Wrap Text
Report for the six months ended 31 December 2015
Northam Platinum Limited
(Incorporated in the Republic of South Africa)
(Registration number 1977/003282/06)
Share code: NHM, ISIN: ZAE 000030912
("Northam" or "the group" or "company")
REVIEWED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2015
Reviewed Reviewed Audited
6 months 6 months 12 months
ending ending ending
31 December 31 December 30 June
2015 2014 2015
R'000 R'000 R'000
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Sales revenue 3 205 358 3 040 539 6 035 535
Cost of sales (3 111 953) (2 641 519) (5 439 722)
Operating costs (2 373 038) (2 081 641) (4 342 571)
Concentrates purchased (238 977) (265 783) (602 395)
Refining and other costs (69 954) (100 920) (199 470)
Depreciation and write-offs (203 146) (210 028) (339 949)
Change in metal inventories (226 838) 16 853 44 663
Operating profit 93 405 399 020 595 813
Share of (losses)/earnings from
associate and joint venture (11 615) 13 459 28 769
Investment revenue 163 564 18 335 72 043
Finance costs (459 672) (77 723) (245 937)
Sundry income 127 001 191 518 268 250
Sundry expenditure (77 805) (44 489) (1 587 264)
(Loss)/profit before tax (165 122) 500 120 (868 326)
Taxation (107 847) (143 808) (165 619)
(Loss)/profit for the period (272 969) 356 312 (1 033 945)
Other comprehensive income
Items that may be subsequently
reclassified to profit or loss – (2 168) (4 482)
Share of associate's exchange differences
on translating foreign operations and
foreign currency translation – (2 168) (4 482)
Total comprehensive income for
the period (272 969) 354 144 (1 038 427)
(Loss)/profit attributable to:
Owners of the parent (272 969) 354 608 (1 035 649)
Non-controlling interest – 1 704 1 704
(Loss)/profit for the period (272 969) 356 312 (1 033 945)
Total comprehensive income attributable to:
Owners of the parent (272 969) 352 440 (1 040 131)
Non-controlling interest – 1 704 1 704
Total comprehensive income for the period (272 969) 354 144 (1 038 427)
Reconciliation of headline(loss)/
earnings per share information
(Loss)/profit attributable to shareholders (272 969) 354 608 (1 035 649)
Loss/(profit) on sale of property, plant and equipment 1 523 (643) (892)
Profit on sale of associate's assets and investment – (7 105) (7 105)
Impairment of associate's assets – – 17 493
Negative goodwill on assets acquired by associate – – (26 804)
Foreign currency differences on repayment of long-
term receivables from associates' foreign operations
reclassified to profit or loss – – (922)
Impairment of property, plant and equipment – – 2 525
Impairment of non-core assets 39 951 8 644 261 488
Tax effect on above (426) (251) (5 097)
Headline (loss)/earnings (231 921) 355 253 (794 963)
(Loss)/earnings per share – cents (78.0) 89.2 (264.3)
Fully diluted (loss)/earnings per share – cents (78.0) 89.2 (264.3)
Headline (loss)/earnings per share – cents (66.3) 89.4 (202.9)
Fully diluted headline (loss)/earnings per share – cents (66.3) 89.4 (202.9)
Dividends per share – – –
Weighted average number of shares in issue 349 875 759 397 586 090 391 834 708
Fully diluted number of shares in issue 349 875 759 397 586 090 391 834 708
Number of shares in issue 509 781 212 397 586 090 509 781 212
Treasury shares in issue 159 905 453 – 159 905 453
Shares in issue adjusted for treasury shares 349 875 759 397 586 090 349 875 759
Reviewed Reviewed Audited
6 months 6 months 12 months
ending ending ending
31 December 31 December 30 June
2015 2014 2015
R'000 R'000 R'000
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Assets
Non-current assets 13 660 222 12 892 826 13 367 048
Property, plant and equipment 7 317 097 6 440 526 7 065 352
Mining properties and mineral resources 5 664 180 5 642 503 5 636 478
Interest in associates and joint ventures 231 138 495 275 275 847
Unlisted investment 6 6 6
Land and township development 18 400 9 522 10 000
Long-term receivables 92 557 91 692 94 503
Investments held by Northam Platinum
Restoration Trust Fund 89 990 47 397 49 092
Environmental Guarantee Investment 59 522 52 884 52 122
Buttonshope Conservancy Trust 11 018 10 859 11 037
Deferred tax asset 176 314 102 162 172 611
Current assets 4 153 965 1 915 014 5 784 288
Inventories 905 379 1 107 533 1 126 550
Trade and other receivables 341 416 557 609 498 854
Cash and cash equivalents 2 906 354 241 991 4 138 189
Tax receivables 816 7 881 20 695
Total assets 17 814 187 14 807 840 19 151 336
Equity and liabilities
Total equity 8 943 456 11 692 108 9 216 425
Stated capital 13 778 114 9 178 688 13 778 114
Treasury shares (6 556 123) – (6 556 123)
Retained earnings 866 839 2 530 928 1 139 808
Equity settled share based
payment reserve 874 448 – 874 448
Share of other comprehensive income
from associate (19 822) (17 508) (19 822)
Non-current liabilities 7 772 836 2 130 476 7 310 753
Deferred tax liability 543 398 528 529 521 452
Long-term provisions 215 920 148 747 187 217
Preference share liability 6 931 596 – 6 492 655
Long-term loans 38 063 41 867 39 963
Long-term share based payment liability 43 859 41 333 69 466
Domestic medium-term notes – 1 370 000 –
Current liabilities 1 097 895 985 256 2 624 158
Current portion of long-term loans 3 801 3 801 3 801
Short-term share based payment liability 20 049 45 607 61 019
Domestic medium-term notes – – 1 370 000
Bank overdraft – 6 207 –
Tax payable 117 497 110 488 102 072
Trade and other payables 817 886 691 010 959 996
Short-term provisions 138 662 128 143 127 270
Total equity and liabilities 17 814 187 14 807 840 19 151 336
Equity
settled Compre-
share based hensive Non-
Stated Retained payment income from controlling
capital earnings reserve associate interest Total
R'000 R'000 R'000 R'000 R'000 R'000
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Balance as at
30 June 2014 9 178 688 2 223 135 – (15 340) 5 389 11 391 872
Total comprehensive
income for the period – 354 608 – (2 168) 1 704 354 144
Profit for the period – 354 608 – – 1 704 356 312
Other comprehensive
income for the period – – – (2 168) – (2 168)
Dividends declared* – – – – (3 908) (3 908)
Acquisition of non-
controlling interest – (46 815) – – (3 185) (50 000)
Balance as at
31 December 2014 9 178 688 2 530 928 – (17 508) – 11 692 108
Issue of new shares 4 599 426 – – – – 4 599 426
Treasury shares (6 556 123) – – – – (6 556 123)
Share based payment
reserve – – 874 448 – – 874 448
Total comprehensive
income for the period – (1 391 120) – (2 314) – (1 393 434)
Loss for the period – (1 391 120) – – – (1 391 120)
Other comprehensive
income for the period – – – (2 314) – (2 314)
Balance as at
30 June 2015 7 221 991 1 139 808 874 448 (19 822) – 9 216 425
Total comprehensive
income for the period – (272 969) – – – (272 969)
Loss for the period – (272 969) – – – (272 969)
Other comprehensive
income for the period – – – – – –
Balance as at
31 December 2015 7 221 991 866 839 874 448 (19 822) – 8 943 456
* Non-controlling interest’s portion of dividends declared by entities within the group.
Reviewed Reviewed Audited
6 months 6 months 12 months
ending ending ending
31 December 31 December 30 June
2015 2014 2015
R'000 R'000 R'000
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
Cash flows from operating activities 684 374 55 451 340 950
(Loss)/profit before taxation (165 122) 500 120 (868 326)
Adjusted for the following non cash items
Depreciation and write offs 203 146 210 028 339 949
Change in provisions 6 195 15 226 52 823
Change in long-term receivables 1 946 2 355 (456)
Interest expense 29 258 77 723 145 170
Finance charges on the preference shares 430 414 – 100 767
Liquidity fees on the preference shares 8 527 – –
Equity settled share based payment expense – – 874 448
Movement in share based payment liability (66 577) (81 972) (38 350)
Impairment of investment in associates 39 951 – 239 054
Share of losses/(profits) from associate 11 615 (13 459) (28 769)
Other 2 822 9 867 920
Change in working capital 236 499 (529 972) (221 248)
Taxation paid (54 300) (134 465) (255 032)
Cash flows utilised in investing activities (515 051) (352 196) (1 101 462)
Property, plant, equipment, mining properties and
mineral reserves
Additions to maintain operations (184 746) (160 484) (322 980)
Additions to expand operations (299 760) (191 899) (779 068)
Disposal proceeds 391 2 451 1 551
Land and township development
Additions to maintain operations (9 978) (1 407) (1 088)
Disposal proceeds 1 578 2 089 885
Investment in associate – cash distributed – – 12 918
Additional investment made in associate (8 157) – (9 623)
Increase in investments held by Northam Platinum
Restoration Trust Fund (6 998) (929) (2 624)
Increase in investments held by Environmental
Guarantee investment (7 400) (1 860) (1 098)
Movement in investment held in Buttonshope
Conservancy Trust Fund 19 (157) (335)
Cash flows (utilised)/generated
from financing activities (1 401 158) (133 527) 4 232 645
Proceeds from issue of shares – – 4 600 000
Transaction costs – – (574)
Liquidity fees paid – – (163 903)
Acquisition of non-controlling interest – (50 000) (50 000)
Finance charges paid (29 258) (77 723) (145 170)
Dividends paid – (3 908) (3 908)
Decrease in long-term loans (1 900) (1 896) (3 800)
Domestic medium-term notes repaid (1 370 000) – –
(Decrease)/increase in cash and cash equivalents (1 231 835) (430 272) 3 472 133
Cash and cash equivalents at the beginning of the period 4 138 189 666 056 666 056
Cash and cash equivalents at the end of the period 2 906 354 235 784 4 138 189
Preparation
These reviewed interim results have been prepared under the supervision of the chief financial officer,
Mr AZ Khumalo CA (SA).
Auditor Review
The financial results of the group have been reviewed by Ernst & Young Inc., under the supervision of Mr M Herbst
CA (SA), a registered auditor. A copy of their unmodified reviewed report is available for inspection at Northam's
registered office.
Accounting policies - basis of preparation
The financial statements have been prepared on the historical cost basis, except for financial instruments
that are stated at fair value. The group interim financial statements have been prepared in accordance with
the framework concepts and the measurement and recognition requirements of the International Financial
Reporting Standards (IFRS), its interpretations issued by the IFRS Interpretations Committee, the SAICA
Financial Reporting Guides as issued by the Accounting Practices Committee, presentation and disclosures
as required by IAS 34 Interim Financial Reporting, the JSE Listings Requirements and the requirements of the
Companies Act No. 71 of 2008, and incorporates the accounting policies which are consistent with those
adopted in the financial year ended 30 June 2015.
There have been no amendments, standards or interpretations impacting the group which became effective
for the year beginning 1 July 2015.
Related parties
The group enters into various sales, purchase, financing and lease transactions in the ordinary course of
business with a large number of entities, some of which are related parties.
Going concern
Mining operations have a finite life and are also dependent amongst other things on geological, technical as
well as economic factors such as commodity prices and exchange rates. The global economic outlook and
low US dollar metal prices are a concern as Northam is an exporter of Platinum Group Metals (PGMs) to global markets. Operations
continue to be under pressure due to increasing input costs (mainly power and labour) and lower metal prices.
In the current cycle of low PGM US dollar metal prices, operations are under pressure to remain viable.
Management has undertaken initiatives to improve efficiency and to reduce costs as far as possible and
where necessary has engaged external experts to assist. Based on the said interventions, management is
of the opinion that the group remains a going concern despite the current difficult operating conditions.
Events after the reporting period
On 5 February 2016 shareholders were advised by way of a SENS announcement that Northam had entered into
a subscription agreement with the Industrial Development Corporation of South Africa Limited (IDC) in terms of
which the IDC has agreed to subscribe for new domestic medium-term notes amounting to R250.0 million at a rate
of the three month Jibar plus 390 basis points. Apart from this matter, there have been no other events subsequent
to the period end which require additional disclosure or adjustment to these interim financial results.
OPERATING, PRODUCTION AND FINANCIAL STATISTICS
6 months 6 months 12 months
ending ending ending
31 December 31 December 30 June
2015 2014 2015
R'000 R'000 R'000
NORMALISED EARNINGS
(Loss)/profit for the period per the statement of
comprehensive income (272 969) 356 312 (1 033 945)
Less: non-controlling interest – (1 704) (1 704)
(Loss)/profit attributable to the owners of the parent (272 969) 354 608 (1 035 649)
Add back: Corporate action transactional costs – – 172 640
Net lock-in fee – – 242 429
Impairment of non-core assets 39 951 – 261 488
IFRS 2 BEE share based payment charge – – 874 448
Preference share dividends accounted for as interest 430 414 – 100 767
Normalised earnings 197 396 354 608 616 123
Normalised earnings per issued share (cents) 38.7 89.2 120.9
Number of shares in issue including treasury shares 509 781 212 397 586 090 509 781 212
6 months 6 months 12 months
ending ending ending
31 December 31 December 30 June
2015 2014 2015
R'000 R'000 R'000
VALUE CREATED AND DISTRIBUTED
Value created and distributed to employees
Salaries and wages 747 652 687 916 1 441 799
Contributions to retirement benefit funds 63 040 57 765 114 565
Contributions to healthcare funds 32 806 32 587 66 074
Share based payment payouts 48 868 52 972 74 386
892 366 831 240 1 696 824
Value created and distributed to government
Mining and non-mining tax 89 604 123 464 135 762
Dividend withholding tax – – 12 447
Capital gains tax – – 74 592
Royalty taxes 23 017 44 949 39 986
Pay as you earn deducted from employees 157 976 140 854 277 861
270 597 309 267 540 648
Total value created and distributed 1 162 963 1 140 507 2 237 472
RESULTS COMMENTARY
FINANCIAL OVERVIEW – CONSOLIDATED GROUP
Revenue
Revenue generated from sales increased by 5.4% to R3.2 billion (H1 F2015: R3.0 billion), reflecting
the group's increasing sales volumes. Sales volumes were 19.3% higher, at 7 716kg or 248 075oz
(H1 F2015: 6 468kg; 207 951oz).
The lower basket price received of R415 196/kg (H1 F2015: R469 740/kg) reflects the significant decline in
the PGM US$ basket price realised which was offset to some extent by the 23.6% weakening of the ZAR
against the US dollar.
From 1 June 2015, concentrate production from Booysendal has been sold to Zondereinde at 88% of the
market related price. On a group basis, revenue is generated by Northam as all sales between Booysendal and
Zondereinde eliminate on consolidation. Previously, Booysendal sold its final product directly to customers.
Cost of sales and operating costs
The cost of sales increased by 17.8% to R3.1 billion (H1 F2015: R2.6 billion), in correlation with the
increase of 19.3% in volumes sold. Group operating costs increased by 14.0% to R2.4 billion (H1 F2015:
R2.1 billion). However, overall costs were well contained, with the rise in group unit cash costs increasing
only 0.3% to R340 274/kg (H1 F2015: R339 129/kg). The significant contributors to cost increases were
labour, electricity and general mining inflation. Included in the operating costs are smelting and base metal
removal plant costs which, when combined with refining costs, recorded a marginal increase compared to
H1 F2015. Royalty charges have decreased due to the lower profits earned in the current period compared
to H1 F2015. Also included in the change in metal inventories are metals on hand that were written down
by R186.5 million (H1 F2015: R63.3 million) to net realisable value as a result of depressed PGM prices
during the period under review.
Operating profit
As a result of the above, the group operating margin decreased from 13.1% to 2.9% which resulted in
the operating profit declining to R93.4 million (H1 F2015: R399.0 million). Zondereinde generated an
operating profit of R50.0 million (H1 F2015 R279.4 million) whilst Booysendal made an operating profit
of R43.3 million (H1 F2015: R119.4 million) with the balance relating to the operating profit made on the
sale of houses in Norplats Properties Proprietary Limited.
Share of losses from associates, interest and finance costs as well as sundry income
and expenditure
The share of losses from associates declined to a loss of R11.6 million (H1 F2015: profit of R13.5 million).
Northam's share of losses in the Pandora joint venture and in Trans Hex Group Limited amounted to
R7.2 million (H1 F2015: R5.1 million) and R4.4 million (H1 F2015 profit of R18.6 million) respectively.
Management continues to assess its options regarding Northam's holdings in both these investments.
Investment revenue rose to R163.6 million (H1 F2015 R18.3 million). This is associated with interest earned
on higher cash balances resulting from the BEE transaction concluded in May 2015, as well as interest
received on an insurance contingency policy.
Finance costs of R459.7 million (H1 F2015: R77.7 million) were incurred owing to the non-cash finance
charge resulting from the structuring of the BEE transaction in terms of which dividends associated with
the Zambezi Platinum (RF) Limited (Zampezi Platinum) preference shares are consolidated into the group financial statements of Northam.
The Zambezi Platinum preference shares accrue a cumulative variable dividend at the South African
prime interest rate plus 3.5% per annum. The accrued dividends are recognised as a finance charge. The
finance costs associated with the preference shares for the six month period under review amounted to
R430.4 million (H1 F2015: Rnil). The domestic medium-term debt notes (DMTN) of R1.4 billion were repaid
on 3 September 2015.
Sundry income of R127.0 million (H1 F2015: R191.5 million) includes a cash amount of R59.6 million received
on the cancellation of the insurance contingency policy as mentioned above. Accounted for in the comparable
H1 F2015, was an insurance refund of R150.0 million relating to the No. 1 shaft incident. Sundry income
was also impacted by the ZAR currency translation which increased from R7.8 million during H1 F2015 to
R28.8 million.
Sundry expenditure increased by 74.9% from R44.5 million to R77.8 million. Included in sundry expenditure
was the impairment of the investment in the Pandora joint venture of R34.7 million as well as an impairment
of the investment in Trans Hex Group Limited amounting to R5.3 million.
In addition, care and maintenance costs of R12.9 million were incurred at the Everest plant acquired
from Aquarius Platinum (South Africa) Proprietary Limited (AQPSA). Sundry expenditure also includes the
amortisation of liquidity fees payable on the BEE transaction concluded in the prior year (a liquidity fee of
2.5% was paid to the Public Investment Corporation SOC Limited and Coronation Asset Management
Proprietary Limited) on the full value of the preference shares. The liquidity fee, which was classified as
a transaction cost in terms of IAS 39 and included in the initial measurement of the financial liability, is
amortised over the 10 year lock-in period of the preference shares. The amortisation of R8.5 million is
included in sundry expenditure and relates to the said liquidity fee.
Taxation
Tax payable is lower than the comparable period owing to the lower profits achieved. Taxation consists of
non-mining tax of R81.7 million accrued mainly on interest earned. Deferred tax was raised on all temporary
differences resulting in a tax charge of R18.2 million.
Cash flow movements
Cash flow generated from operating activities rose to R684.4 million (H1 F2015: R55.5 million), largely as a
result of the movement in working capital. The working capital movement amounted to a positive inflow of
R236.5 million compared with the negative outflow of R530.0 million in the previous period. Contributing
to the positive movement in working capital was Value Added Tax of R187.7 million, (part of which
had been outstanding since April 2014), refunded by the South African Revenue Service during the period
under review. Metal debtors also declined by some R52.1 million due to the lower metal prices achieved
during the current period.
Cash flows utilised in investing activities were up 46.2% from R352.2 million to R515.1 million. The increase
relates primarily to the increase in expansionary capital on the following projects: R41.5 million spent on
employee accommodation both at Zondereinde and Booysendal; R37.3 million on the Merensky feasibility
project at Booysendal UG2 North mine; R65.2 million on the acquisition of the Everest mineral reserves and
costs relating to the development of Booysendal South mine; and R150.6 million on the completion of the
capital footprint at Booysendal UG2 North mine.
Cash flows utilised in financing expenditure increased significantly from R133.5 million in H1 F2015 to
R1.4 billion owing to the repayment of the DMTN during September 2015. Excluding the repayment of the
DMTN, the group generated net positive cash in-flows of R138.2 million for the six month period
ended 31 December 2015.
OPERATIONS
Zondereinde
Health and safety
Zondereinde recorded four million fatality-free shifts during the reporting period, a commendable performance
at any operation, and particularly at a deep-level mine like Zondereinde. The lost time injury rate was higher
at 1.67 injuries per 200 000 hours worked (30 June 2015: 1.31) and the reportable injury rate was 1.02
(30 June 2015: 0.94). Operational management is focused on reducing both the number and severity of
injuries through interventions involving employees, their representatives and operational structures.
Production
Merensky reef tonnes milled were 433 572 tonnes (H1 F2015: 431 714 tonnes) at a head grade of 5.8g/t,
whilst the UG2 reef contributed 619 044 tonnes (H1 F2015: 556 399 tonnes) at a head grade of 4.2g/t.
The combined head grade for the period was 4.9g/t (H1 F2015: 5.0g/t), illustrating the effect of the higher
UG2 contribution.
Production of equivalent refined metal increased by 15.4% to 4 823kg (H1 F2015: 4 179kg). The quantities
of purchased concentrates from third parties decreased slightly to 609kg (H1 F2015: 622kg).
Mining flexibility on the Merensky reef horizon remains constrained. Increased production from the UG2
horizon is expected to partially compensate for the Merensky constraints until the deepening section is
completed. The rebalancing of the Merensky/UG2 mining mix to a 40:60 ratio has resulted in the life of
Zondereinde increasing to 21 years.
Costs and capital expenditure
The total operating costs at Zondereinde for the period were R1.7 billion (H1 F2015: R1.5 billion) which
represents a 10.1% rise in costs. The rise in aggregate operating costs reflects primarily increased
production volumes which has resulted in lower unit cash costs of R342 288/kg (H1 F2015: R358 104/kg),
an improvement of 4.4%.
Management has adopted a cautious approach to capital expenditure in order to preserve cash resources. This
does not mean that essential and strategic development will not be done. The total capital expenditure for the
period was R161.9 million, comprising R33.2 million and R128.7 million for expansionary and sustaining capital
respectively. We anticipate spending a further R570.0 million for the remainder of the year.
Processing and refining
In line with our objective of adding smelter capacity and progressively reducing the group's operating
risk, work has started on the building of a new furnace. The total cost of the project is expected to be
R750.0 million and it is expected to be commissioned by December 2017.
This expansion work follows on the extension of Northam's strategic partnership with Heraeus
Deutschland GmbH & Co. KG (Heraeus) and Heraeus South Africa Proprietary Limited in terms of which
Heraeus has agreed to contribute EURO 20.0 million to the construction of the furnace. The agreement
also provides for the renewal of the current toll refining agreements and guarantees supply of material
to Heraeus.
Booysendal
Health and safety
The Booysendal mine recorded 2 million fatality free shifts on 17 September 2015.
The lost time injury rate (per 200 000 hours worked) improved to 0.52 (30 June 2015: 0.54) whilst the
reportable injury rate (per 200 000 hours worked) was marginally higher at 0.43 (30 June 2015: 0.41).
The mechanised mining method continues to be a significant safety differentiator.
Production
Production at Booysendal during the reporting period was affected by sporadic community protests during
the period.
A total of 985 727 tonnes were milled at a head grade of 2.7g/t compared to 929 262 tonnes at a head
grade of 2.6g/t during the comparable period.
Having been in ramp-up phase since July 2013, the Booysendal UG2 North achieved its steady-state run rate
of 160 000oz per annum within the reporting period.
The Merensky project at Booysendal North advanced satisfactorily with the development of the access
decline and the extraction of a bulk sample for metallurgical test work. This test work is expected to be
completed early in the second half of the financial year.
Costs and capital expenditure
The total operating costs at Booysendal for the period were R667.4 million (H1 F2015: R531.6 million).
This increase of 25.6% is attributed mainly to the higher production volumes and mining contract rates.
The rand per tonne milled for the period is in line with expectations at R661/t.
Total capital expenditure during this period has been R55.5 million and R266.6 million for sustaining and
expansionary capital respectively. Capital expenditure for the remainder of F2016 is likely to absorb a further
R205.6 million.
The unit cash cost of metal in concentrate at R291 772/kg (H1 F2015: R251 914/kg) is now a more
realistic reflection of the operating costs at Booysendal following the completion of the ramp-up to
steady state levels.
CORPORATE ACTION
R50.0 million was paid to AQPSA for the Everest mining right when the Section 11 consent was granted by
the Minister of Mineral Resources during the period.
In September 2015, Northam signed a heads of agreement with Heraeus, in terms of which Heraeus will
contribute Euro 20.0 million to the construction of a 20MW furnace at the Zondereinde smelter complex. This
amount will be payable in two equal tranches, the first in June 2016 and the other in June 2017. Northam
will pay a research and development fee of R9.2 million per annum for 20 years beginning in the current
financial year.
MINERAL RESOURCES AND RESERVES
The process of estimating the group's mineral resource and reserve is conducted on an annual basis. The
latest mineral resource and reserve estimation is included in the 2015 annual integrated report, which was
published in September 2015 and is available on the company's website.
CHANGES TO THE BOARD OF DIRECTORS
Mr R Havenstein took over from Mr AR Martin as lead independent director on 18 August 2015.
Mr BK Mosehla was appointed as a non-executive director on 19 August 2015.
Mr ME Beckett retired as a director on 11 November 2015.
Ms HH Hickey and Mr TI Mvusi's appointments as independent non-executive directors, effective
1 January 2016, were announced on 11 December 2015. Ms Hickey is also a member of the audit and
risk committee.
PROSPECTS*
The outlook for the PGM industry remains challenging with persistent weak metal prices and poor economic
fundamentals in developed economies. The group's financial performance will depend on achieving higher
metal prices and a stable operating performance. Despite the adverse market conditions, Northam's strong
balance sheet and prudent financial controls will enable the company to continue with strategic project
development which will position the company to benefit from improving market conditions in the future.
* Not audited or reviewed by the group's auditors.
DIVIDEND
Given the continuing difficult conditions in the mining industry, and the cash requirements for
the development of the group's assets, the board has resolved not to declare an interim dividend for
H1 F2016 (H1 F2015: Rnil cents per share).
On behalf of the board
PL Zim PA Dunne
Chairman Chief executive
Johannesburg
17 February 2016
Directors
PL Zim (non-executive chairman), R Havenstein (lead independent), PA Dunne (chief executive officer) (British), AZ Khumalo
(chief financial officer), CK Chabedi, HH Hickey, TE Kgosi, AR Martin, KB Mosehla and TI Mvusi
Registered office
Building 4, 1st Floor, Maxwell Office Park, Magwa Cresent West, Waterfall City, Juskei View, 2090, South Africa
PO Box 412694, Craighall, 2024, South Africa
Company secretary
Ms PB Beale
Transfer secretaries
Computershare Investor Services Proprietary Limited
70 Marshall Street, Johannesburg, 2001, South Africa
PO Box 61051, Marshalltown, 2107, South Africa
Sponsor
One Capital
17 Fricker Road, Illovo, 2196, South Africa
PO Box 784573, Sandton, 2146, South Africa
These results are disclosed in greater detail than has been disclosed in the past, including segmental analyses, breakdown of sales
and costs, amongst other metrics. These appear in the reviewed interim results booklet, which is available on the Northam website
at www.northam.co.za and at Northam's registered office.
Johannesburg
26 February 2016
Sponsor
One Capital
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