TIDMPPN
RNS Number : 0299E
Platmin Limited
31 March 2011
For immediate release
BUILD-UP CONTINUES - DISPATCHED METAL MORE THAN DOUBLES IN 2010;
CONSOLIDATION BEGINS;
US$135M DEBENTURES CONVERTED; COMMERCIAL PRODUCTION
DECLARED:
NOT FOR DISSEMINATION IN THE UNITED STATES OR OVER UNITED STATES
NEWSWIRE SERVICES
March 31, 2011: TORONTO: Platmin Limited ("Platmin" or "the
Company"; TSX/AIM: PPN; JSE: PLN) today announced production
results from its Pilanesberg Platinum Mine ("PPM") and financial
results for the twelve months ended December 31, 2010. This release
should be read in conjunction with the Company's Financial
Statements, Management Discussion & Analysis and Annual
Information Form, available at www.platmin.com and filed on
www.sedar.com. Platmin changed its financial year end from the last
day of February in each calendar year to the last day of December,
effective for the ten months ended December 31, 2009.
The principal focus of the Company's activities during 2010 was
the operation and development of PPM, with mining and processing
activities building up towards a 4E (3 PGM + Au) metal sales target
of the 20 000 oz per month as forecast in the bankable feasibility
study completed in 2007. Good progress with laying the foundation
for sustainable higher future metal output was made during the
year. A total of 20 961 4E ounces were dispatched and sold for the
quarter ended December 31, 2010. This is equivalent to annual
production of some 84 000 4E ounces. The 60 067 oz dispatched for
FY2010 were more than twice the 27 865 oz dispatched for
FY2009.
Operational high-lights for FY2010 of particular significance
for future production were:- a full upgrade of the geological
model, incorporating up-to-date geological information and
facilitating improvements to detailed planning; debottlenecking the
run-of-mine feed arrangements via the installation of three
vibrating feeders; improvements to metallurgical recoveries from
the high-grade UG2 reef, from 40% to 65%, and lesser improvements
in the Merensky plant; concerted and determined action by both the
CEO and MD of MCC, our mining contractor, to procure higher run
times from their fleet, and improved operating and maintenance
procedures in the concentrator.
Commenting on operations, Tom Dale, Platmin CEO, said "This is a
big ship. We move 4 million tonnes of rock per month. We want to
move 5 million tonnes per month, in the short term, to expose the
reef necessary to create operating flexibility. We now have an
experienced, motivated crew in place and the ship is turning. The
progress made during 2010 will support consistent improvements to
metal output in 2011 and 2012. Hence, I expect us to reach monthly
operating break even (about 12 500 oz) during 2011 and full monthly
production of 20 000 oz during 2012."
The Company had unrestricted cash and cash equivalents of
US$188.596 million at December 31, 2010, compared with US$29.375
million at December 31, 2009. The net increase in cash and cash
equivalents is primarily due to the capital raisings of US$250.000
million and US$90.000 million completed during May 2010 and
December 2010 respectively.
Metal prices continued to recover through the year and Platmin
achieved an average gross 4E basket price of US$1,405 per ounce
(ZAR10,235 per ounce) at an average exchange rate for the twelve
month period of ZAR7.28=US$1.00. The rise in prices during the year
was countered somewhat by the strengthening South African rand over
the period. During the 12 months to December 31, 2010, gross
revenue generated from metal dispatched and sold of US$91.028
million was off-set against operating costs of US$177.689 million,
resulting in capitalized net operating costs of US$86.661
million.
Reflecting the build-up phase of the Company, Platmin recorded a
loss for the year ended December 31, 2010, excluding capitalized
losses from operations, of US$28.516 million before taking into
account the US$24.120 million non-cash based fair value loss
adjustment on the convertible debenture issued in May 2010 and the
foreign exchange loss of US$12.806 million due to the South African
rand strengthening against the US dollar and the subsequent
revaluation of cash held in a currency other than the Company's
functional currency. In total, the loss for the year ended December
31, 2010 was US$65.442 million, or US$0.09 per share, compared with
a net loss of US$11.115 million or a loss of US$0.02 per share, for
the ten months ended December 31, 2009.
The loss reported for the year, excludes net operating costs at
PPM that were capitalized, of US$86.661 million (ZAR571.203
million), compared to US$59.574 million (ZAR438.361 million) for
the ten months ended December 31, 2009. As at December 31, 2010,
the total project capital expenditure for the development of PPM,
including plant capital expenditure, capitalised pre-production
costs, and offsetting revenue from metal sales during the
pre-production phase, amounted to US$562.881 million (ZAR3.709
billion). With effect from January 1, 2011, PPM declared commercial
production which will result in all revenue, mine operating costs
and amortization of the total capitalized cost over the remaining
life of mine, being reported through the Statement of Income. The
Mphahlele, Grootboom and Loskop projects continue on a reduced work
program, and in the short term, Platmin will commit sufficient
expenditure to these projects, funded from existing cash on hand,
to ensure that the new order prospecting and mining rights are
preserved.
Significant developments during the quarter included:
-- the resumption of PGM concentrate dispatches to the smelter
at the Northam Platinum Limited
("Northam") Zondereinde mine on October 25, 2010, following the
conclusion of a six-week strike at the Northam mine on October 18,
2010.
-- On December 17, 2010, the Company concluded the placement of
98,901,099 new common shares at a price of US$0.91 (CAD$0.93) per
common share for total gross proceeds of US$90.000 million; and
-- On December 22, 2010, the holders of US$135.000 million of
convertible debentures that were issued on May 13, 2010, requested
and the Company accepted an extension of the maturity date of the
bonds from December 31, 2010 to February 28, 2011.
Events subsequent to December 31, 2010
-- On February 18, 2011, the company announced that agreements
have been executed with the holders of the $135.000 million
convertible debentures to extend the maturity date from February
28, 2011 to March, 31, 2011 and to reduce the conversion price from
US$1.215 to US$0.84. Upon conversion this would result in a further
160,714,287 shares being issued.
-- On February 28, 2011, the Company repaid in full the
Pallinghurst Resources Limited promissory note of US$26.000 million
plus accrued interest and costs.
-- On March 23, 2011, Platmin announced the acquisition of an
incremental 5.99 million 4E (3PGE+Au) PGM inferred resource ounces
(42.57 million tonnes at a grade of 4.38g/t) contained within the
western portion of the Sedibelo PGM Project concession ("Sedibelo
West"), which is contiguous with and down-dip of the eastern
boundary of PPM, from the Bakgatla-Ba-Kgafela Tribe ("Bakgatla")
and Itereleng Bakgatla Mineral Resources (Pty) Limited ("IBMR"),
for an aggregate consideration of US$75.000 million in cash
(equivalent to US$12.50 per 4E PGM inferred resource ounce) to be
funded from existing cash resources. In addition to the Sedibelo
West purchase, Platmin has also acquired for a total consideration
of $12.034 million, an effective 50% interest in an infrastructure
vehicle which acquired the infrastructure rights and assets for
power and water for this project previously owned by Barrick
Platinum (South Africa) (Pty) Ltd. This acquisition has been
completed in partnership with the Bakgatla and Ivy Lane Capital
Limited (a Pallinghurst-related entity) which will jointly own the
other 50%.
-- On March 23, 2011, Platmin formally announced that Kgosi
Molefe John Pilane had been invited to join the board of Platmin.
He is the appointed traditional leader of the Bakgatla
community.
-- March 31, 2011, the Company announced that all the conditions
precedent for the conversion of the $135.000 million in convertible
debentures had been fulfilled and that conversion had taken place
at US$0.84 per share. A total of 160,714,287 new shares are to be
issued resulting in a total of 910,395,054 shares in issue.
-- Mr Wayne Koonin the Chief Financial Officer of the Company
has resigned with effect from May 31, 2011, to take up another
senior financial role in the mining industry. The replacement for
Mr Koonin has been identified and is set to join the company
shortly, providing sufficient time for a seamless handover period.
An announcement to this effect will be made shortly.
Commenting on the year, Tom Dale, Platmin CEO highlighted the
progress made during 2010 at PPM. I am delighted by our acquisition
of Sedibelo West which showcases the calibre of our partnership
with the Bakgatla-Ba-Kgafela. These additional PGM resource ounces
will:- extend the life of PPM's Tuschenkomst pit; create operating
flexibility, specifically in the north pit, and give us direct
access to sulphide ores with their higher metallurgical
recoveries.
Commercial production has been declared from January 1, 2011 and
continued rock-solid support from our shareholder base underpins
our efforts to create a significant, quality PGM-producer on the
western limb of the Bushveld Complex."
Commenting on Mr Koonin's resignation, Mr Dale said that "a man
of Wayne's technical financial ability and work ethic is a valuable
asset in any business and he played a key role during the past 2
years since Pallinghurst invested into Platmin. On behalf of the
Board, we thank him for his contribution and wish him well in his
new position."
Platmin's chairman Brian Gilbertson said: "I thank Wayne Koonin
for his hard work and contribution over the past two years and wish
him well in his future endeavours".
About Platmin
Platmin's primary asset is the Pilanesberg Platinum Mine, which
is building up to full production from the Tuschenkomst pit. The
focus of the Company is on achieving the metal production forecasts
predicted in the bankable feasibility study for the project and
participating in the value creation of developing the western limb
of the Bushveld Complex. Platmin also hold interests in projects on
the eastern limb.
National Instrument 43-101 Disclosures
Under National Instrument 43-101 ("NI 43-101") of the Canadian
Securities Administrators, the Qualified Person for the Sedibelo
West property is Mr. Terry Holohan, a Qualified Person as defined
by NI 43-101. Mr. Holohan is not independent of Platmin for
purposes of NI 43-101. He has reviewed and verified the contents of
this press release. The effective date of the mineral resources
disclosed in this press release is March 31, 2011. A cut-off grade
of 0.5 g/t 4E was used in the estimation. Individual metal grades
within the resource are 2.63 g/t Pt, 1.29 g/t Pd, 0.33 g/t Rh, and
0.13 g/t Au. The method used for estimation was ordinary
co-kriging.
AIM Disclosures
Application has been made to the London Stock Exchange for the
160,714,287 new common shares to be issued which will rank pari
passu with existing shares of the Company. This admission is
expected to become effective and dealings to commence in the shares
on 6 April 2011. In accordance with Disclosure and Transparency
Rule 5.6.1, following admission of the new shares, the total number
of voting rights in Platmin will be 910,395,054 . The above figure
may be used by shareholders as the denominator for the calculations
by which they will determine if they are required to notify their
interest in, or a change to their interest in, Platmin under the
FSA's Disclosure and Transparency Rules.
For further information:
Charmane Russell Russell & Associates +27 11 880 3924
+27 82 372 5816
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This market release contains "forward-looking information" which
may include, but is not limited to, statements with respect to the
future financial and operating performance of Platmin Limited (the
"Company" or "Platmin"), its subsidiaries and affiliated companies,
and its mineral projects, the future price of platinum or other
Platinum Group Elements ("PGEs"), PGE production levels, mining
rates, the future price of other base metals, future exchange
rates, the estimation of mineral resources and reserves, the
realization of mineral resource estimates or their conversion into
reserves, costs and future costs of production, capital and
exploration expenditures, including remaining project development
expenditure at the Pilanesberg Platinum Mine ("PPM"), costs and
timing of the development of new deposits, costs and timing of the
development of new mines, costs and timing of future exploration,
requirements for additional capital, government regulation of
mining operations and exploration operations, timing and receipt of
approvals, licenses, and conversions under South African mineral
legislation, environmental risks, title disputes or claims,
limitations of insurance coverage and the timing and outcome of
regulatory matters. Often, but not always, forward-looking
statements can be identified by the use of words such as "plans",
"expects", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates", "targeted" or "believes" or
variations (including negative variations) of such words and
phrases, or state that certain actions, events or results "may",
"could", "would", "might" or "will" be taken, occur or be
achieved.
Forward-looking statements in this market release, amongst
others, forecast production and sales reaching a monthly rate of 12
500 4E ounces during the 2011 year and 20 000 4E ounces during the
2012 year; recovery rates and grade; targets, estimates and
assumptions in respect of platinum and other PGM prices and
production; allocation of funds for current commitments; and the
timing and completion of definitive feasibility work at the
Mphahlele, Grootboom and Loskop Projects.
Such forward-looking statements are based on a number of
material factors and assumptions, including, that contracted
parties provide goods and/or services on the agreed timeframes,
that budgets and production forecasts are accurate, that equipment
necessary for construction and development is available as
scheduled and does not incur unforeseen break downs, that no labour
shortages or delays are incurred, that plant and equipment
functions as specified, that geological or financial parameters do
not necessitate future mine plan changes, that no unusual
geological or technical problems occur, and that grades and
recovery rates are as anticipated in mine planning.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Platmin and/or its subsidiaries
and/or its affiliated companies to be materially different from any
future results, performance or achievements expressed or implied by
the forward-looking statements. Such factors include, among others,
general business, economic, competitive, political and social
uncertainties; the actual results of current exploration and mining
activities; development and operational risks; title risks;
regulatory risks; conclusions of economic evaluations and studies;
fluctuations in the value of the United States dollar relative to
the Canadian dollar or South African rand; changes in project
parameters as plans continue to be refined; future prices of
platinum or other PGEs; possible variations of ore grade or
recovery rates (including the existence of potholes, faults and
other geological conditions that may affect the existence or
recovery of resources and reserves); failure of plant, equipment or
processes to operate as anticipated; accidents, labour disputes,
industrial unrest and strikes and other risks of the mining
industry; political instability, insurrection or war; the effect of
HIV/AIDS on labour force availability and turnover; delays in
obtaining governmental approvals or financing or in the completion
of development or construction activities, as well as those factors
communicated in the section entitled "Risk Factors" of Platmin's
current Annual Information Form ("AIF") and its final short form
prospectus dated May 5, 2010, which can both be viewed at
www.sedar.com. Although Platmin has attempted to identify important
factors that could cause actual actions, events or results to
differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events
or results to differ from those anticipated, estimated or intended.
Forward-looking statements contained herein are made as of the date
of the MD&A and Platmin disclaims any obligation to update any
forward-looking statements, whether as a result of new information,
future events or results or otherwise. There can be no assurance
that forward-looking statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements due to the
inherent uncertainty therein.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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