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Atlatsa announces financial results for the quarter ended September 30, 2018
Atlatsa Resources Corporation
(Incorporated in British Columbia, Canada)
(Registration number 10022-2033)
TSX/JSE share code: ATL
ISIN: CA0494771029
(“Atlatsa” or the “Company”)
ATLATSA ANNOUNCES FINANCIAL RESULTS FOR QUARTER ENDED SEPTEMBER 30, 2018
November 14, 2018 Atlatsa Resources Corporation (“Atlatsa” or the “Company”) (TSX: ATL;
JSE: ATL) announces its operating and financial results for the quarter ended September 30,
2018. This release should be read together with the Company’s unaudited condensed
consolidated interim financial statements for the three and nine months ended September 30,
2018 (the “Consolidated Financial Statements”) and the related Management’s Discussion
and Analysis of Financial Condition and Results of Operations filed on http:///www.sedar.com,
which are also available at http://www.atlatsaresources.co.za/investors-and-media/financial-
results-mdas. Currency values are presented in South African Rand (ZAR) and Canadian
Dollars ($).
The 2017 Restructure Plan
On July 21, 2017, the Company announced that it had entered into an agreement
(“Agreement”) with Rustenburg Platinum Mines Limited (“RPM”), a subsidiary of Anglo
American Platinum Limited, outlining key terms agreed in relation to a two-phased restructure
plan (collectively, the “2017 Restructure Plan”), comprising:
• a care and maintenance strategy for Bokoni Mine; and
• a financial restructure plan for Atlatsa and its subsidiaries (“Atlatsa Group”).
The salient terms of the Agreement are as follows:
Bokoni Mine care and maintenance:
• Atlatsa was to place the Bokoni Mine on care and maintenance;
• RPM will fund all costs associated with the care and maintenance process (“Care and
Maintenance Funding”) from August 1, 2017 up until December 31, 2019 (“Care and
Maintenance Period”); and
• RPM will suspend the servicing and repayment of all the current and future debt owing
by Atlatsa Group to RPM until December 31, 2019 (“Debt Standstill”).
Financial restructure of the Atlatsa Group:
• RPM will acquire and include into its adjacent Northern Limb mining rights the
resources specified in Atlatsa’s Kwanda North and Central Block prospecting rights for
a cash consideration of $27.4 million (ZAR300 million) (“Asset Disposal”).
• Subject to implementation of the Asset Disposal, RPM will write off all debt owing by
Atlatsa Group to RPM, including debt incurred during the Care and Maintenance
Period (“Debt Write Off”).
• Atlatsa and RPM will retain their 51% and 49% respective shareholdings in the Bokoni
joint venture.
Implementation of the 2017 Restructure Plan
Bokoni Mine care and maintenance
The Bokoni Mine was placed on care and maintenance on October 1, 2017. The process
entailed the following:
• ceasing all production related activities;
• completion of a Section 189A retrenchment process at the Bokoni Mine; and
• appointment of a care and maintenance team to execute the care and maintenance
strategy at Bokoni Mine.
During the Care and Maintenance Period, Atlatsa and RPM will review various alternatives in
respect of Bokoni Mine’s future sustainability and, depending on future circumstances,
reconsider its care and maintenance status.
Care and Maintenance Funding
RPM has funded all once-off costs associated with placing Bokoni Mine on care and
maintenance, as well as ongoing care and maintenance costs up until December 31, 2019.
As a consequence, Atlatsa has restructured itself to reduce its corporate head office and
associated overhead costs (“Atlatsa Corporate Restructure”).
On October 12, 2017, the Atlatsa Group entered into a Care and Maintenance Term Loan
Facility Agreement with RPM (“Care and Maintenance Facility”) in terms of which RPM has,
subject to an agreed budget and approval process, made available to the Atlatsa Group a loan
facility in an amount of $47.6 million (ZAR521 million) for the duration of the Care and
Maintenance Period to enable the Atlatsa Group to fund its pro rata (51%) share of care and
maintenance costs at Bokoni Mine and the Atlatsa Corporate Restructure costs.
Transaction Cost Funding
On April 16, 2018, Atlatsa Group entered into a Transaction Cost Facility Agreement with RPM
(“Transaction Costs Facility”) in terms of which RPM has, subject to an agreed budget and
approval process, made available to the Atlatsa Group a loan facility in the amount of $4.6
million (ZAR50.3 million) for Atlatsa Group to fund transaction costs associated with the
implementation of the 2017 Restructure Plan. On June 25, 2018 an amendment to this facility
was signed increasing the budget and facility to $4.8 million (ZAR52.3 million).
Debt Standstill
RPM has agreed to suspend servicing and repayment of all current and future debt incurred
by the Atlatsa Group and owing to RPM and its related entities until December 31, 2019 (“Debt
Standstill Period”). Upon implementation of the Asset Disposal, all debt incurred during the
Debt Standstill Period will be written off, in accordance with the Debt Write Off.
The Atlatsa Group’s total liabilities as at September 30, 2018 amounted to $382.4 million
(ZAR4,182.4 million), including drawdowns on the Care and Maintenance Facility and
Transaction Costs Facility.
Debt Write Off conditional on Asset Disposal
Atlatsa does not have short-term plans to develop the resources at its Central Block and
Kwanda North prospecting rights. These prospecting rights border the north of RPM’s
Northern Limb operations. The incorporation of these prospecting rights into RPM’s operations
will increase the probability of their development, which could lead to potential future mining
and employment opportunities, contributing to the regional and national South African
economy.
As stated above, the Agreement provides for both the Asset Disposal and the Debt Write Off.
Implementation of such transactions remain subject to completion of definitive transaction
agreements, all required regulatory approvals and all required corporate approvals, including
the approval of Atlatsa shareholders.
Should the Asset Disposal be implemented, RPM will, inter alia, implement the Debt Write Off,
which will reduce the Atlatsa Group’s debt owing to RPM to zero.
Update on 2017 Restructure Plan
During 2018, RPM and Atlatsa continue to work towards the implementation of the 2017
Restructure Plan by fulfilling the terms and conditions as contemplated in the Agreement. RPM
and Atlatsa continue to progress the various workstreams required to be completed in terms
of the Agreement, whilst seeking the necessary regulatory approvals required for
implementation purposes. At this stage, RPM and Atlatsa anticipate that closing of the 2017
Restructure Plan will be completed during the first quarter of 2019.
Financial Results – Quarter ended September 30, 2018 (“Q3 2018”)
Set out below are summaries of key financial results for the Atlatsa Group Q3 2018 and Q3
2017.
Q3 2018 Q3 2017
$ million $ million
Revenue - 32.2
Cost of sales - (50.2)
Gross loss - (18.0)
General, administrative and other expenses (0.7) (3.3)
Impairment loss (9.6) (4.8)
Restructuring Costs - (33.3)
Care and maintenance costs (12.3) -
Operating loss (22.6) (59.4)
Net finance costs (16.5) (12.8)
Income tax - (0.1)
Loss for the period (39.1) (72.3)
Loss attributable to Atlatsa shareholders (25.6) (42.7)
Basic loss per share – cents (5) (8)
Headline loss per share – cents* (4) (7)
* Headline loss per share is not a recognised measure under IFRS and should not be construed as an alternative
to basic earnings or loss determined in accordance with IFRS as an indicator of the financial performance of Atlatsa.
It is an additional earnings number used as a way of dividing the IFRS reported profit between re-measurements
that are more closely aligned to the operating / trading activities of the entity, and the platform used to create those
results. The starting point is basic earnings excluding “separately identifiable re-measurements” (as defined in
Circular 2/2015 issued by the South African Institute of Chartered Accountants), net of related tax (both current
and deferred) and related non-controlling interest other than re-measurements specifically included in headline
earnings (“included re-measurements”, as defined).
Financial results
Care and maintenance costs for Q3 2018 were $12.3 million (ZAR122.5 million). Care and
maintenance costs include shafts and plant maintenance costs, pumping to prevent flooding
of working areas, safety inspections as well as general and administrative expenses
necessary to safeguard the Bokoni Mine assets.
Impairment of assets
Due to impairment indicators that existed as at September 30, 2018 and Bokoni Mine being
on care and maintenance, the Company assessed the carrying value of its assets for
impairment and recognised an impairment loss of $9.6 million with respect to plant and
equipment for Q3 2018.
Loss per share
The basic and diluted loss per share was $0.05 for Q3 2018 compared to $0.08 in Q3 2017.
The basic and diluted loss per share is based on the loss attributable to the shareholders of
the Company of $25.6 million compared to the loss attributable to the shareholders of the
Company of $42.7 million in Q3 2017.
Reconciliation of headline loss attributable to Atlatsa shareholders
Q3 2018 Q3 2017
$ million $ million
Loss attributable to Atlatsa shareholders (25.6) (42.7)
Adjustments:
Impairment loss 9.6 4.8
Loss on disposal of property, plant and - -
equipment
Total tax effects of adjustments - 0.1
Total non-controlling interest effects of (5.6) (2.3)
adjustments
Headline loss attributable to Atlatsa (21.6) (40.1)
shareholders
The basic and diluted headline loss per share was $0.04 for Q3 2018 compared to $0.07 in
Q3 2017. The basic and diluted headline loss per share based on the headline loss attributable
to the shareholders of the Company for Q3 2018 is $21.6 million, compared to a headline loss
attributable to the shareholders of $40.1 million for Q3 2017.
Issued share capital
As at September 30, 2018 Atlatsa had 554,421,806 issued and outstanding common shares.
Queries:
On behalf of Atlatsa
Joel Kesler
Chief Commercial Officer
Office: +27 10 286 1166
Email: Joel@atlatsa.com
Corporate Advisor and JSE Sponsor to Atlatsa:
One Capital
Cautionary note regarding forward-looking information
This document contains “forward-looking statements” within the meaning of the applicable
Canadian securities laws, that are based on Atlatsa’s 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 including without limitation, statements relating to
potential acquisitions and/or disposals, future production, reserve potential, exploration
drilling, exploitation activities and events or developments that Atlatsa expects such
statements appear in a number of different places in this document and can be identified by
words such as “anticipate”, “estimate”, “project”, “expect”, “intend”, “believe”, “plan”,
“forecasts”, “predicts”, “schedule”, “forecast”, “predict”, “will”, “could”, “may”, or their negatives
or other comparable words. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause Atlatsa’s actual results, performance or
achievements to be materially different from any future results, performance or achievements
that may be expressed or implied by such forward-looking statements.
Atlatsa believes that such forward-looking statements are based on material factors and
reasonable assumptions, including the following assumptions: placing the Bokoni Mine on
care and maintenance; safe guarding of all assets and the maintenance of major equipment;
implementing the terms of the Letter Agreement and Debt Standstill as contemplated in the
2017 Restructure Plan; and meeting the conditions precedent of the 2017 Restructure Plan.
Forward-looking statements, however, are not guarantees of future performance and actual
results or developments may differ materially from those projected in forward-looking
statements. Factors that could cause actual results to differ materially from those in forward
looking statements include: uncertainties related to placing the Bokoni Mine on care and
maintenance; uncertainties related to the implementation of the 2017 Restructure Plan;
uncertainties related to meeting the conditions precedent of the 2017 Restructure Plan;
changes in and the effect of government policies with respect to mining and natural resource
exploration and exploitation; continued availability of capital and financing; general economic,
market or business conditions; failure of plant, equipment or processes to maintain the Bokoni
Mine on care and maintenance; labour disputes, industrial unrest and strikes; political
instability; suspension of operations and damage to mining property as a result of community
unrest and safety incidents; insurrection or war; the effect of HIV/AIDS on labour force
availability and turnover; delays in obtaining government approvals; and the Company’s ability
to satisfy the terms and conditions of the loans and borrowings, as described under “Going
Concern” in Note 2 of the unaudited condensed consolidated interim financial statements for
quarter ended September 30, 2018. These factors and other risk factors that could cause
actual results to differ materially from those in forward-looking statements are described in
further detail under “Description of Business - Risk Factors” in Atlatsa’s Annual Information
Form for Fiscal 2017, which is available on SEDAR at www.sedar.com.
Atlatsa advises investors that these cautionary remarks expressly qualify in their entirety all
forward-looking statements attributable to Atlatsa or persons acting on its behalf. Atlatsa
assumes no obligation to update its forward-looking statements to reflect actual results,
changes in assumptions or changes in other factors affecting such statements, except as
required by law. Investors should carefully review the cautionary notes and risk factors
contained in this document and other documents that Atlatsa files from time to time with or
furnishes to; Canadian securities regulators and which are available on SEDAR at
www.sedar.com.
Date: 14/11/2018 01:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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