Significant improvements in year-on-year Q1 operating
performance
Year-on-year ZAR PGM unit costs decrease by 13% on
improved production and operational efficiencies
JOHANNESBURG,
May 14, 2013 /CNW/ - Atlatsa
Resources Corporation ("Atlatsa" or the "Company") (TSXV: ATL; NYSE
MKT: ATL; JSE: ATL) announces its operating and financial results
for the three months ended March 31,
2013. This release should be read together with the
Company's Financial Statements, Management Discussion &
Analysis filed on www.atlatsaresources.co.za and www.sedar.com.
Currency values are presented in South African Rand (ZAR), Canadian
Dollars ($) and United States Dollars (US$).
Chief Executive Officer, Harold Motaung, says, "The Company has achieved
significant improvements in its operating performance and increased
production volumes despite this being a traditionally challenging
quarter. Most importantly, the new management continues to
demonstrate a positive upward trend in operating performance, with
all key operating metrics showing significant year-on-year
improvements. With the Revised Restructure Plan near completion,
Bokoni is well-funded and well-positioned as an emerging, long-life
mid-tier PGM producer".
First quarter highlights:
- Production normalises after Q4 2012 unprotected strike action
at Bokoni.
- Significant improvements in operating performance, with tonnes
milled improving by 25% and PGM* ounces produced improving by 30%
in Q1 2013 compared with Q1 2012.
- Absolute costs in $ terms remain relatively flat year-on-year,
with Rand/ PGM ounce unit costs decreasing by 13% year-on-year as a
result of improved production volumes and efficiencies.
- Material improvement in year-on-year financial metrics, with
cash operating profit and EBITDA improving by 110% and 232%,
respectively.
*PGM means platinum group metals (4E),
comprising platinum, palladium, rhodium and gold.
- Revised restructure plan announced with Anglo American Platinum
Ltd, which will result in Company debt reduction of 75% and the
Bokoni group being fully financed on attractive terms through to
2020.
- Merensky open cast mining operations approved to commence in Q2
2013.
Operating and financial performance
Set out below are summaries of the key operating
and financial results for Bokoni Mine and the Company for the
period under review.
Operating results |
Q1 2013 |
Q1 2012 |
%
Change
|
Tonnes milled
|
T
|
302,964 |
243,054 |
24.6 |
Recovered grade |
g/t milled,4E |
3.83 |
3.58 |
7.0 |
4E oz produced |
Oz |
36,043 |
27,799 |
29.7 |
UG2 mined to total output |
% |
34.36 |
33.80 |
1.7 |
Primary development |
M |
1,956 |
2,547 |
(23.2) |
Capital expenditure |
$m |
12.0 |
6.9 |
74.0 |
Operating cost/tonne milled |
ZAR/t |
1,283 |
1,423 |
9.8 |
Operating cost/4E oz |
ZAR/4E oz |
10,786 |
12,442 |
13.3 |
Lost-time injury frequency rate ("LTIFR") |
Per 200,000 hours worked |
0.97 |
1.46 |
33.6 |
Total permanent labour
(mine operations) |
Number |
3,516 |
3,503 |
0.4 |
Total contractors
(mine operations) |
Number |
1,550 |
1,611 |
(3.8) |
Consolidated
statement of comprehensive income summary |
Expressed in Canadian Dollars
(000's) |
Q1 2013 |
Q1 2012 |
%
Change
|
Revenue |
45,081 |
34,079 |
32.3%
|
Cash Operating costs |
44,037 |
43,949 |
(0.2%)
|
Cash Operating profit/(loss) |
1,044 |
(9,870) |
110.6%
|
Operating margin |
2% |
(29%) |
106.9%
|
EBITDA |
17,976 |
(13,600) |
232.2%
|
Loss after tax |
(4,625) |
(41,267) |
88.8%
|
Non-controlling interest |
1,540 |
(19,729) |
107.8%
|
Loss attributable to Atlatsa
shareholders |
(6,165) |
(21,538) |
128.6%
|
Basic and diluted loss per share - cents
|
1 |
5 |
80.0% |
Safety
Atlatsa again reported a pleasing safety
performance for the quarter, celebrating a million fatality free
shifts. This is a tribute to management, employees, unions and the
active engagement with the South African Department of Mineral
Resources on safety matters. Atlatsa's LTIFR improved to 0.97
(33.6%) per 200,000 hours worked when compared to the Q1 2012 LTIFR
of 1.46.
Operational results
The new management team at Bokoni Mine continues
to demonstrate a positive trend in operating performance, with all
key operating metrics showing significant year-on-year
improvements.
During Q1 2013, the Bokoni Mine produced 36,043
PGM ounces as compared to 27,779 4E ounces during Q1 2012. Tonnes
delivered to the concentrator plant in Q1 2013 increased by 22.4%
when compared to Q1 2012, and tonnes milled increased by 24.6% over
the comparative period.
Primary development decreased by 23.2% in Q1
2013 when compared to Q1 2012. This was due to planned development
decreases being implemented, primarily related to the UG2 ramp up
operations, as a result of a deferral of the UG2 Delta 80 expansion
plans and adoption of a new operating plan at Bokoni through to
2020, as detailed in the Company's announcement on March 27, 2013.
A strong focus remains on continuously improving
recovered grade at the operations. New initiatives, which will
result in a change in the mining cut at the Merensky operations,
together with other quality mining practices, should begin to yield
positive results during Q2 2013.
Mining flexibility through creating sufficient
spare mining panels at the operations remains a key focus,
especially at the Merensky operations which experience a higher
incidence of geological potholing.
Open cast mining operations
During the quarter the Company approved a
project for the commencement of open cast mining operations in the
Merensky Reef at Bokoni Mine. It is anticipated that mining will
commence in Q2 2013. These operations should have a positive impact
on production volumes and further reduce unit costs at Bokoni going
forward.
Wage negotiations
Bokoni Mine management has initiated preliminary
engagements with its recognised unions regarding wage negotiations,
due to commence in June 2013. The
current two year wage agreement at Bokoni Mine terminates in
July 2013.
Financial results
Revenue sales were $45.1
million for Q1 2013 compared to $34.1
million for Q1 2012.
The ZAR PGM basket price achieved for Q1 2013
was 16.9% higher year-on-year at ZAR11,562, when compared to ZAR9,887 for Q1 2012, whilst the US$ PGM basket
price only improved by 1.4% year-on-year to $1,291, compared to US$1,273 in Q1 2012.
Despite increased production volumes, cash
operating costs for Q1 2013, measured in $ terms, remained
relatively flat year-on-year, increasing by $0.5 million to $44.4
million.
ZAR PGM ounce unit costs decreased by 13.3%
year-on-year from ZAR12,442 to
ZAR10,786, whilst US$ PGM ounce
unit costs decreased by 26.4% year on year from $1,622 to $1,194.
Absolute and unit cost cutting initiatives
remain a key focus at the operations, with further reductions in
unit costs anticipated from Q2 2013 onwards as a result of
continued efficiency improvements, together with the commencement
of the Merensky open cast mining operations.
Earnings
The Company recognised a fair value gain of
$20.6 million arising from the
implementation of phase one of the Revised Restructure Plan, which
took place on September 28, 2012.
This had a positive impact on the Company's earnings for the
period.
The Company achieved an operating profit of
$8.3 million for Q1 2013, when
compared to an operating loss of $23.4
million for Q1 2012, whilst cash operating profit and EBITDA
improved year-on-year by 110% and 232%, respectively.
The basic and diluted loss per share improved by
80% year-on-year from 5 cps to 1 cps.
Revised Restructure Plan
On March 27, 2013,
the Company announced that it had entered into a ZAR3.5 billion (US$380
million) Revised Restructure Plan with Anglo American
Platinum, which will have a material positive impact on the
Company's operational and financial outlook going forward.
The implementation of the Revised Restructure
Plan remains subject to the fulfilment or, where appropriate,
waiver of the following conditions precedent:
- Approval by the shareholders of both Atlatsa Resources and
Atlatsa Holdings;
- All of the agreements constituting the Revised Restructuring
Plan becoming unconditional;
- To the extent required, unconditional approval by the
Competition Authorities of South
Africa;
- To the extent required, unconditional approval by the South
African Reserve Bank; and
- Approval of the transaction by the relevant regulatory
authorities including the TSX Venture Exchange, JSE Limited,
NYSE-MKT, the South African Department of Mineral Resources and
ministerial approval of the transfer of mineral rights.
The Revised Restructure Plan is anticipated to
be completed by 30 September,
2013.
For additional information on the Revised
Restructure Plan refer to the news releases of Atlatsa dated
February 2, 2012, September 27, 2012 and March 27, 2013 as well as the material change
reports filed on February 13, 2012
and September 27, 2012 and
April 8, 2013, all of which are
available at www.sedar.com and the Company's website
www.atlatsaresources.co.za.
Accounting Policies and Going
Concern
The FY 2012 financial statements are prepared on
the basis of accounting policies applicable to a going concern.
This basis presumes that the Revised Restructure Plan described
above is successfully approved by Atlatsa shareholders before
30 June, 2013.
The audit report included in the Company's
Annual Report on Form 20-F ("20-F") contained an opinion from its
independent registered public accounting firm, KPMG Inc., which
included a "going concern" explanatory paragraph. The Company
discusses this matter in Note 2 to the annual financial statements
for the year ended December 31, 2012,
filed on March 28, 2013 on
www.sedar.com, the Company's website and in its 20-F. This press
release does not represent any change or amendment to the Company's
financial statements or its 20-F.
Note on conference call
Atlatsa will not be holding a conference call or
presentation to accompany these results. The Company will resume
detailed shareholder communications in due course.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release. The NYSE Amex has neither
approved nor disapproved the contents of this press release.
Cautionary and forward-looking
information
This document contains "forward-looking
statements" that were based on Atlatsa's expectations, estimates
and projections as of the dates as of which those statements were
made, including statements relating to the Bokoni Group restructure
and refinancing and 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: the Bokoni Mine
will increase or continue to achieve production levels similar to
previous years; the Ga-Phasha, Boikgantsho, Kwanda and Platreef
Projects exploration results 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 or strikes 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 completion of the Bokoni Group
restructure and refinancing;
- uncertainties and costs related to the Company's exploration
and development activities, such as those associated with
determining whether mineral resources or reserves exist on a
property;
- 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 the ability to obtain necessary
licenses, permits, electricity, surface rights and title for
development projects;
- operating and technical difficulties in connection with mining
development activities;
- 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:
-
- mine expansions, environmental protection and associated
compliance costs arising from exploration, mine development, mine
operations and mine closures;
- expected effective future tax rates in jurisdictions in which
our operations are located;
- the protection of the health and safety of mine workers;
and
- 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; 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 disclosed in the Form
20-F for the year ended December 31,
2012 filed at www.sedar.com and with the United States
Securities and Exchange Commission www.sec.gov and other disclosure
documents that are available at www.sedar.com.
SOURCE Atlatsa Resources Corporation