Northam Platinum Holdings Limited · JSE:NPH
Northam Platinum — FY2007 Earnings Presentation
30 slides from Northam Platinum's earnings presentation, Aug 3, 2007
Slide 1: Northam Platinum
NORTHAM PLATINUM TED 3 August 2007 www.northam.co.za
Slide 2: Agenda
Agenda • Financial and operating results - Glyn Lewis, CEO • Geology - Damian Smith, Chief Geologist • Market review - Jerry White, Marketing Manager • Outlook - Glyn Lewis, CEO 2
Slide 3: Overview
Overview • Rand basket price received 57% up year-on-year • Record sales revenues of R3.7 billion • 88% increase in attributable earnings to R1.3bn • Costs increase, but operating margin healthy at 53.8% • Pt and Pd now being refined locally at Heraeus SA in Port Elizabeth 3
Slide 4: Market fundamentals boost performance
Market fundamentals boost performance • Buoyant PGM and nickel markets continue • Basket price of R297 292/kg ($1 288/oz) realised • Sales revenue reaches R3.7 billion (F2006: R2.4 billion) Rands 4,000,000 R 3,739,805 3,500,000 3,000,000 2,500,000 R 2,386,326 2,000,000 R 1,720,399 R 1,560,685 R 1,47
Slide 5: Operating performance
Operating performance • Anticipated decline in production of 10.3% to 10 087 kg (3PGE+Au) • Decline in average head grade from 5.5 g/t to 5.1 g/t • R/tonne milled operating cost increased by 12.6% PGM production Oz 3PGE+Au 400,000 361 599 350,000 332 888 340 547 325 214 324 296 300,000 271 931 250,0
Slide 6: Strong financial performance
Strong financial performance • 88% increase in after tax profits to R1.3 billion • 85% increase in headline earnings to 560 cents per share • Cash on hand of R1.2 billion • Final dividend of 280 cps (525 cps for the year) Cash balance R 000s 1,400 R 1,210 1,200 1,000 R 831 800 R 731 600 R 502 R 506
Slide 7: Northam Platinum
NORTHAM PLATINUM www.northam.co.za
Slide 8: Operating performance
Operating performance F2007 F2006 Change Total development metres 14 822 13 920 6.5% Merensky square metres 249 812 277 896 -10.1% Merensky head grade (g/t) 5.6 6.1 -8.2% UG2 square metres 146 698 138 170 6.2% UG2 head grade (g/t) 4.4 4.6 -2.2% Total square metres mined 396 510 416 066 -4.7% Total t
Slide 9: Merensky / UG2 production ratio
Merensky / UG2 production ratio Tonnes milled 1 800 000 1 600 000 1 400 000 1 200 000 1 000 000 800 000 600 000 400 000 200 000 0 F2003 F2004 F2005 F2006 F2007 Merensky UG2 9
Slide 10: Merensky facies
Merensky facies Reef type Normal NP2 P2 FWP2 Waste Current ratio 9% 30% 39 % 13 % 9% Historical ratio 10 % 18% 51 % 14 % 8% 100% 80% 60% 40% 20% 0% JAN '03 JAN '04 JAN '05 JAN '06 JAN '07 JUL JUL JUL JUL OCT OCT OCT OCT APR APR APR APR APR WASTE FWP2 P2 NP2 NR 10
Slide 11: Cost of sales
Cost of sales 2007 2006 Change (R000) (R000) Cost of sales 1 727 945 1 372 727 25.9% Operating costs 1 360 818 1 240 320 9.7% Concentrates purchased 106 447 - Refining and realisation 91 816 59 520 54.3% Depreciation 129 040 114 713 12.5% Change in metal stocks 39 824 (41 826) (195.2%) 11
Slide 12: Unit cash costs
Unit cash costs F2007 F2006 Change Rand / tonne mined 526.00 465.47 13.0% Rand / tonne milled 601.19 534.47 12.5% Rand /kilogram (3PGE Au) produced 135 248 109 441 23.6% 12
Slide 13: Refined metal sales
Refined metal sales F2007 F2007 F2006 F2006 Gold, 2% Gold, 2% Rhodium, 8% Rhodium, 7% Palladium, 28% Palladium, 30% Platinum, 62% Platinum, 61% 13
Slide 14: Sales revenue
Sales revenue F2007 F2006 Change (R000) (R000) Platinum 1 837 462 1 448 160 26.9% Palladium 238 849 186 513 28.1% Rhodium 1 074 565 476 140 125.7% Gold 30 826 25 242 21.2% Total (3PGE+Au) 3 181 702 2 136 055 49.0% Ruthenium 87 308 22 774 283.4% Iridium 25 221 11 252 124.1% Copper 36 851 27 818 32.5%
Slide 15: Revenue contributions
Revenue contributions 100% 5 5 7 9 8 10 11 13 12 8 5 80% 9 12 20 15 8 29 23 Other 30 8 60% Nickel 6 Gold Rhodium 40% Palladium 73 66 67 Platinum 57 61 49 49 20% 0% F2001 F2002 F2003 F2004 F2005 F2006 F2007 15
Slide 16: Income statement
Income statement F2007 F2006 Change (R000) (R000) Sales revenue 3 739 805 2 386 326 56.7% Cost of sales 1 727 945 1 372 727 25.9% Operating profit 2 011 860 1 013 599 98.5% Investment income 83 643 39 700 110.7% Net sundry income 5 303 19 820 -73.2% Profit before tax 774 562 367 555 110.7% Net profi
Slide 17: Capital expenditure
Capital expenditure Actual F2007 R million Access infrastructure to 1 & 14 levels 60.7 Development 30.1 Backfill reticulation 11.4 Underground equipment 8.3 Additional compressed air capacity 3.6 Metallurgical plants 8.3 Employee amenities 14.5 Routine 46.5 Total 183.4 17
Slide 18: Northam Platinum
NORTHAM PLAT me e.. T E D www.northam.co.za
Slide 19: Key points
Key points • Eastern transition zone – Merensky life-of-mine (LOM) loss • Deepening project progress – LOM gain • 20 line progress – continuing development but slow reserve build-up • NP2 reef – lower inherent grade and dilution from reef rolls impacting mill head grade (MHG) 19
Slide 20: Mine plan
Big John Dyke Mine plan dyke 15 line y s p la eastern ine transition 19 l zone l ona diag possible normal reef LJD 37 41 20 20
Slide 21: Geological section
Geological section Chromitite MERENSKY Cr NORMAL MERENSKY REEF Zone of Cr mineralisation 12m Transition zone NP2 MERENSKY REEF Cr 5m Transition zone P2 MERENSKY REEF Cr 2 to 4m FWP2 MERENSKY Merensky footwall rocks REEF UG2 UG2 Cr ±38m ±20m below below Normal P2 reef reef UG2 reef Cr Cr Cr 21
Slide 22: Mine plan
Big John Dyke Mine plan dyke 15 line y s p la eastern ine transition 19 l zone l ona diag possible normal reef LJD 37 41 20 22
Slide 23: NP2 reef and impact on grade
NP2 reef and impact on grade m 60c 5c m 23
Slide 24: www.northam.co.za
www.northam.co.za 24
Slide 25: Market review
Market review • Strong demand for Northam’s basket of metals has persisted • Pt - (49% of revenue) - continued growth in diesel autocats and industrial applications. Emerging role of ETFs - as yet modest, but lending support • Pd (6% of revenue) - decline in jewellery demand but gains in autocat and
Slide 26: Market outlook
Market outlook • Global environmental focus - to broaden and strengthen - bodes well for fundamental demand - albeit facing thrifting, substitution, alternative technologies • Pt - continuing robust demand; supply side risks – market deficit likely to continue. On-going PGI jewellery initiatives • P
Slide 27: Metal prices
Metal prices $ 6 475 6,500 1,500 $ 6 500 $ 5 800 6,000 $ 1 390 $ 1 350 5,500 1,300 $ 1 250 5,000 $/oz (Pt, Pd, Au) 1,100 4,500 $/oz (Rh) $ 1 053 4,000 $ 4 300 900 3,500 700 3,000 2,500 500 2,000 $ 382 $ 400 $ 350 1,500 300 $ 295 1,000 100 500 Apr 06 Apr 07 Jan 06 Jul 06 Oct 06 Jan 07 Jul 07 Oct 07 P
Slide 28: Refining
Refining • Heraeus SA refinery - Port Elizabeth – official opening February 2007 • Fine Metal Refinery, Heraeus brand metal, sponge and ingot capability • Application submitted to LPPA for London-Zurich Good Delivery status • To date, +/- 1000kg Pt, 500 kg Pd produced in Port Elizabeth • Facilitatio
Slide 29: Key issues going forward
Key issues going forward Operating issues • Safety • Difficult Merensky mining conditions • Development west of 20 line fissure • Eastern NP2 upper transition zone Production • F2008 PGM production is very difficult to predict Markets • Strong fundamental demand continues Growth • Remains an imperat
Slide 30: Northam Platinum
NORTHAM PLATINUM TED 3 August 2007 www.northam.co.za