TIDMPPN
RNS Number : 3787M
Platmin Limited
15 August 2011
Platmin Limited
(In Commercial production)
Condensed Consolidated Interim Financial Statements
for the three and six month periods ended June 30, 2011 and June
30, 2010
(Unaudited, expressed in United States dollars, unless otherwise
stated)
Condensed consolidated interim statement of financial
position
as at June 30, 2011
(Unaudited, expressed in U.S. dollars, unless otherwise
stated)
Jun 30, Dec 31,
2011 2010
Notes $ 000 $ 000
ASSETS
Non-current assets
Mining assets 39,917 49,886
Intangible assets 5 38,844 14,019
Property, plant and equipment 6 573,251 578,550
Loans receivable 65 63
Restricted cash investments and guarantees 8 172,408 84,471
--------------------------------------------- ---------
Total non-current assets 824,485 726,989
--------------------------------------------- --------- --------- ---------
Current assets
Inventories 7 9,007 11,285
Accounts and other receivables 52,883 46,877
Restricted cash 8 - 135,131
Cash and cash equivalents 9 160,060 188,596
--------------------------------------------- --------- --------- ---------
Total current assets 221,950 381,889
--------------------------------------------- --------- --------- ---------
TOTAL ASSETS 1,046,435 1,108,878
============================================= ========= ========= =========
EQUITY AND LIABILITIES
Equity attributable to owners of the
parent
Share capital 10 891,434 756,579
Accumulated deficit (134,650) (90,419)
Other components of equity 188,675 198,352
--------------------------------------------- --------- --------- ---------
945,459 864,512
Non-controlling interests (43,902) (30,116)
--------------------------------------------- --------- --------- ---------
Total equity 901,557 834,396
--------------------------------------------- --------- --------- ---------
Non-current liabilities
Long-term borrowings 11 17,256 4,710
Finance lease liability 12 8,934 9,410
Decommissioning and rehabilitation
provision 13 82,372 70,705
--------------------------------------------- --------- --------- ---------
Total non-current liabilities 108,562 84,825
--------------------------------------------- --------- --------- ---------
Current liabilities
Trade payables and accrued liabilities 24,736 20,747
Revolving commodity facility 14 11,448 3,468
Current portion of finance lease
liability 12 132 291
Current portion of long-term borrowings 15 - 31,923
Convertible debenture 16 - 133,228
Total current liabilities 36,316 189,657
--------------------------------------------- --------- --------- ---------
Total liabilities 144,878 274,482
--------------------------------------------- --------- --------- ---------
TOTAL EQUITY AND LIABILITIES 1,046,435 1,108,878
============================================= ========= ========= =========
NATURE OF OPERATIONS 1
The accompanying notes are an integral part of the condensed
consolidated interim financial statements
Condensed consolidated interim statement of income
for the three and six months ended June 30, 2011
(Unaudited, expressed in U.S. dollars, unless otherwise
stated)
For the three months For the six months
ended ended
---------------------- -----------------------
Jun 30, Jun 30, Jun 30, Jun 30,
2011 2010 2011 2010
Notes $ 000 $ 000 $ 000 $ 000
Revenue 34,489 - 60,527 -
Cost of operations 17 (53,763) - (104,057) -
Operating loss (19,274) - (43,530) -
Administrative and
general expenses 18 (5,178) (4,922) (8,505) (9,315)
Other
income/(expenses) 18 555 (16,407) (6,197) (16,416)
Finance income 1,684 - 3,474 -
Finance costs (970) (2,697) (3,259) (3,476)
--------------------- ------ ---------- ---------- ---------- -----------
Loss before taxation (23,183) (24,026) (58,017) (29,207)
LOSS FOR THE PERIOD (23,183) (24,026) (58,017) (29,207)
===================== ====== ========== ========== ========== ===========
Loss attributable
to:
Owners of the parent (16,429) (20,675) (44,231) (24,272)
Non-controlling
interest (6,754) (3,351) (13,786) (4,935)
--------------------- ------ ---------- ---------- ---------- -----------
(23,183) (24,026) (58,017) (29,207)
===================== ====== ========== ========== ========== ===========
Loss per share (in
currency units)
attributable to
owners of the
parent:
Basic and diluted 19 (0.02) (0.04) (0.05) (0.05)
--------------------- ------ ---------- ---------- ---------- -----------
The accompanying notes are an integral part of the condensed
consolidated interim financial statements
Condensed consolidated interim statement of comprehensive
income
for the three and six months ended June 30, 2011
(Unaudited, expressed in U.S. dollars, unless otherwise
stated)
Jun 30, Jun 30, Jun 30, Jun 30,
2011 2010 2011 2010
$ 000 $ 000 $ 000 $ 000
---------------------------------- --------- --------- --------- ---------
Loss for the period (23,183) (24,026) (58,017) (29,207)
Other comprehensive income (net
of tax) 1,419 22,811 24,040 20,219
---------------------------------- --------- --------- --------- ---------
Exchange differences on
translation from functional to
presentation currency 1,419 22,811 24,040 20,219
Income tax relating to components
of other comprehensive income - - - -
---------------------------------- --------- --------- --------- ---------
TOTAL COMPREHENSIVE LOSS FOR THE
PERIOD (21,764) (1,215) (33,977) (8,988)
================================== ========= ========= ========= =========
Total comprehensive profit/(
loss) attributable to:
Owners of the parent (15,010) 2,136 (20,191) (4,053)
Non-controlling interest (6,754) (3,351) (13,786) (4,935)
---------------------------------- --------- --------- --------- ---------
(21,764) (1,215) (33,977) (8,988)
================================== ========= ========= ========= =========
The accompanying notes are an integral part of the condensed
consolidated interim financial statements
Condensed consolidated interim statement of changes in
shareholders' equity
for the six months ended June 30, 2011
(Unaudited, expressed in U.S. dollars, unless otherwise
stated)
Equity attributable to the shareholders
Share Foreign
Based Currency
Share Payment Translation Non-controlling Total
Capital Deficit Reserve Warrants Reserve Subtotal interest Equity
$ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000
Balance at
December 31,
2009 425,535 (35,002) 10,167 846 71,574 473,120 (20,091) 453,029
Shares issued 241,523 - - - - 241,523 - 241,523
Loss for the
period - (24,272) - - - (24,272) (4,935) (29,207)
Stock based
compensation - - 27,677 - - 27,677 - 27,677
Other
comprehensive
income:
Currency
translation
adjustment - - - - (20,219) (20,219) - (20,219)
------------------ -------- ---------- -------- --------- ------------ --------- ---------------- ---------
Balance at
June 30,
2010 667,058 (59,274) 37,844 846 51,355 697,829 (25,026) 672,803
Shares issued 89,521 - - - - 89,521 - 89,521
Loss for the
period - (31,145) - - - (31,145) (5,090) (36,235)
Stock based
compensation - - 4,384 - - 4,384 - 4,384
Other
comprehensive
income:
Currency
translation
adjustment - - - - 103,923 103,923 - 103,923
Balance at
December 31,
2010 756,579 (90,419) 42,228 846 155,278 864,512 (30,116) 834,396
Shares issued 134,855 - - - - 134,855 - 134,855
Loss for the
period - (44,231) - - - (44,231) (13,786) (58,017)
Stock based
compensation - - 14,363 - - 14,363 - 14,363
Other
comprehensive
income:
Currency
translation
adjustment - - - - (24,040) (24,040) - (24,040)
Balance at
June 30,
2011 891,434 (134,650) 56,591 846 131,238 945,459 (43,902) 901,557
================== ======== ========== ======== ========= ============ ========= ================ =========
Note 10
The accompanying notes are an integral part of the condensed
consolidated interim financial statements
Condensed consolidated interim statement of cashflows
for the three and six months ended June 30, 2011
(Unaudited, expressed in U.S. dollars, unless otherwise
stated)
For the three For the six months
months ended ended
-------------------- ---------------------
Jun 30, Jun 30, Jun 30, Jun 30,
2011 2010 2011 2010
Notes $ 000 $ 000 $ 000 $ 000
------------------------- ------ --------- --------- ---------- ---------
Cash flows from
operating activities
------------------------- ------ --------- --------- ---------- ---------
Cash receipts from
customers 22,790 19,879 53,089 35,609
Cash paid to suppliers
and employees (45,830) (46,075) (94,429) (88,285)
------------------------- ------ --------- --------- ---------- ---------
Cash utilized in
operations (23,040) (26,196) (41,340) (52,676)
Interest received 411 432 1,109 749
Interest paid 47 (307) (288) (679)
------------------------- ------ --------- --------- ---------- ---------
Net cash utilized in
operating activities (22,582) (26,071) (40,519) (52,606)
------------------------- ------ --------- --------- ---------- ---------
Cash flows from
investing activities
------------------------- ------ --------- --------- ---------- ---------
Purchase of property,
plant and equipment (4,010) 517 (4,322) (697)
Proceeds from fair value
adjustments 4,874 - 4,810 -
Purchase of Sedibelo
West - - (79,666) -
Additions to intangible
assets (364) (1,065) (12,659) (1,165)
Increase in
rehabilitation
investment (166) (17,128) (5,971) (17,658)
Increase in deferred
exploration expenses (619) (495) (819) (909)
------------------------- ------ --------- --------- ---------- ---------
Net cash utilized in
investing activities (285) (18,171) (98,627) (20,429)
------------------------- ------ --------- --------- ---------- ---------
Cash flows from
financing activities
------------------------- ------ --------- --------- ---------- ---------
Increase in loans
payable - 12,645 - 25,478
Decrease in finance
lease liability (475) (451) (938) (911)
Increase/(Decrease) in
revolving commodity
facility 6,053 (8,592) 6,558 (3,654)
Realised foreign
exchange (losses) /
gains 237 (1) (1,387) (2)
Repayment of promissory
note - - (29,106) -
Proceeds from issue of
shares (33) 238,809 130,797 239,352
------------------------- ------ --------- --------- ---------- ---------
Net cash generated from
financing activities 5,782 242,410 105,924 260,263
------------------------- ------ --------- --------- ---------- ---------
Net (decrease) /
increase in cash and
cash equivalents (17,085) 198,168 (33,222) 187,228
Net foreign exchange
differences (103) (3,129) 4,686 (3,672)
Cash and cash
equivalents at the
beginning of the
period 9 177,248 17,892 188,596 29,375
------------------------- ------ --------- --------- ---------- ---------
Cash and cash
equivalents at the end
of the period 9 160,060 212,931 160,060 212,931
========================= ====== ========= ========= ========== =========
The accompanying notes are an integral part of the condensed
consolidated interim financial statements
Notes to the condensed consolidated interim financial
statements
for the three and six months ended June 30, 2011
(Unaudited, expressed in U.S. dollars, unless otherwise
stated)
1. Nature of operations
Platmin Limited ("the Company") and its subsidiaries ("the
Group") is a Natural Resources Group engaged in the acquisition,
exploration, development and operation of Platinum Group Elements
("PGE") properties in the Republic of South Africa.
The Company was incorporated under the Canada Business
Corporation Act on May 29, 2003. The Company has continued as a
company under the Business Corporations Act of British Columbia,
Canada, effective April 1, 2009. Its Common Shares are listed on
the Toronto Stock Exchange ("TSX") and the Alternative Investment
Market of the London Stock Exchange ("AIM"). The Company trades
under the symbol "PPN" on both exchanges. On July 22, 2009, the
Company listed on the Johannesburg Securities Exchange Limited
("JSE") under the symbol "PLN".
These condensed consolidated interim financial statements have
been prepared using International Financial Reporting Standards
("IFRS") applicable to a going concern, which contemplates the
realization of assets and settlement of liabilities in the normal
course of business as they become due.
For the three and six months ended June 30, 2011 the Group
incurred a loss of US$23.183 million and US$58.017 million. At June
30, 2011 had an accumulated deficit of US$134.650 million. The
Group is dependent on the successful operation of the Pilanesberg
Platinum Mine ("PPM") to generate cash flows in order to fund its
operations and pay debt as it becomes due.
The Group increased its equity with US$135.000 million by way of
conversion of the convertible debenture on March 31, 2011 and had
US$160.060 million in cash and cash equivalents at June 30, 2011 to
fund mining activities and meet its contractual obligations.
2. Statement of compliance
The unaudited condensed consolidated interim financial
statements for the three and six months ended June 30, 2011 have
been prepared in accordance with the recognition and measurement
requirements of IFRS and the presentation and disclosure
requirements of International Accounting Standard ("IAS") 34
Interim Financial Reporting. These interim results do not include
all the information required for the full annual financial
statements, and should be read in conjunction with the consolidated
financial statements of the Group as at and for the year ended
December 31, 2010.
The unaudited condensed consolidated interim financial
statements, which have been prepared on the going concern basis,
were approved by the Board of Directors on 10 August 2011.
The financial statements are presented in US dollars, rounded to
the nearest thousand.
3. Accounting policies
The accounting policies applied by the Group in these unaudited
condensed consolidated interim financial statements are consistent
with those applied by the Group in its consolidated financial
statements as at and for the year ended December 31, 2010.
Upon declaring commercial production on January 1, 2011, the
useful life of assets has been calculated in accordance with the
table as detailed below.
Property plant and equipment
Depreciation and amortization are calculated on a
units-of-production method for the mining assets and straight-line
method for all other assets to write off the cost of the assets to
their residual values over their estimated useful lives. The
depreciation and amortization rates applicable to each category of
property, plant and equipment are as follows:
Useful life
Asset category (years)
Vehicles 5
Computer equipment 3
Office equipment 6
Furniture and fittings 6
Other equipment 5
Buildings 20
Leasehold improvements 5
Plant and equipment Units of production (ore
tonnes processed)
Deferred stripping costs, decommissioning Units of production (ore
assets tonnes mined)
Producing mines (exploration and evaluation Units of production (ore
assets) tonnes mined)
4. Segmented information
Management has determined the operating segments based on the
reports reviewed by the Executive Committee ("the Committee") that
are used to make strategic decisions.
The Committee considers the business from an operating
perspective. The Group operates in one geographic segment, the
Republic of South Africa. The operating segments comprise the
following:
Mining operation: PPM declared commercial production on January
1, 2011. This mine is involved in the mining and processing of
platinum group elements.
Development and exploration operations: The Group is engaged in
a number of other development and exploration projects within the
Republic of South Africa.
Administrative operations: The Group administration is done at
the local corporate office based in Centurion, the Metropolitan
City of Tshwane in the Republic of South Africa.
Although the development and exploration as well as
administrative operations do not meet the quantitative thresholds
required by IFRS 8 - Segment reporting, management has concluded
that these segments should be reported, as it is closely monitored
by the Committee. The development and exploration segment is
earmarked as the growth area for the Group.
The segment information provided to the committee for the
reportable segments for the six month periods ended is as
follows:
Development
Mining and exploration Administration Consolidated
Reportable items in the Statement of Comprehensive Income
External
revenues 60,527 33,696 - - - - 60,527 33,696
Intersegment
revenue - - - - - - - -
EBITDA (33,919) (43,556) - - (20,076) (28,651) (53,995) (72,207)
============== ========= ========= ======= ========= ========= ========= ========== ==========
Reportable items in the Statement of Financial Position
Total assets 814,238 539,965 53,337 36,393 178,860 362,699 1,046,435 939,057
Additions to
non-current
assets 17,730 697 24,867 155,604 4 909 42,601 157,210
Total
liabilities 125,556 127,796 17,423 3,968 1,899 134,490 144,878 266,254
============== ========= ========= ======= ========= ========= ========= ========== ==========
The amounts provided to the committee with respect to total
assets and total liabilities are measured in a manner consistent
with that of the consolidated financial statements. These assets
and liabilities are allocated based on the operations of the
segment. There were no impairments during the current or prior
reportable periods.
Additions to non-current assets include all additions to mining
assets, intangible assets and property, plant and equipment.
4. Segmented information (continued)
A reconciliation of EBITDA to total comprehensive loss for the
period is provided as follows:
Consolidated
--------------------
Jun 30, Jun 30,
2011 2010
$'000 $'000
-------------------------------------------------------- --------- ---------
Total EBITDA for reportable segments (53,995) (72,207)
Revenues offset against the cost of the plant
construction - (33,697)
Mining costs offset against the cost of the plant
construction - 73,156
-------------------------------------------------------- --------- ---------
Total EBITDA per Consolidated statement of income and
comprehensive income (53,995) (32,748)
Foreign exchange gains 8,436 7,295
Depreciation (12,673) (278)
Finance costs (net) 215 (3,476)
-------------------------------------------------------- --------- ---------
Loss before taxation (58,017) (29,207)
Income tax expense - -
Exchange differences on translating from functional
currency to presentation currency 24,040 20,219
-------------------------------------------------------- --------- ---------
Total comprehensive loss for the period (33,977) (8,988)
======================================================== ========= =========
5. Intangible assets
As at Jun As at Dec
30, 31,
2011 2010
$ 000 $ 000
--------------------------------- --------- ----------------
Water pipeline 13,067 13,070
ERP software 791 886
Computer software 46 63
SPV - Power and water rights 24,940 -
--------------------------------- --------- ----------------
Balance at the end of the period 38,844 14,019
================================= ========= ================
Reconciliation of intangible assets:
Water ERP Computer Power and
pipeline Software software $ water rights TOTAL
$ 000 $ 000 000 $ 000 $ 000
------------- ------------- ------------ ----------- ------------- -------------
Balance as at
December 31,
2009 8,479 772 97 - 9,348
Additions
during the
period 1,228 169 43 - 1,440
Reclassified
from
receivables 2,064 - - - 2,064
Amortization
for the
period - (132) (80) - (212)
Foreign
exchange
variance 1,299 77 3 - 1,379
------------- ------------- ------------ ----------- ------------- -------------
Balance as at
December 31,
2010 13,070 886 63 - 14,019
Additions
during the
period 366 - 4 24,050 24,420
Amortization
for the
period - (71) (19) - (90)
Foreign
exchange
variance (369) (24) (2) 890 495
Balance as at
June 30,
2011 13,067 791 46 24,940 38,844
============= ============= ============ =========== ============= =============
PPM entered into an agreement with The Board of Magalies Water,
a State-owned water board operating under the Water Services Act,
Number 108 of 1997 as amended, ("Magalies Water") and other parties
to build a water pipeline and related infrastructure from the
Vaalkop Water Treatment Works to PPM. Upon completion, the
ownership of the water pipeline and related infrastructure will
remain with Magalies Water; however, PPM will have a right to use
9Ml a day through the pipeline for the entire life of mine.
Platmin concluded, through a special purpose vehicle ("SPV") in
which Platmin indirectly holds a 50% interest, to purchase certain
long lead items. These long lead items, consisting of the power and
water rights and obligations previously acquired by Barrick
Platinum SA (Pty) Ltd ("Barrick") in respect of the Sedibelo mining
area, form part of the Platmin acquisition of a portion of the
Sedibelo PGM Project concession ("Sedibelo West"). The acquisition
consideration for the transaction was US$24.050 million.
6. Property, plant and equipment
Plant
construction Deferred Decom-
and mine Plant and stripping missioning Producing Land and Other Leased
development equipment cost $ asset $ mines buildings $ assets TOTAL
$ 000 $ 000 000 000 $ 000 $ 000 000 $ 000 $ 000
------------- ------------- ---------- ---------- ----------- ---------- ---------- ------ ------- ---------
COST
Balance as
at December
31, 2009 407,789 - - - - 1,025 1,899 12,991 423,704
Additions 107,008 - - - - 55 561 - 107,624
Transfers (23) - - - - - 23 - -
Foreign
exchange
movement 48,107 - - - - 120 224 1,531 49,982
------------- ------------- ---------- ---------- ----------- ---------- ---------- ------ ------- ---------
Balance as
at December
31, 2010 562,881 - - - - 1,200 2,707 14,522 581,310
Transfers (562,881) 235,501 258,750 68,630 - - - - -
Transfers
from Mining
Assets - - - - 9,639 - - - 9,639
Revenue
adjustments - (2,796) - - - - - - (2,796)
Additions - 4,102 - 12,980 - 95 187 - 17,364
Foreign
exchange
movement - (6,684) (7,298) (1,935) (256) (32) (75) (409) (16,689)
------------- ------------- ---------- ---------- ----------- ---------- ---------- ------ ------- ---------
Balance as
at June 30,
2011 - 230,123 251,452 79,675 9,383 1,263 2,819 14,113 588,828
============= ============= ========== ========== =========== ========== ========== ====== ======= =========
ACCUMULATED
DEPRECIATION
ACCUMULATED
DEPRECIATION
Balance as at
December 31,
2009 - - - - - - 759 474 1,233
Depreciation
for the
period - - - - - - 442 821 1,263
Foreign
exchange
movement - - - - - - 122 142 264
---------------- --- ------ ------ ---- ---- ------ ------ -------
Balance as at
December 31,
2010 - - - - - - 1,323 1,437 2,760
Depreciation
for the
period - 6,252 5,198 377 194 2 252 435 12,710
Foreign
exchange
movement - 90 75 5 3 3 (34) (35) 107
---------------- --- ------ ------ ---- ---- ------ ------ -------
Balance as at
June 30, 2011 - 6,342 5,273 382 197 5 1,541 1,837 15,577
================ === ====== ====== ==== ==== ====== ====== =======
6. Property, plant and equipment (continued)
Plant
construction Deferred Decom-
and mine Plant and stripping missioning Producing Land and Other Leased
development equipment cost $ asset $ mines buildings $ assets TOTAL
$ 000 $ 000 000 000 $ 000 $ 000 000 $ 000 $ 000
CARRYING
AMOUNTS
At
December
31,
2010 562,881 - - - - 1,200 1,384 13,085 578,550
---------- ------------- ---------- ---------- ----------- ---------- ---------- ------ ------- --------
At June
30,
2011 - 223,781 246,179 79,293 9,186 1,258 1,278 12,276 573,251
========== ============= ========== ========== =========== ========== ========== ====== ======= ========
7. Inventories
As at Jun As at Dec
30, 31,
2011 2010
$ 000 $ 000
At cost
Ore stockpiled 2,823 4,424
Work in progress 986 2,258
Consumables 5,198 4,603
Balance at the end of the period 9,007 11,285
================================= ============ ================
8. Restricted cash
8.1 Restricted cash investments and guarantees - non-current
asset
Cash investments were made relating to certain guarantees
required by the Republic of South Africa's Department of Mineral
Resources ("DMR"), formerly known as the Department of Minerals and
Energy, and ESKOM Holdings Limited ("ESKOM"), the South African
state utility supplier of electricity, of which the details are as
follows:
-- Rehabilitation guarantees
The DMR requires rehabilitation guarantees for all prospecting
and mining rights. These rehabilitation guarantees primarily relate
to the mining rights for the Pilanesberg and Mphahlele Projects.
These guarantees have been provided to the DMR on two separate
basis:
- by the issuance of the guarantee by an insurance company, with
a portion of the total guarantee being paid over into a separate
bank account of the Group and ceded in favour of the Insurance
company and the remaining portion paid in premiums to the insurance
company over the expected life of the mine; and
- on a cash backed basis.
-- ESKOM guarantees
-- On June 17, 2008 a guarantee was issued by Lombard Insurance
Company Limited ("Lombard Insurance"), to ESKOM to order critical
long lead time material for the construction of the electrical
substation at PPM. Lombard Insurance required cash collateral on a
portion of the guarantee. The cash collateral is held in a separate
bank account controlled by the Group and ceded in favour of Lombard
Insurance. The balance of the amount guaranteed by Lombard
Insurance is payable on a premium basis over 5 years and
re-assessed on an annual basis.
-- Escrow
On March 23, 2011, the Company entered into a transaction to
acquire an incremental 5.99 million 4E PGM inferred mineral
resource ounces contained within Sedibelo West from the
Bakgatla-Ba-Kgafela Tribe and Itereleng Bakgatla Mineral Resources
(Pty) Limited, for an aggregate consideration of US$75.000 million
in cash. The total purchase price of US$82.000 million (including
VAT of US$7.000 million on a portion of the purchase price) was
classified as restricted cash in anticipation of the transferring
thereof to a nominated Escrow account.
8. Restricted cash (continued)
8.1 Restricted cash investments and guarantees - non-current
asset (continued)
As at Jun As at Dec
30, 31,
2011 2010
$ 000 $ 000
---------------------------------------- -------------- ----------------
Pilanesberg rehabilitation guarantee 81,577 76,430
ESKOM capital and supply guarantees 7,628 6,856
Mphahlele rehabilitation guarantee 1,198 1,077
Other guarantees 105 108
Escrow account for Sedibelo transaction 81,900 -
Balance at the end of the period 172,408 84,471
======================================== ============== ================
8.2 Restricted cash - current asset
As at Jun As at Dec
30, 31,
2011 2010
$ 000 $ 000
Cash collateral for convertible debentures - 135,131
Balance at the end of the period - 135,131
=========================================== ========== ================
On May 13, 2010, the Company issued US$135.000 million of
convertible debentures. The cash collateral represents the funds
received and the interest accrued thereon to date. The debentures
were converted on March 31, 2011.
9. Cash and cash equivalents
As at Jun As at Dec
31, 31,
2011 2010
$ 000 $ 000
---------------------------------- --------- ----------------
Cash at bank and on hand 160,060 188,596
Total cash and cash equivalents 160,060 188,596
================================== ========= ================
Cash at bank earns interest at a floating rate based on daily
bank deposit rates. Cash is deposited at reputable financial
institutions of a high quality credit standing within the Republic
of South Africa and their foreign affiliates in the United Kingdom.
The fair value of cash and cash equivalents equates the values as
disclosed in this note.
For the purpose of the condensed consolidated interim statement
of cash flows, cash and cash equivalents comprise only the cash at
bank and on hand line-item is disclosed for each period end
above.
10. Share capital
a) Common shares authorized
The Company has an unlimited number of common shares with no par
value.
b) Common shares issued
Movement during the year ended December 31, Number Amount
2010 of shares $000
------------------------------------------------ ------------ --------
Balance, January 1, 2010 445,018,352 425,535
Common shares issued 304,662,415 331,044
Balance, December 31, 2010 749,680,767 756,579
================================================ ============ ========
Movement during the period ended June 30, 2011
Balance, January 1, 2011 749,680,767 756,579
Common shares issued 160,714,286 134,855
------------------------------------------------
Balance, June 30, 2011 910,395,053 891,434
================================================ ============ ========
On March 31, 2011, upon conversion of the convertible debenture
issued on May 13, 2010, the Company issued 160,714,286 new common
shares at a price of US$0.84 per common share for a total
consideration of US$135.000 million, raising US$134.855 million net
of legal fees.
11. Long term borrowings
As at Jun As at Dec
30, 31,
2011 2010
$ 000 $ 000
------------------------------------ ---------------- ------------
Corridor Mining Resources (Pty) Ltd 4,756 4,681
Perilya Exploration (Pty) Ltd 30 29
SPV - Power and water rights 12,470 -
------------------------------------ ---------------- ------------
17,256 4,710
==================================== ================ ============
The acquisition consideration for the long lead items purchased
from Barrick by the SPV (as disclosed in note 5) was funded through
shareholder loans advanced to the SPV. Platmin's portion of these
loans amounted to US$12,025 million. The remaining shareholder's
portion is US$12,470 million at the closing rate of ZAR6.7826 to
US$1.00
12. Finance lease liability
ESKOM designed and built an electrical installation adjacent to
PPM to produce the required electricity and maintains ownership and
control over all significant aspects of operating the facility.
Each month, PPM will pay a fixed capacity charge and a variable
charge based on actual electricity consumed. These payments attract
interest at the South African prime overdraft rate plus 2%.
The arrangement with ESKOM, entered into during the period under
review meet these requirements of IFRIC 4 - Arrangements containing
a lease, and therefore constitutes a lease and falls within the
scope of IAS 17 - Leases and is further classified as a finance
lease due to the sub-station being constructed exclusively for the
use of PPM. An asset (the electrical installation) is explicitly
identified in the arrangement and fulfilment of the arrangement is
dependent on the electrical installation.
Reconciliation between the total minimum lease payments and
their present value:
Up to 1 to 5 More than
1 year years 5 years Total
$ 000 $ 000 $ 000 $ 000
------------------------ -------- -------- ---------- ---------
Minimum lease payments 713 7,132 11,747 19,592
Finance cost (581) (5,212) (4,733) (10,526)
------------------------
Present value 132 1,920 7,014 9,066
======================== ======== ======== ========== =========
13. Decommissioning and rehabilitation provision
As at As at
Jun 30, Dec 31,
2011 2010
$ 000 $ 000
---------------------------------------- --------- ---------
Balance at the beginning of the period 70,705 52,744
Increase in liability for the period 12,990 10,435
Unwinding of interest (accretion) 671 1,307
---------------------------------------- --------- ---------
84,366 64,486
Effect of exchange rate changes (1,994) 6,219
---------------------------------------- --------- ---------
Balance at the end of the period 82,372 70,705
======================================== ========= =========
The estimate represents the discounted current cost of
environmental liabilities as at the respective period end. An
annual estimate of the quantum of closure costs is necessary in
order to fulfil the requirements of the DMR, as well as meeting
specific closure objectives outlined in the mine's Environmental
Management Programme.
Although the ultimate amount of the asset retirement obligation
is uncertain, the fair value of the obligation is based on
information that is currently available. The estimated undiscounted
liability for the asset retirement obligation at June 30, 2011 is
US$100.052 million (December 31, 2010: US$86.667 million). This
estimate includes costs for the removal of all current mine
infrastructure and the rehabilitation of all disturbed areas to a
condition as described in the mine's Environmental Management
Programme. The asset retirement obligation has been determined
using a discount rate of 7.95% and an inflation rate of 6% over a
period of 12 years.
14. Revolving commodity facility
On October 9, 2009, the Company signed a definitive agreement
with Investec Bank Limited ("Investec") to provide a twelve month
renewable revolving commodity finance facility of up to ZAR400
million (US$54.420 million at an exchange rate of ZAR7.35: US$1.00)
for working capital purposes.
In terms of this facility Investec will finance up to 91% of
PPM's platinum, palladium, gold, copper and nickel deliveries to
Northam Platinum Limited. This facility bears interest at the
Johannesburg Interbank Lending Rate ("JIBAR") plus 3.0% and is
repaid within 2 to 3 months upon which the funds are again
available for draw-down.
As at Jun As at Dec
30, 31,
2011 2010
$ 000 $ 000
---------------------------------------- ---------- ----------
Balance at the beginning of the period 3,468 5,854
Increase in liability for the period 22,800 -
Repayment of amounts owing (15,146) (2,684)
Interest accrued 198 (48)
---------------------------------------- ---------- ----------
11,320 3,122
Effect of exchange rate changes 128 346
---------------------------------------- ---------- ----------
Balance at the end of the period 11,448 3,468
======================================== ========== ==========
15. Current portion of long-term borrowings
As at Jun As at Dec
30, 31,
2011 2010
$ 000 $ 000
---------------------------------------- ---------- -------------
Balance at the beginning of the period 31,923 -
- Pallinghurst short-term facility - 26,603
Interest on borrowings 365 1,620
Settlement of borrowings (28,822) -
---------------------------------------- ---------- -------------
3,466 28,223
Effect of exchange rate changes (3,466) 3,700
---------------------------------------- ---------- -------------
Balance at the end of the period - 31,923
======================================== ========== =============
On March 22, 2010, a subsidiary of Platmin entered into a
ZAR191.000 million short term lending facility (the equivalent of
US$26.000 million at an exchange rate of ZAR7.38 to the US dollar)
with Pallinghurst Resources Limited ("Pallinghurst"). As at
December 31, 2010, a total of ZAR191.000 million had been drawn
against this facility. This facility was initially for a period of
3 months, but was extended until February 28, 2011 and was repaid
in full on February 28, 2011.
16. Convertible debenture
Option component
accounted Liability
for in equity component
$ 000 $ 000
Convertible debenture issued 26,664 132,044
Fair value adjustment at extension date 1,238 (1,060)
Interest for the period - 3,241
Transaction costs - (1,128)
Effect of exchange rate changes - 131
------------------------------------------ ---------------- ----------------
Balance as at Dec 31, 2010 27,902 133,228
Fair value adjustment at extension date 7,908 -
Fair value adjustment at modification
date 6,556 -
Interest for the period - 976
------------------------------------------ ---------------- ----------------
42,366 134,204
Effect of exchange rate changes - 796
Conversion of debenture - (135,000)
------------------------------------------ ---------------- ----------------
Balance as at Jun 30, 2011 42,366 -
========================================== ================ ================
On May 13, 2010, the Company issued US$135.000 million of zero
percent convertible debentures, initially subject to conversion by
December 31, 2010 at a price of US$1.215 that would have resulted
in 111,111,111 shares being issued. The maturity date of the
convertible debentures was extended from December 31, 2010 to
February 28, 2011 and subsequently to March 31, 2011, and the
conversion price reduced from US$1.215 to US$0.84.
On March 31, 2011, all the conditions precedent for the
conversion of the convertible debentures had been fulfilled and
conversion took place at US$0.84 per share. A total of 160,714,286
new shares were issued.
The transaction was accounted for under IFRS 2, Share based
payments as the fair value of the convertible debenture was greater
than the proceeds received. On initial recognition, the transaction
gave rise to the recognition of proceeds of US$135 million, a
liability component recognised for the present value of the
contractual cash payments of US$132 million and an equity component
of US$26.6 million. The difference between the proceeds and
liability plus the equity was recognised in the income statement.
The modifications to the instrument resulted in the equity
component moving to US$42 million.Subsequent to the initial
recognition, the equity portion is not remeasured and remains in
equity.
17. Cost of operations
Included in cost of operations:
For the three months For the six months
ended Ended
---------------------- --------------------
Jun 30, Jun 30, Jun 30, Jun 30,
2011 2010 2011 2010
$ 000 $ 000 $ 000 $ 000
-------------------------------- ---------- ---------- --------- ---------
On mine operations
Materials and mining costs 28,498 - 58,274 -
Concentrator plant operations
Materials and other costs 8,506 - 17,936 -
Utilities 3,535 - 5,864 -
Beneficiation
Smelting and refining costs 2,583 - 4,463 -
Transport 102 - 177 -
Salaries 706 - 1,925 -
-------------------------------- ---------- ---------- --------- ---------
Sub-total 43,930 - 88,639 -
Depreciation of operating
assets (note 6) 6,272 - 12,311 -
Change in inventories 3,561 - 3,107 -
================================ ========== ========== ========= =========
53,763 - 104,057 -
================================ ========== ========== ========= =========
18. Administrative and general expenses
For the three months For the six months
ended Ended
---------------------- --------------------
Jun 30, Jun 30, Jun 30, Jun 30,
2011 2010 2011 2010
$ 000 $ 000 $ 000 $ 000
-------------------------------- ---------- ---------- --------- ---------
Included in the administrative
and general expenses are the
following:
Audit fees (55) (242) (201) (422)
Consulting and professional
fees (1,279) (23) (1,524) (195)
Employee expenses (2,090) (2,260) (3,256) (4,363)
General and administration
expenses (519) (1,634) (1,054) (2,924)
Royalty taxes (148) (122) (301) (122)
Mining operations (966) - (1,916) -
Sub-total (5,057) (4,281) (8,252) (8,026)
Share based payment expense 21 (499) 109 (1,011)
Amortization and depreciation (142) (142) (362) (278)
================================ ========== ========== ========= =========
(5,178) (4,922) (8,505) (9,315)
================================ ========== ========== ========= =========
Included in other expenses are
the following:
Foreign exchange gain / (loss) 624 7,304 8,436 7,295
Loss on impairment of
exploration project - (255) - (255)
Other income / (expense) 121 (1) 175 (1)
Share-based payment expense
(fair value adjustment) (190) (23,455) (14,808) (23,455)
-------------------------------- ---------- ---------- --------- ---------
555 (16,407) (6,197) (16,416)
================================ ========== ========== ========= =========
19. Loss per share attributable to owners of the parent
For the three For the six months
months ended ended
---------------------------- ----------------------------
Jun 30, Jun 30, Jun 30, Jun 30,
2011 2010 2011 2010
------------------ ------------- ------------- ------------- -------------
Basic loss per
share (USD)
Basic loss per
share is
calculated by
dividing the net
loss for the
period/ year
attributable to
owners of the
parent by the
weighted average
number of
ordinary shares
outstanding
during the
period/ year (0.02) (0.04) (0.05) (0.05)
Reconciliations:
Net loss used in
calculating
basic earnings
per share
attributable to
owners of the
parent
(USD'000) (16,429) (20,675) (44,231) (24,272)
================== ============= ============= ============= =============
Weighted average
number of shares
used in the
calculation of
basic loss per
share ('000) 910,395 490,743 856,824 513,605
================== ============= ============= ============= =============
There are no reconciling items between loss and headline loss
and therefore loss per share and headline loss per share are the
same.
Due to the Group reporting a loss for the period ending June 30,
2011 the diluted loss per share is equal to the basic loss per
share.
For further information:
Charmane Russell Russell & Associates +27 11 880 3924
+27 82 372 5816
Charles Batten
Investec Bank plc (Nominated Advisor)
+44 20 7 597 4000
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DKPDBNBKDFFD
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