Key features for the 2016 financial
year:
- Operational and financial restructure plan completed at
Bokoni Platinum Mines (Proprietary) Limited ("Bokoni")
- Amendment to the term loan facility agreement entered
into with Anglo American Platinum Limited ("Anglo
Platinum")
- Renewed focus on development at remaining Bokoni ramp-up
shaft projects
- Bokoni JV parties assessing establishment of a UG2 Chrome
Tailings Recovery Plant
- Atlatsa's non-core project assets earmarked for disposal
to Anglo Platinum
- Discussions with stakeholders remain on-going surrounding
Anglo Platinum's exit from Bokoni JV
JOHANNESBURG, March 31, 2017 /CNW/ - Atlatsa Resources
Corporation ("Atlatsa" or the "Company") (TSX: ATL; JSE: ATL)
announces its operating and financial results for the quarter and
year ended December 31, 2016. This
release should be read together with the Company's audited
consolidated financial statements for the year ended December 31, 2016 (the "Consolidated Financial
Statements"), the related Management's Discussion and Analysis of
Financial Condition and Results of Operations (the "MD&A") and
the Annual Information Form filed on www.sedar.com, which are also
available at www.atlatsa.com. Currency values are presented in
South African Rand (ZAR), Canadian Dollars ($) and United States
Dollars (US$).
* PGM means
platinum group metals ("4E"), comprising platinum, palladium,
rhodium and gold.
|
|
Restructure Plan completed
In September 2015 Anglo Platinum
and Atlatsa decided to effect a significant restructure plan at
Bokoni ("Restructure Plan"). Completion of the Restructure Plan
resulted in:
- the older UM2 and Vertical Merensky shaft operations being
placed on care and maintenance;
- closure of the Merensky open pit operations;
- an increased focus on development at the two remaining ramp up
underground shafts at Middelpunt Hill UG2 and Brakfontein Merensky
operations respectively;
- a 30% reduction in the size of Bokoni's labour force; and
- an 18% reduction in Bokoni's cash operating cost base
(excluding capital expenditure).
New operational plan
Production
Post implementation of the Restructure Plan, Bokoni operates two
underground shafts, both of which remain in ramp-up phases toward
becoming steady state operations.
The Middelpunt Hill UG2 shaft is currently operating at 80% of
its targeted steady state volumes of 60 kilo tonnes per month
("ktpm") and it is estimated that it will achieve its steady state
by Q2 2018.
The Brakfontein Merensky shaft is currently operating at 50% of
its targeted steady state volumes of 90 ktpm and it is estimated
that it will achieve its steady state by Q2 2019.
Management is currently implementing a comprehensive development
plan to ensure sufficient stoping face length is made available to
achieve the planned production ramp up. This is being achieved by
improving waste handling infrastructure and upgrading trackless
mining equipment required for development. Management is in the
process of appointing a contract miner to develop critical ends to
ensure that development targets are met.
Resource extraction strategy
Bokoni holds one of the largest undeveloped PGM resources on the
Bushveld Complex. In addition to its existing ramp-up operations,
it has a number of brownfield opportunities to expand mining
operations.
The mine has well-established infrastructure and ore is
processed on site at the concentrator plant with an installed
design capacity of 160 ktpm.
The initial phase of the new operational plan at Bokoni is
targeting a steady state operation of approximately 145 ktpm
throughput being achieved by Q2 2019, with volumes being processed
through the existing concentrator plant.
Chrome Tailings Recovery Plant
In addition to PGM mineralisation, the UG2 Ore at Bokoni
contains between 25-30 % Cr2O3 (chromite)
minerals.
Bokoni is currently conducting a feasibility study to assess the
viability of extracting chrome from its UG2 tailings. Preliminary
studies indicate that approximately 10-15 ktpm of UG2 chrome
concentrate could be produced on a monthly basis at Bokoni.
New term loan facilities
A term loan facility agreement ("Term Loan") was originally
entered into between Anglo Platinum and Atlatsa1 on
December 9, 2015 and provided for a
ZAR 334 million ($32.7 million) facility to enable Atlatsa to
advance certain shareholder loans to fund its 51% share of
operational and capital expenditure cash calls at Bokoni.
Although the Term Loan does not bear interest, if any amount
which is due and payable is unpaid, such unpaid amount shall accrue
interest at the South African prime rate plus 2% from the due date
to the actual date of payment.
On August 15, 2016, an amendment
was entered into which increased the size of the facility by
ZAR 193 million ($18.9 million), available in two tranches, to
ZAR 527.0 million ($51.6 million).
On March 9, 2017, a second
amendment was entered into which increased the size of the facility
by an additional ZAR 214.2 million
($21.0 million), available in one
tranche, to ZAR 741.2 million
($72.6 million).
The term loan continues to bear no interest and the rate of
payment for overdue amounts remains unchanged.
Anglo Platinum remains committed to fund its 49% share of cash
calls at Bokoni.
Northern Limb Project Assets1
On implementation of the Term Loan, Atlatsa has agreed to
co-operate with Anglo Platinum in relation to, inter alia,
its intended acquisition of Atlatsa's non-core Northern Limb
project assets, comprising (i) the prospecting right held by Kwanda
Platinum Mines Proprietary Limited and (ii) the prospecting rights
in respect of Central Block mineral properties held by Atlatsa
(through its South African subsidiary, Plateau).
____________________________
|
1
Through their subsidiaries, Rustenburg Platinum Mines Ltd
("RPM") and Plateau Resources (Pty) Ltd ("Plateau")
respectively.
|
|
Discussions with Anglo Platinum
Post implementation of the Restructure Plan and pursuant to
implementation of the new operational plan at Bokoni, discussions
continue between Anglo Platinum, Atlatsa and relevant stakeholders
surrounding an appropriate exit for Anglo Platinum from the Bokoni
JV.
These discussions recognise that execution of the new
operational plan is critical to ensure the future sustainability of
the Bokoni operations, having regard to any potential future
corporate activity surrounding Bokoni going forward.
Bokoni operating and financial performance –
fiscal year ("FY") 2016
Set out below are summaries of the key operating and financial
results for Bokoni for the quarter and year ended December 31, 2016.
Operating
results
|
FY
2016
|
FY
2015
|
%
change
|
Q4
2016
|
Q4
2015
|
%
change
|
Tonnes
delivered
|
t
|
1,294,503
|
1,681,656
|
(23.0%)
|
278,996
|
396,756
|
(29.7%)
|
Tonnes
milled
|
t
|
1,317,668
|
1,676,694
|
(21.4%)
|
290,247
|
430,285
|
(32.5%)
|
Recovered
grade
|
g/t milled,
PGM
|
3.8
|
3.5
|
8.6%
|
3.9
|
3.4
|
14.7%
|
PGM oz
produced
|
oz
|
159,241
|
190,740
|
(16.5%)
|
36,471
|
46,698
|
(21.9%)
|
Primary
development
|
metres
|
5,686
|
7,778
|
(26.9%)
|
1,710
|
1,359
|
25.8%
|
Capital
expenditure
|
$m
|
25.2
|
25.7
|
(1.9%)
|
8.3
|
9.2
|
9.8%
|
Operating
cost/tonne milled
|
ZAR/t
|
1,488
|
1,323
|
(12.5%)
|
1,449
|
1,288
|
(12.5%)
|
Operating
cost/PGM oz
|
ZAR/PGM oz
|
12,311
|
11,630
|
(5.9%)
|
11,839
|
11,866
|
0.2%
|
Lost-time injury
frequency rate
("LTIFR")
|
Per 200,000
hours worked
|
1.05
|
1.10
|
4.5%
|
0.92
|
0.93
|
1.1%
|
Financial results
– Bokoni
|
Expressed in Canadian
Dollars (000's)
|
FY
2016
|
FY
2015
|
%
change
|
Q4
2016
|
Q4
2015
|
%
change
|
Revenue
|
162,699
|
205,691
|
(20.9%)
|
37,531
|
44,511
|
(15.7%)
|
Cash operating
costs
|
(178,289)
|
(222,559)
|
19.9%
|
(50,426)
|
(54,128)
|
6.8%
|
Cash operating
loss
|
(15,590)
|
(16,868)
|
7.6%
|
(12,895)
|
(9,617)
|
(34.1%)
|
Cash operating margin
(%)
|
(9.6)
|
(8.2)
|
(17.1%)
|
(8.2)
|
(21.6)
|
62.0%
|
Earnings before
interest, taxation,
depreciation and amortisation
("EBITDA")*
|
(15,114)
|
(390,248)
|
96.1%
|
(6,683)
|
4,471
|
(249.5%)
|
Loss for the
period
|
(66,281)
|
(368,982)
|
82.0%
|
(31,399)
|
(17,705)
|
(77.3%)
|
Loss attributable to
Atlatsa
shareholders
|
(46,469)
|
(167,069)
|
72.2%
|
(21,564)
|
(9,195)
|
(134.5%)
|
Basic and diluted
loss per share –
cents
|
(8)
|
(30)
|
73.3%
|
(4)
|
(2)
|
(100.0%)
|
|
* EBITDA means
earnings before net finance costs, income tax, depreciation and
amortisation. EBITDA is not a recognised 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's LTIFR was 1.05 per 200,000 hours worked compared to
1.10 in 2015, representing an improvement of 4.5%. Nine Section 54
safety stoppages were imposed by the South African Department of
Mineral Resources at the operations, resulting in a loss of 2,773
platinum ounces compared to 19 stoppages in 2015 which resulted in
3,280 platinum ounces lost.
During FY 2016 three fatalities occurred at Bokoni compared to
one fatality in FY 2015.
The safety and health of our employees continues to be a major
focus at our operations as we remain committed to the principle of
zero harm at Bokoni.
Operational results
As a result of two shafts being placed on care and maintenance
during FY 2016, the tonnes milled at Bokoni decreased by 21.4% to
1,317,668 tonnes and the PGM ounces produced decreased to 159,241
4E PGM ounces compared to 190,740 4E PGM ounces produced during FY
2015.
Primary development decreased by 26.9% year-on-year to 5,686
metres due to the impact of the restructuring. Implementation of
the Restructure Plan resulted in a backlog in development during FY
2016 relative to the intended mine development plan. This backlog
is being addressed as part of the new operational plan being
implemented in 2017.
Recoveries at the concentrator plant increased by 0.9% to 89.5%
and 1.0% to 86.7% for the Merensky and UG2 concentrate,
respectively, as a result of an increase in throughput and
processing of lower grade ore from the opencast operation.
Financial results
Revenue decreased by 20.9% year-on-year to $162.7 million as a result of a decrease of 16.5%
in PGM ounces produced and a 6.4% decrease in the average US$
platinum price per ounce from US$1,054 in FY 2015 to US$987 in FY 2016, partially offset by a 5.4%
increase in the ZAR PGM basket price (ZAR
11,306 in FY 2016 compared to ZAR
10,730 in FY 2015).
Total cash operating costs were 19.9% lower than in FY 2015
reflecting the decrease in tonnes milled.
Cost per tonne milled for FY 2016 remained relatively flat at
$134 (ZAR
1,488) compared to $133
(ZAR 1,323) in FY 2015 with costs per
4E ounce decreasing to $1,113
(ZAR 12,311) compared to $1,169 (ZAR 11,630)
in FY 2015.
Total capital expenditure for the year ended December 31, 2016 was $25.2 million, compared to $25.7 million for 2015, comprising 38% sustaining
capital and 62% project expansion capital associated with the two
ramp-up shaft operations.
Financial results
– Atlatsa
|
Expressed in Canadian
Dollars (000's)
|
FY
2016
|
FY
2015
|
%
change
|
Q4
2016
|
Q4
2015
|
%
change
|
Revenue
|
162,699
|
205,691
|
(20.9%)
|
37,531
|
44,511
|
(15.7%)
|
Cost of
sales
|
(200,490)
|
(260,574)
|
23.1%
|
(56,233)
|
(66,093)
|
14.9%
|
Gross loss
|
(37,791)
|
(54,883)
|
31.1%
|
(18,702)
|
(21,583)
|
13.3%
|
General,
administrative and other
expenses
|
(7,601)
|
(9,359)
|
18.8%
|
(2,128)
|
(1,474)
|
(44.4%)
|
Restructuring
costs
|
6,656
|
(14,926)
|
144.6%
|
472
|
7.0
|
nm
|
Impairment
loss
|
-
|
(337,064)
|
100.0%
|
-
|
-
|
nm
|
Operating (loss) /
profit
|
(38,736)
|
(416,233)
|
90.7%
|
(20,358)
|
(16,044)
|
(26.9%)
|
Net finance
costs
|
(28,404)
|
(23,645)
|
(20.1%)
|
(6,690)
|
(6,640)
|
(0.8%)
|
Income tax
|
859
|
70,896
|
(98.8%)
|
(4,351)
|
4,979
|
(187.4%)
|
(Loss) / profit for
the period
|
(66,281)
|
(368,982)
|
82.0%
|
(31,399)
|
(17,705)
|
(77.3%)
|
(Loss) / profit
attributable to Atlatsa
shareholders
|
(46,469)
|
(167,069)
|
72.2%
|
(21,564)
|
(9,195)
|
(134.5%)
|
Basic (loss) / profit
per share –
cents
|
(8)
|
(30)
|
73.3%
|
(4)
|
(2)
|
(100.0%)
|
Headline loss per
share – cents*
|
(8)
|
(9)
|
11.1%
|
(4)
|
(2)
|
(100.0%)
|
|
* 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). Please refer to
the Consolidated Financial Statements for a detailed reconciliation
between the headline loss per share and the earnings used in the
calculation.
|
|
nm: not
meaningful
|
|
Earnings
The basic and diluted loss per share was ($0.08) for FY 2016 compared to ($0.30) in FY 2015. The basic and diluted loss
per share is based on the loss attributable to the shareholders of
the Company of $46.5 million compared
to the loss attributable to the shareholders of the Company of
$167.1 million in FY 2015.
Issued share capital
As at December 31, 2016 Atlatsa
had 554,288,472 issued and outstanding common shares.
Queries:
On behalf of
Atlatsa
Joel
Kesler
Chief Commercial Officer
Office: +27 11 779 6800
Email: Joel@atlatsa.com
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 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 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: maintaining production levels at Bokoni in
accordance with mine operating plan; anticipated financial and
operational improvements expected as a result of the Restructure
Plan; the Company's ability to refinance its debts as and when due;
the provision of goods and/or services by contracted parties on the
agreed timeframes; availability of equipment available as
scheduled; absence of material labour slowdowns, strikes or
community unrest; proper functioning of plant and equipment
functions; absence of mine plan changes resulting from a change in
geological or financial parameters; and absence of geological or
technical problems.
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 the achievement of the anticipated financial and operational
improvements expected as a result of the Restructure Plan;
uncertainties related to the continued implementation of the Bokoni
operating plan; uncertainties related to the termination and
rehabilitation of the Klipfontein Merensky Opencast Mine operation;
uncertainties related to the timing of the implementation of the
Bokoni deferred expansion plans which includes the accelerated
development of the Brakfontein and Middelpunt Hill shafts;
fluctuations in market prices, levels of exploitation and
exploration successes; 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 operate as anticipated; accidents, 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,
MD&A – Section 2 – "Liquidity", a copy of which can be found on
SEDAR at www.sedar.com and under "Going Concern" in note 2 of the
Consolidated Financial Statements. 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 Item "Risk Factors" in Atlatsa's Annual Information Form for
Fiscal 2016, 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.
SOURCE Atlatsa Resources Corporation