Northam Platinum Holdings Limited · JSE:NPH
Northam Platinum — FY2016 Earnings Presentation
25 slides from Northam Platinum's earnings presentation, September 2016
Slide 1: Results for the year ended 30 June 2016
RESULTS FOR THE YEAR ENDED 30 JUNE 2016
Slide 2: Disclaimer
DISCLAIMER Certain statements in this presentation (other than the statements of historical fact) may contain forward-looking statements regarding Northam’s operations, economic performance or financial condition, including, without limitation, those concerning the economic outlook for the platinum
Slide 3: Agenda
AGENDA • Key features of 2016 • Operational review • Financial review • Project update • Business outlook 3
Slide 4: Key features
KEY FEATURES • Difficult market conditions • Commendable safety performance • Good operating performance from Zondereinde • Booysendal ramp up completed • Booysendal expansion projects approved • Corporate activity 4
Slide 5: PGM prices (from July 2014)
PGM PRICES (FROM 1 JULY 2014) 1 600 Pt 1 400 Basket 1 200 1 000 US$/oz Pd 800 600 400 Platinum (US$) Palladium (US$) Basket Price (US$/oz) 5
Slide 6: Operational review
NORTHAM OPERATIONAL REVIEW 6 Www. northam.co.za
Slide 7: Safety
SAFETY • Zondereinde – 5 million fatality free shifts – LTIIR 1.92 • Booysendal – 2 million fatality free shifts – LTIIR 0.44 2.5 2 1.5 1 0.5 0 2012 2013 2014 2015 2016 Zondereinde Booysendal 7
Slide 8: Consolidated operations
CONSOLIDATED OPERATIONS F2016 F2015 Change % Total tonnes milled 4 186 028 3 646 759 14.8 Chrome concentrate produced tonnes 538 405 371 051 45.1 Equivalent refined metal – own production oz 3PGE+Au 436 960 377 770 15.7 Equivalent refined metal – purchased oz 3PGE+Au 27 618 47 390 (41.7) Total refin
Slide 9: Zondereinde operations
ZONDEREINDE OPERATIONS F2016 F2015 Change % Merensky tonnes milled 815 167 795 884 2.4 Merensky head grade g/t 5.9 5.7 3.5 UG2 tonnes milled 1 205 258 1 064 499 13.2 UG2 head grade g/t 4.2 4.3 (2.3) Total tonnes milled 2 020 425 1 860 383 8.6 Average combined head grade g/t 4.9 4.9 - Equivalent refi
Slide 10: Zondereinde Merensky / UG2 ratio
ZONDEREINDE MERENSKY / UG2 RATIO 100% 7.0 90% 6.5 80% 6.0 Percentage contribution UG2 59% 70% 5.5 Mill head grade (g/t) 60% 5.0 50% 4.5 40% 4.0 30% MR 41% 3.5 20% 3.0 10% 2.5 0% 2.0 F2000 F2001 F2002 F2003 F2004 F2005 F2006 F2007 F2008 F2009 F2010 F2011 F2012 F2013 F2014 F2015 F2016 UG2 hoisted Mere
Slide 11: Zondereinde deepening
ZONDEREINDE DEEPENING • Development of decline progressing well between 16 and 17 level • Lateral development on 16 level progressing – crosscuts to reef started • Development of material decline between 14 and 16 levels complete. Equipping started 11
Slide 12: Booysendal operations
BOOYSENDAL OPERATIONS F2016 F2015 Change % Merensky tonnes milled 92 645 - 100.0 Merensky head grade g/t 1.9 - 100.0 UG2 tonnes milled 2 072 958 1 786 375 16.0 UG2 head grade g/t 2.7 2.6 3.8 Total tonnes milled 2 165 603 1 786 375 21.2 Average combined head grade g/t 2.7 2.6 3.8 PGMs in concentrate
Slide 13: Financial review
NORTHAM FANANCIAL REVIEW 43. WWw. northam.co.za
Slide 14: Normalised headline earnings
NORMALISED HEADLINE EARNINGS F2016 F2015 Change R’000 R’000 % Headline loss per the financial results (492 837) (794 963) (38.0) Add back: net lock-in fee - 242 429 (100.0) IFRS 2 Black Economic Empowerment share based payment charge - 874 448 (100.0) Amortisation of liquidity fees paid on preferenc
Slide 15: Sales revenue and cost of sales
SALES REVENUE AND COST OF SALES F2016 F2015 Change R’000 R’000 % Sales revenue 6 097 070 6 035 535 1.0 Cost of sales (5 713 722) (5 439 722) 5.0 Operating costs (5 007 233) (4 342 571) 15.3 Concentrates purchased (350 514) (602 395) (41.8) Refining and other costs (133 186) (199 470) (33.2) Deprecia
Slide 16: Segmental report – operating profit
SEGMENTAL REPORT – OPERATING PROFIT Eliminations Zondereinde Booysendal Total and other R’000 R’000 R’000 R’000 Sales revenue 5 966 217 1 972 883 (1 842 030) 6 097 070 Cost of sales (5 718 092) (1 796 904) 1 801 274 (5 713 722) Operating costs (3 464 378) (1 541 040) (1 815) (5 007 233) Concentrates
Slide 17: Cash flow
CASH FLOW • Operating cash flow increases from R340.9 million to R839.1 million • DMTN capital of R1 370.0 million repaid and new notes issued to the value of R425.0 million • Investing cash flow up 6.0% from R1 101.5 million to R1 168.1 million • Cash balance at year end R3 105.1 million (F2015: R4
Slide 18: Update growth projects
nonran UPDATE GROWTH PROJECTS 48 WWw. northam.co.za
Slide 19: Booysendal Merensky Phase 1 project
BOOYSENDAL MERENSKY PHASE 1 PROJECT Resource 1.8 Moz 4E Reserve 1.4 Moz 4E Commenced February 2015 Tonnes mined 135 000t Concentrator recovery >85% Phase 1 operation 2 mining crews 1 stoping crew 1 development crew 25 000oz/annum 4E Capex R300m over 2 years Allows modular production growth Swing pro
Slide 20: Booysendal UG2 North deepening project
BOOYSENDAL UG2 NORTH DEEPENING PROJECT Adds two additional levels to North UG2 mine • improves utilisation of underground On-reef dip conveyor and strike belt infrastructure infrastructure and concentrator • no additional fixed costs • 30 000oz/annum 4E additional production Includes underground sil
Slide 21: Booysendal South project
BOOYSENDAL SOUTH PROJECT Resource 13.6 Moz 4E Reserve 7.3 Moz 4E 240 000oz 4E/annum production section • two UG2 bord and pillar mining modules accessed via a single portal system • Merensky small mine (swing production) • shaft head infrastructure to support this • steady state by F2022 Capex R4.2
Slide 22: Zondereinde smelter expansion
ZONDEREINDE SMELTER EXPANSION Construction started in February 2016 Furnace base walls complete and erection of furnace shell in progress Dryer foundations complete Capex spent to date R 292 million Commissioning on track for H2 2017 €10 million received from Heraeus 22
Slide 23: Group reserves
GROUP RESERVES F2016: 24.5 Moz F2015: 19.1 Moz Booysendal North mine • UG2 pillar layout optimised • Merensky mining module Booysendal South mine • completion of feasibility study and funding allocation for BS1, BS2, BS4 and Merensky mining module Zondereinde • reduced expected pothole losses on UG2
Slide 24: Business outlook
BUSINESS OUTLOOK • Markets – supply is key • Operations – maintain competitive cost position • Strategy – project execution • Mining Charter – expected in second half of 2016 • Corporate activity 24
Slide 25: Contact details and shareholder information
Contact details Shareholder information Building 4, 1st Floor Name Northam Platinum Limited Maxwell Office Park Share code NHM Magwa Crescent West Waterfall City ISIN code ZAE 000030912 Jukskei View 2090 JSE sector Platinum South Africa Shares in issue 509 781 212 Rene Rautenbach Tel: +27 11 759 600