Northam Platinum Holdings Limited · JSE:NPH
Northam Platinum — FY2017 Earnings Presentation
32 slides from Northam Platinum's earnings presentation, September 2017
Slide 1: Results for the year ended 30 June 2017
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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: Key features
Key features Operational review Financial review Projects update Acquisitions update Business outlook Successful delivery Diversification Booysendal Solid performance Group unit costs in Tough market on strategy adds flexibility stand-out from Zondereinde the lowest quartile conditions persist and r
Slide 4: Key features
KEY FEATURES • Successful delivery on strategy • Diversification adds flexibility and reduces risk • Booysendal stand-out performance sustained • Solid performance from Zondereinde • Group unit costs in lower quartile of industry cost curve • Tough market conditions persist 4
Slide 5: Metal prices
METAL PRICES PGM prices from 1 January 2015 1 600 1 400 Pt 1 200 Basket US$/oz 1 000 Pd 800 600 400 01-Jan-15 01-Apr-15 01-Jul-15 01-Oct-15 01-Jan-16 01-Apr-16 01-Jul-16 01-Oct-16 01-Jan-17 01-Apr-17 01-Jul-17 Platinum (US$) Palladium (US$) Basket price (US$/oz) 5
Slide 6: Operational review
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Slide 7: Safety
SAFETY • Zondereinde • 6 million fatality free shifts (Nov 2016) • one fatality (Jan 2017) • LTIIR 1.65 • Booysendal • 3 million fatality free shifts (Jul 2017) • LTIIR 0.30 LTIIR per 200 000 hours worked 2.5 2 1.5 1 0.5 0 2016 2017 Zondereinde Booysendal 7
Slide 8: Operational statistics – Group
OPERATIONAL STATISTICS – GROUP F2017 F2016 Change % Total tonnage milled tonnes 4 450 111 4 186 028 6.3 Equivalent refined metal – own production oz 4E 474 007 436 960 8.5 Equivalent refined metal – purchased oz 4E 30 953 27 618 12.1 Total refined metal produced oz 4E 452 468 453 228 (0.2) Total ref
Slide 9: Operational statistics – Zondereinde
OPERATIONAL STATISTICS – ZONDEREINDE F2017 F2016 Change % Merensky milled tonnes 814 639 815 167 (0.1) Merensky head grade g/t 5.8 5.9 (1.7) UG2 milled tonnes 1 147 878 1 205 258 (4.8) UG2 head grade g/t 4.2 4.2 - Total milled tonnes 1 962 517 2 020 425 (2.9) Average combined head grade g/t 4.8 4.9
Slide 10: Operational statistics – Booysendal
OPERATIONAL STATISTICS – BOOYSENDAL F2017 F2016 Change % Merensky milled tonnes 161 134 92 645 73.9 Merensky head grade g/t 2.0 1.9 5.3 UG2 milled tonnes 2 326 460 2 072 958 12.2 UG2 head grade g/t 2.8 2.7 3.7 Total milled tonnes 2 487 594 2 165 603 14.9 Average combined head grade g/t 2.7 2.7 - PGM
Slide 11: Financial review
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Slide 12: Normalised headline earnings
NORMALISED HEADLINE EARNINGS F2017 F2016 R000 R000 Headline loss per the financial results (636 371) (492 837) Add back: Amortisation of liquidity fees paid on preference shares 16 390 18 088 Preference share dividends accounted for as interest 1 017 396 918 806 Loss on derecognition of preference s
Slide 13: Sales revenue and cost of sales
SALES REVENUE AND COST OF SALES F2017 F2016 Change R000 R000 % Sales revenue 6 865 185 6 097 070 12.6 Cost of sales (6 251 200) (5 713 722) (9.4) Operating costs (5 676 017) (5 007 233) (13.4) Concentrates purchased (404 093) (350 514) (15.3) Refining and other charges (120 633) (133 186) 9.4 Deprec
Slide 14: Segmental report – operating profit
SEGMENTAL REPORT – OPERATING PROFIT Eliminations Zondereinde Booysendal Total and other R000 R000 R000 R000 Sales revenue 6 395 036 2 574 442 (2 104 293) 6 865 185 Cost of sales (6 162 574) (2 137 031) 2 048 405 (6 251 200) Operating costs (3 717 601) (1 964 416) 6 000 (5 676 017) Concentrates purch
Slide 15: Cash flow
CASH FLOW • Operating cash flow increased 17% to R981.5 million • Investing cash flow up from R1 126.8 million to R1 990.8 million • Cash balance at year end R1 786.9 million (F2016: R3 105.1 million) F2017 cash flow statement 4 500 981.5 -250.1 4 000 -1 990.8 3 500 3 105.1 3 000 R million 2 500 2 0
Slide 16: Inventory breakdown (4E)
INVENTORY BREAKDOWN (4E) R000 700 000 600 000 55 867oz 500 000 400 000 37 264oz 28 705oz 300 000 23 377oz 200 000 8 928oz 100 000 4 581oz - Ore stockpiles Concentrate in Concentrate Smelter BMR inventory PMR inventory progress (pre-smelter) inventory 16
Slide 17: Projects update
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Slide 18: Zondereinde smelter expansion
ZONDEREINDE SMELTER EXPANSION • New furnace on schedule for December 2017 commissioning • Drying plant commissioned • Total capital expenditure to date is R671.6 million 18
Slide 19: Booysendal North
BOOYSENDAL NORTH • Merensky mine • Phase 1 mine established • producing at 25 000tpm • decline development and ore reserve establishment progressing • UG2 deepening project • two planned levels established • ore handling infrastructure (conveyors, transfer boxes) 65% complete • shaft bottom pumping
Slide 20: Booysendal South project
BOOYSENDAL SOUTH PROJECT • Central boxcut and pollution control dam nearing completion • Phase 1 development started on all seven adits • Civil works started for ore handling facilities – silo, ropecon • North access road final surfacing in progress • South access road on schedule • Capital spend to
Slide 21: Booysendal South
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Slide 22: Booysendal South
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Slide 23: Booysendal South
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Slide 24: Booysendal South
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Slide 25: Booysendal South tailings re-treatment project
BOOYSENDAL SOUTH TAILINGS RE-TREATMENT PROJECT • Project description • hydro-mining and reprocessing the Booysendal South tailings storage facility (TSF) • TSF contains 8.7Mt • planning to extract ~1.3Mt chrome concentrate • capital cost of R100 million • Project timeline • current • plant recommiss
Slide 26: Acquisitions update
ACQUISITIONS UPDATE www.northam.co.za
Slide 27: Tumela transaction
TUMELA TRANSACTION • Notification of approval for Section 102 mining licence amendment received • administrative process to execute documents in process • to be followed by establishment of access drives through Zondereinde western boundary • Additional ground adds 16.7Moz to Zondereinde resource ba
Slide 28: Eland transaction
ELAND TRANSACTION • Awaiting approval for transfer of mining right in terms of Section 11 of MPRDA • Business readiness planning on track • UG2 orebody with similar characteristics to Zondereinde • 1.6m grade channel • 4.4g/t over mining cut • 18° dip • 21.3Moz resource 28
Slide 29: Recycling asset
RECYCLING ASSET • Established suite of recycling equipment and premises • Located in Croydon, state of Pennsylvania • Transaction value USD10.7 million • Low-cost entry into key supply segment of PGM market • Scalable business in large recycling jurisdiction 29
Slide 30: Business outlook
BUSINESS OUTLOOK • Markets – supply is key • Operations – maintain competitive cost position • Labour relations – wage negotiations • Strategy – project execution • Mining Charter • Corporate activity 30
Slide 31: we y seo frie,
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Slide 32: 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 Leon van Schalkwyk Tel: +27 11 759