoni Mine operating
plan will continue to be implemented as expected and will
achieve improvements in production and operational
efficiencies as anticipated; the Company will be able to
satisfy the terms and conditions of its letter of support from
Anglo Platinum, dated November 10, 2014, as described in
Section 1.11 “Liquidity” in the MD&A and under “Going Concern”
in Note 2 of the Consolidated Financial Statements; the
Platreef Projects 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, strikes
or community unrest 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 Company’s ability to satisfy
the terms and conditions of its letter of support from
Anglo Platinum, dated November 10, 2014, as described in
Section 1.11 “Liquidity” in the MD&A and under “Going
Concern” in Note 2 of the Consolidated Financial
Statements;
- uncertainties related to achievement of the financial and
operational improvements expected as a result of the
Restructure Plan;
- uncertainties related to continued implementation of the
Bokoni Mine operating plan and opencast mining;
- uncertainties related to the timing of the implementation
of the Bokoni Mine deferred expansion plans;
- 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 continued availability of capital
and financing;
- uncertainties related to the ability to obtain necessary
licenses, permits, electricity, surface rights and title
for development projects;
- uncertainties related to the accuracy of our mineral
reserve and mineral resource estimates and our estimates
of future production and future cash and total costs of
production, and the geotechnical or hydrogeological nature
of ore deposits, and diminishing quantities or grades of
mineral reserves;
- uncertainties related to unexpected judicial or regulatory
proceedings;
- changes in, and the effects of, the laws, regulations and
government policies affecting our mining operations,
particularly laws, regulations and policies relating to:
o mine expansions, environmental protection and
associated compliance costs arising from exploration,
mine development, mine operations and mine closures;
o expected effective future tax rates in jurisdictions
in which our operations are located;
o the protection of the health and safety of mine
workers; and
o mineral rights ownership in countries where our
mineral deposits are located, including the effect of
the Mineral and Petroleum Resources Development Act
(South Africa);
- changes in general economic conditions, the financial
markets and in the demand and market price for gold,
copper and other minerals and commodities, such as diesel
fuel, coal, petroleum coke, steel, concrete, electricity
and other forms of energy, mining equipment, and
fluctuations in exchange rates, particularly with respect
to the value of the U.S. Dollar, Canadian Dollar and South
African Rand;
- unusual or unexpected formation, cave-ins, flooding,
pressures, and precious metals losses (and the risk of
inadequate insurance or inability to obtain insurance to
cover these risks);
- changes in accounting policies and methods we use to
report our financial condition, including uncertainties
associated with critical accounting assumptions and
estimates; environmental issues and liabilities associated
with mining including processing and stock piling ore;
- geopolitical uncertainty and political and economic
instability in countries which we operate;
- the effect of HIV/AIDS on labour force availability and
turnover; 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 on Form 20-F for the year ended
December 31, 2014 and other disclosure documents available at
www.sedar.com and with the United States Securities and
Exchange Commission, available at www.sec.gov.
Date: 15/05/2015 02:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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